Reliance on Expert Opinion Avoids Claim of Bad Faith
Post 5009
Read the full article at https://lnkd.in/gXxK7AQx, see the full video at https://lnkd.in/gaH7yAJM and at https://lnkd.in/g_3Ss3wn, and at https://zalma.com/blog plus more than 5000 posts.
Denying a Church’s Claim Based on an Expert’s Report is not Evidence of Bad Faith
Lakeside Evangelical Congregational Church sued Church Mutual Insurance Company (CMIC), for Breach of Contract and for Bad Faith stemming from CMIC’s alleged failure to provide insurance payments for roof damage caused by hail. CMIC moved to dismiss Count II (the Bad Faith count of its suit).
In Lakeside Evangelical Congregational Church v. Church Mutual Insurance Company, No. 2:24-CV-00859-MJH, United States District Court, W.D. Pennsylvania, Pittsburgh (March 3, 2025) the District Court applied the rule that an insurer relying on an expert report is not acting in bad faith when it denies a claim.
BACKGROUND
Lakeside alleged that the roof of its church sustained wind and hail damage from a June 16, 2022 storm. CMIC denied the claim, based on the opinions of its Forensic Engineer, James Graf, who concluded the damage to the roof was not the result of hail damage; but rather, the balding and blemishes on the roof shingles were consistent with a manufacturing defect, a non-covered cause of loss.
Lakeside alleged because CMIC refused to pay benefits pursuant to the policy, CMIC breached the insurance contract, for which Lakeside claimed damages in the amount of $146,016.72. In addition the First Amended Complaint alleged that CMIC acted in bad faith.
The basis of the church’s suit was that its public adjuster opined that CMIC acted without justification and in disregard of their insureds’ rights under the policy of insurance.
RELEVANT STANDARD
A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The purpose of a motion to dismiss is to streamline litigation by dispensing with needless discovery and fact finding.
DISCUSSION
CMIC argued that Lakeside’s Bad Faith claim should be dismissed, because its reliance upon Mr. Graf’s engineering report provides a reasonable basis for its denial of Lakeside’s roof hail damage claim.
To succeed on a bad faith claim, a plaintiff-insured must prove, by clear and convincing evidence:
1. that the insurer did not have a reasonable basis for denying benefits under the policy; and
2. that the insurer knew of or recklessly disregarded its lack of a reasonable basis in denying the claim.
An insurer simply must show that it had a reasonable basis for a coverage decision based on the information available at the time the decision was made. Reliance upon an expert report is a reasonable basis to deny an insurance claim. The insurance company is not required to show that the process by which it reached its conclusion was flawless or that the investigatory methods it employed eliminated possibilities at odds with its conclusion.
The basis for Lakeside’s Bad Faith claim stems solely from CMIC’s decision that hail damage was not the cause of the condition of Lakeside’s roof. Lakeside’s criticism of Mr. Graf’s report derives from Lakeside’s public adjuster, Jason Cortazzo’s, disagreement with the report. Regardless of which, if either, expert opinion is ultimately determined to be correct, for purposes of a bad faith claim, CMIC is entitled to rely upon on its own expert opinion in relation to the decision it made. Under these circumstances and allegations, Lakeside’s Amended Complaint failed to support a bad faith claim.
Accordingly, CMIC’s Motion to Dismiss Count II of the Amended Complaint was granted and dismissed without prejudice.
ZALMA OPINION
To prove a case for the tort of bad faith, as alleged by Lakeside, the insured must show that the insurer wrongfully, maliciously, unreasonably, and recklessly refused the claim. In this case the insurer relied on the expertise of a qualified engineer and the insured relied on the expertise of a public adjuster. Regardless of which expert was correct relying upon a qualified expert’s opinion is evidence of the good faith of the insurer who made its decision based on a competent expert’s opinion creating a genuine dispute between the insured and the insurer.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://barryzalma.substack.com/subscribe
Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg
Go to the Insurance Claims Library – https://lnkd.in/gwEYk
Louisiana Statute Prevents Enforcement of Contract Term Requiring Arbitration of Disputes
Post 5241
Read the full article at https://www.linkedin.com/pulse/international-convention-requiring-enforcement-award-barry-sttdc, see the video at and at and at https://zalma.com/blog plus more than 5200 posts.
In Town of Vinton v. Indian Harbor Insurance Company, Nos. 24-30035, 24-30748, 24-30749, 24-30750, 24-30751, 24-30756, 24-30757, United States Court of Appeals, Fifth Circuit (December 8, 2025) municipal entities including the Town of Vinton, et al sued domestic insurers after dismissing foreign insurers with prejudice. The insurers sought arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”) but the court held Louisiana law — prohibiting arbitration clauses in such policies—controls, as the Convention does not apply absent foreign parties who ...
Refusal to Provide Workers’ Compensation is Expensive
Post 5240
Read the full article at https://lnkd.in/guC9dnqA, see the video at https://lnkd.in/gVxz-qmk and at https://lnkd.in/gUTAnCZw, and at https://zalma.com/blog plus more than 5200 posts.
In Illinois Department of Insurance, Insurance Compliance Department v.USA Water And Fire Restoration, Inc., And Nicholas Pacella, Individually And As Officer, Nos. 23WC021808, 18INC00228, No. 25IWCC0467, the Illinois Department of Insurance (Petitioner) initiated an investigation after the Injured Workers’ Benefit Fund (IWBF) was added to a pending workers’ compensation claim. The claim alleged a work-related injury during employment with the Respondents who failed to maintain workers’ compensation Insurance.
Company Overview:
USA Water & Fire Restoration, Inc. was incorporated on January 17, 2014, and dissolved on June 14, 2019, for failure to file annual reports and pay franchise taxes. It then operated under assumed names including USA Board Up & Glass Co. and USA Plumbing and Sewer. The business ...
Arsonist Incompetently Moves Pro Se to Avoid Prison
Post 5239
Read the full article at https://lnkd.in/gRX8TfKn, see the video at https://lnkd.in/gY3Jvnqp and at https://lnkd.in/gRCaaf-3, and at https://zalma.com/blog plus more than 5200 posts.
In Christopher A. Barosh v. Morris Houser, et al., Civ. No. 22-0769, United States District Court, E.D. Pennsylvania (November 25, 2025) a convicted arsonist and insurance fraudster moved the USDC acting in Pro se filed Objections to Magistrate Judge Reid’s Recommendation that the US District Judge dismiss his § 2254 Petition to avoid jail.
BACKGROUND
In October 2005, Barosh set fire to his girlfriend’s Philadelphia home — some 25 hours before the cancellation of the property’s insurance policy. Several witnesses saw Barosh leaving the property shortly before the fire erupted. After the fire, Barosh made “two separate admissions of guilt.”
He attempted to pay an acquaintance to provide him with an alibi for the time of the arson. The eyewitnesses, brother, and ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
