Jon Campisi Apr. 30, 2013, 6:48am

A federal judge in Philadelphia has dismissed without prejudice a bad faith claim that had been lodged against an automobile insurance company by a Philadelphia couple over allegations that the defendant refused to issue underinsured motorist benefits arising out of a vehicle accident in Philadelphia back in late 2009.

U.S. District Judge Edmund V. Ludwig, sitting in the Eastern District of Pennsylvania, issued an April 26 memorandum and order granting a motion to dismiss that had been filed by Progressive Advanced Insurance Company in its case with Kelly Anne Clark and her husband, Robert Clark.

The Clarks filed suit against Progressive in October 2012 over allegations of breach of contract and bad faith stemming from a Nov. 1, 2009, auto accident involving Kelly Anne Clark and a woman identified as Janet Mackenzie.

Clark was apparently rear-ended by Mackenzie at a stop sign at Nanton and Knights Roads in Philadelphia.

The accident allegedly caused Kelly Clark to sustain multiple injuries requiring extensive medical treatments and surgical procedures.

The complaint stated that Mackenzie was an underinsured motorist as per the limits of her auto insurance policy.

Safe Insurance Company, Mackenzie’s insurer, tendered its coverage of $15,000 arising out of the accident, although the plaintiffs sought underinsured motorist benefits from their insurance company in the amount of $300,000 for Kelly Clark’s multiple injuries and for resultant medical bills and loss of earning capacity due to the vehicle accident.

The record shows that Progressive made the plaintiffs an offer of $18,578, which the couple considered inadequate.

In their suit, the couple also alleged that Progressive engaged in “arbitrary and capricious” conduct entitling them to damages for statutory bad faith, including compensatory and punitive damages, as well as costs and attorney fees.

In his memorandum and order last week, Ludwig  wrote that the plaintiffs’ argument that the insurance company’s offer was “unreasonable under any circumstances,” that Progressive has “failed to make a good faith offer,” and that the defendant has “arbitrarily and capriciously failed to act in good faith in the settlement of this claim” are legal conclusions, not facts, and therefore “must be disregarded.”

“Based on the facts set forth in the complaint, plaintiffs appear to have been insureds under a policy issued by defendant that contains underinsured motorist coverage; they sustained injury as a result of a collision with an underinsured motorist; they complied with the terms of the Progressive policy in making an underinsured claim; and Progressive made an offer to cover plaintiffs’ losses that was not acceptable to plaintiffs,” the judicial memorandum states. “These facts are not sufficient to state a plausible claim for relief under Pennsylvania’s bad faith statute, and Count II of the complaint must therefore be dismissed.”

The record shows that the complaint was originally filed at the Philadelphia Court of Common Pleas, but attorneys for Progressive soon moved to transfer the case to the federal venue because of diversity in citizenship.

The removal notice, which had been filed back on Nov. 1, 2012, by Pittsburgh, Pa. attorney Daniel J. Twilla, of the firm Dapper, Baldasare, Benson, Behling & Kane, and King of Prussia, Pa. attorney Karl Stefan, of Forry Ullman, stated that the U.S. District has original jurisdiction because the insurance company is not a Pennsylvania corporation, nor does it have its principal place of business in the commonwealth.

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