MEMORANDUM

LAWRENCE F. STENGEL, District Judge.

This homeowner's insurance dispute was removed to this court based on diversity of citizenship. Plaintiffs Samuel and Tori Morrissey assert several state law claims against their insurer State Farm. State Farm moves to dismiss two counts: the bad faith claim and the state consumer law claim. For the reasons explained below, I will grant the defendant's motion.

I. Background1

On December 12, 2012, the plaintiffs' residence located at 107 West Franklin Street, Womelsdorf, Berks County, Pennsylvania was damaged by a fire, making it uninhabitable. The plaintiffs had a homeowners' insurance policy with State Farm for the Franklin Street residence with coverage limits of $220,000 for the house, $165,000 for personal property, and the actual value of the loss of use sustained.2 The plaintiffs filed an insurance claims for damage to the actual home, damage to their personal property in the amount, and costs for alternative housing while the home was being repaired.3

The defendant investigated the plaintiffs' claims. On April 5, 2013, the defendant took a sworn statement of Plaintiff Samuel W. Morrissey. On September 13, 2013, the defendant took a second sown statement of Mr. Morrissey. On October 7, 2013, State Farm sent the plaintiffs a letter indicating it had concluded its investigation and extended insurance coverage to the plaintiffs.4 On December 30, 2013, the plaintiffs received a check for $111,886.50 made payable to the plaintiffs, their lawyer, and Bank of America, N.A. This check was for the claim on damage to the home itself.5

Mr. Morrissey made repeated requests for Bank of America to endorse the check so that repair work could begin on the residence. Bank of America refused because they were no longer the holder of the mortgage. On January 21, 2014, plaintiffs' counsel returned the settlement check to the defendant and requested that it be re-issued to the plaintiffs, plaintiffs' counsel, and Nationstar Mortgage Co.6 On January 22, 2014, the State Farm adjuster Mary McClenaghan responded by letter to plaintiffs' counsel, stating in part, "Bank of America was the mortgage company at the time of loss and State Farm Insurance Company's Underwriting Department does not permit the changing of the mortgage companies because Nationstar was not the mortgage company at the time of the loss."7 McClenaghan indicated that she had asked Bank of America to endorse the settlement check, yet they again refused.

Sometime after January 27, 2014, plaintiffs' counsel set up a conference call between himself, Ms. McClenaghan, and Nationstar. During the call Nationstar explained to Ms. McClenaghan what was needed to process the settlement check addressed to Nationstar, not Bank of America. On April 9, 2014, plaintiff's counsel received the settlement check from the defendant and was able to process it.

On March 27, 2014, the plaintiffs filed a "Writ of Summons" and "Plaintiffs' Notice of Records Deposition in Aid of Drafting a Complaint," after receiving a letter that State Farm would terminate their alternative housing at the end of July. The latter motion for pre-complaint discovery was litigated in state court in Berks County, Pennsylvania. Eventually, the state court judge directed the plaintiffs to file their complaint without the requested discovery by August 15, 2014.8 The plaintiffs filed their complaint in Berks County on August 11, 2014. The defendant removed the action to this court on September 10, 2014 based on diversity of citizenship under 28 U.S.C. § 1332. On September 18, 2014, the plaintiffs moved to remand to state court. I denied this motion. The plaintiffs amended their complaint in response to a motion to dismiss part of the original complaint. The defendant then moved to dismiss Counts V and VI of the amended complaint.9

II. Discussion10

a. Bad Faith Claim (Count VI)

The plaintiffs claim, inter alia, that the defendant violated Pennsylvania's bad faith statute by: 1) issuing the settlement check over one year after the fire occurred; 2) delaying reissuing the check for three and a half months "for no valid reason;" 3) filing "boilerplate objections to Plaintiff's discovery in this action for the purpose of preventing the drafting of a Complaint to get an advantage in this case;" 4) arbitrarily refusing to settle their claims; and 5) breaching fiduciary duties and other state laws.11 The plaintiffs claim these actions prejudiced their claims against the defendant.

Pennsylvania's bad faith statute allows a plaintiff to recover interest, punitive damages, court costs, and/or attorney's fees if an insurer has acted in bad faith in handling a claim.12 In order to show bad faith, a claimant must ultimately establish by clear and convincing evidence both that: 1) the insurer lacked a reasonable basis for denying benefits; and 2) the insurer knew or recklessly disregarded its lack of reasonable basis. Northwestern Mut. Life Ins. Co. v. Babayan, 430 F.3d 121, 137 (3d Cir. 2005) (citing Keefe v. Prudential Prop. & Cas. Ins. Co., 203 F.3d 218, 225 (3d Cir. 2000)). See also Terletsky v. Prudential Prop. & Cas. Ins. Co., 649 A.2d 680, 688-89 (Pa. Super. 1984). "Bad faith claims are fact specific and depend on the conduct of the insurer vis à vis the insured."13 Condio v. Erie Ins. Exchange, 899 A.2d 1136, 1143 (Pa. Super. 2006)(citing Williams v. Nationwide Mutual Ins. Co., 750 A.2d 881, 887 (Pa. Super. 2000)).

