There is no Connecticut appellate authority on what facts an insured must allege to plead bad faith against an insurer. There are, however, several trial court decisions that have enumerated what must be alleged when pleading bad faith in order to sustain its legal sufficiency. Since 2008, there have been three trial court decisions that articulate the specificity of what needs to be pled to support a claim of bad faith against an insurer.
The latest trial court decision is Mamudi v. State Farm Fire & Casualty Co., 2012 Conn. Super. LEXIS 3090 (Conn. Super. Ct., Dec. 19, 2012). In Mamudi, the insured sued State Farm Fire & Casualty Company for breach of contract, bad faith and violations of the Connecticut Unfair Trade Practices Act stemming from a motor vehicle accident.
In response, State Farm moved to strike the bad faith claim, arguing that it was legally insufficient because the insured failed to allege either a sinister motive or improper purpose by State Farm, or purposeful conduct on its part from which an inference of bad faith could be deduced.
The insured pled that State Farm “purposefully, willfully, maliciously … or knowingly breached its duty of good faith and fair dealing in its contractual obligations … [when it] misrepresented the status of its review of the plaintiff's claim in an effort to delay and/or reduce the payment of monies due under the policy of insurance.” State Farm countered that the allegation was nothing more than a conclusory statement. However, the court sided with the insured, holding that when viewing the complaint in the manner most favorable to sustaining its legal sufficiency, these allegations reach the level of bad faith.
The Mamudi decision teaches this lesson: Where an insured pleads conclusory allegations of bad faith, a trial court will likely allow the claim to survive the pleadings stage, absent some other defect or impediment. This, of course, does not mean that the insured will ultimately be successful in proving bad faith. It does, however, mean as a practical matter that the insured can proceed with discovery on the bad faith issue. Challenging routine, conclusory allegations in bad faith complaints often results in leave to amend being granted. The outcome: a better written complaint against the insurer, and a better educated opponent.