Bad Faith Suit Requires Specificity About What Was Unfair
Pro Se Plaintiff Needed a Lawyer
Post number 5292
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In Sean Shurelds v. SAFECO Insurance Company of America, a/k/a Liberty Mutual, Civil Action No. 25-cv-1550, United States District Court, E.D. Pennsylvania (February 11, 2026) Plaintiff Sean Shurelds, acting pro se, filed suit against Safeco Insurance Company of America alleging bad faith insurance practices, fraudulent misrepresentation, and negligence with the USDC giving him several attempts to sufficiently allege facts to state a cause against SAFECO.
Shurelds had purchased a landlord protection policy for his Philadelphia property, which was in effect from November 28, 2023, to November 28, 2024. After his tenant abandoned the property and unauthorized occupants caused extensive damage, Shurelds submitted five insurance claims to Safeco. Safeco denied all of these claims, citing the damage as normal wear and tear. One claim was referred to law enforcement for alleged insurance fraud.
Law
The legal dispute centers on claims of statutory bad faith insurance practices under Pennsylvania law. Shurelds’ original complaint included additional claims for fraudulent misrepresentation and negligence, which were dismissed with prejudice by the court.
The case proceeded with only the statutory bad faith claim, and later Shurelds sought to add claims for emotional distress and slander; only these two were permitted to proceed. Ultimately, Shurelds filed a Second Amended Complaint asserting eight claims, but none for emotional distress or slander.
Discussion
Safeco moved to dismiss all claims in the Second Amended Complaint. The court reviewed the factual history, including the timeline of Shurelds’ insurance claims and Safeco’s responses. The court noted that Safeco’s denial of the claims was based on its assessment that the property damage resulted from normal wear and tear, not covered losses. The referral of one claim to a detective for suspected insurance fraud further complicated the dispute.
Analysis
The court found that Shurelds failed to state viable claims beyond statutory bad faith, and even that claim was insufficiently supported by facts.
To survive a motion to dismiss, a complaint must include sufficient factual matter, taken as true, to show that the claim is facially plausible. 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.
Under Pennsylvania law, a party may recover certain damages if an insurer acted in bad faith. To establish a bad faith insurance claim under section 8371, a plaintiff must establish by clear and convincing evidence, (1) the insurer did not have a reasonable basis for denying benefits under the policy, and (2) that the insurer knew or recklessly disregarded its lack of a reasonable basis in denying the claim.
A plaintiff cannot merely say that an insurer acted unfairly but instead must describe with specificity what was unfair.
The Court gave Shurelds multiple opportunities to amend his complaint. Despite these opportunities, he has not raised anything suggesting a cognizable claim. Accordingly, the Court found that allowing any additional amendments is futile.
The court granted Safeco’s motion to dismiss in its entirety, dismissing the Second Amended Complaint with prejudice.
The decision underscores the importance of providing specific factual allegations and legal grounds when asserting insurance bad faith and related claims in federal court.
ZALMA OPINION
It has become axiomatic that a person not a lawyer who represents himself in litigation has a fool for a client. In this case, the USDC, trying to help the Plaintiff, gave him several attempts to amend the complaint to allege with sufficient specificity a viable bad faith claim. He failed and with patience of the USDC was exhausted and the case dismissed.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
DOJ Creates National Fraud Enforcement Division
Will the Feds Take on Insurance Fraud? Possibly as Part of a National Anti-Fraud Effort
On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...
When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment
Post number 5345
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In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.
FACTS
American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...
Breach of a Specific Condition Precedent Is a Complete Defense
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In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.
Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).
After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
What Must be Done after Notice of a Claim is Received by the Insurer
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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...