Even after viewing all reasonable inferences in the light most favorable to the plaintiffs, I cannot find that the plaintiffs have sufficiently alleged that the defendant acted in bad faith. They have not provided factual information to show that the defendant lacked a reasonable basis for delaying payment of their benefits. They have not offered information about repeated attempts to negotiate with the defendant to which the defendant was non-responsive.14 They offer no facts to explain why the defendant's delay in settling was "arbitrary." They have not indicated that the insurer's investigation was unwarranted or inadequate.15 Instead, the plaintiffs simply assert that payment of benefits a year after the fire was unreasonable and that the defendant acted in bad faith by "arbitrarily failing and refusing to settle [their] claims in good faith." While "[d]elay is a relevant factor in determining whether bad faith has occurred," Kosierowski v. Allstate Ins. Co., 51 F.Supp.2d 583, 588 (E.D. Pa. 1999)(citing Klinger v. State Farm Mut. Auto. Ins. Co., 115 F.3d 230, 234 (3d Cir. 1997)),16 delay in itself is not a basis for a bad faith claim, if the insurer had a reasonable basis for the delay. See, e.g., O'Donnell ex rel. Mitro, 734 A.2d at 907-08; Post v. St. Paul Travelers Ins. Co., 691 F.3d 500, 523 (3d Cir. 2012). The plaintiffs have offered no facts to show that the defendant lacked a reasonable basis for delaying the plaintiffs' settlement. Even assuming that defendant acted unreasonably in delaying payment of benefits, the plaintiffs have not offered evidence of the second prong. They have not provided facts to show that the defendant knew or disregarded a lack of a reasonable basis.17

The plaintiffs' allegations that the defendant acted in bad faith during this litigation by filing "boilerplate objections to Plaintiff's discovery in this action for the purpose of preventing the drafting of a Complaint to get an advantage in this case" also do not show bad faith. Bad faith may extend to the misconduct of the insurer during the pendency of litigation. O'Donnell ex rel. Mitro, 734 A.2d at 906. See Babayan, 430 F.3d at 137. However, the defendant's objections to the plaintiff's request for pre-complaint discovery were not unreasonable.18 The plaintiffs' allegation that these objections were meant to give the defendant an advantage are unsupported and merely conclusory.

These "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice" to state a valid cause of action. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009)).19 The plaintiff has failed to assert a plausible bad faith claim under Pennsylvania law.20

b. UTPCPL Claim (Count V)

The plaintiffs support their Unfair Trade Practices and Consumer Protection Law (UTPCPL) claim with the exact same actions used to make out their bad faith claim. These allegations also fail to assert a plausible UTPCPL claim. Pennsylvania's UTPCPL allows a person "who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property" to bring a private action to recover the loss, attorney's fees, and costs.21 The law is designed to protect consumers from "fraud and unfair or deceptive business practices."22 Commonwealth ex rel. Corbett v. People's Benefit Svcs., Inc., 923 A.2d 1230, 1236 (Pa. Commw. Ct. 2007) (citation omitted). "To bring a private cause of action under the UTPCPL, a plaintiff must show that he justifiably relied on the defendant's wrongful conduct or representation and that he suffered harm as a result of that reliance." Yocca v. Pittsburgh Steelers Sports, Inc., Inc., 854 A.2d 425, 438 (Pa. 2004). See also Hunt v. United States Tobacco Co., 538 F.3d 217, 221-22 (3d Cir. 2008).

The Third Circuit has made clear: "[i]n Pennsylvania, only malfeasance, the improper performance of a contractual obligation, raises a cause of action under the [UTPCPL], and an insurer's mere refusal to pay a claim which constitutes nonfeasance, the failure to perform a contractual duty, is not actionable." Gardner v. State Farm Fire & Cas. Co., 544 F.3d 553, 564 (3d Cir. 2008)(quoting Horowitz v. Federal Kemper Life Assur. Co., 57 F.3d 300, 307 (3d Cir. 1995) (citations omitted)).23

Drawing all inferences in the light most favorable to the plaintiffs, the defendant's delays in first issuing of the dwelling check and then re-issuing the check may show malfeasance or indicate improper performance of the contractual obligation.24 However, the plaintiffs fail to show how they justifiably relied on the defendant's conduct to their detriment. See Hunt v. U.S. Tobacco Co., 538 F.3d 217, 222-23 (3d Cir. 2008). The plaintiffs also fail to allege any "fraudulent" or "deceptive" conduct on the part of the defendant during the settlement process of during the litigation.

The plaintiffs also argue the defendant's termination of their alternative housing coverage at the end of July 2014 was a UTPCPL violation. Even assuming that the defendant's termination of the plaintiffs' housing coverage was improper under their contractual provisions, it would be nonfeasance (i.e. failure to perform the contractual duty), not malfeasance (i.e. improper performance of the contractual duty).25 The plaintiffs have also failed to state a plausible UTPCPL claim.26

III. Conclusion

For the foregoing reasons, I will grant the defendant's motion to dismiss the plaintiff's bad faith claim (Count VI) and UTPCPL claim (Count V).27

An appropriate Order follows.