Bad Faith Insurance Complaint - Delaware

COMPLAINT FOR BREACH OF INSURANCE CONTRACT AND BAD FAITH — DELAWARE

TABLE OF CONTENTS

1. Caption
2. Parties, Jurisdiction, and Venue
3. Factual Background
4. The Policy and the Claim
5. Defendant's Handling of the Claim
6. Count I — Breach of Insurance Contract
7. Count II — Breach of the Implied Covenant of Good Faith and Fair Dealing (Bad Faith)
8. Count III — Declaratory Judgment
9. Damages
10. Prayer for Relief
11. Demand for Trial by Jury
12. Signature and Service Blocks
13. Verification
14. Certificate of Service
15. Delaware Practice Notes
16. Sources and References

1. CAPTION

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

IN AND FOR [NEW CASTLE / KENT / SUSSEX] COUNTY

C.A. No. [________________________________]

VERIFIED COMPLAINT FOR BREACH OF INSURANCE CONTRACT AND BAD FAITH

Plaintiff [PLAINTIFF NAME] ("Plaintiff" or "Insured"), by and through undersigned counsel, brings this action against Defendant [INSURER NAME] ("Defendant" or "Insurer"), and in support thereof alleges as follows:

2. PARTIES, JURISDICTION, AND VENUE

2.1. Plaintiff is an adult individual residing at [ADDRESS] in [COUNTY] County, Delaware, and was so at all times material hereto.

2.2. Defendant [INSURER NAME] is a [corporation / mutual insurance company] organized under the laws of [STATE OF INCORPORATION], with its principal place of business at [ADDRESS], and is authorized to transact and does transact the business of insurance in the State of Delaware.

2.3. This Court has subject-matter jurisdiction pursuant to 10 Del. C. § 541, as this is a civil action at law for monetary damages exceeding the small-claims threshold.

2.4. This Court has personal jurisdiction over Defendant pursuant to 10 Del. C. § 3104 because Defendant transacts business within Delaware and the cause of action arises from Defendant's insurance activities directed at this State.

2.5. Venue is proper in [NEW CASTLE / KENT / SUSSEX] County under 10 Del. C. § 1302 because Plaintiff resides in this County, the Policy was delivered in this County, and/or the loss occurred in this County.

3. FACTUAL BACKGROUND

3.1. On or about [DATE], Plaintiff applied for and obtained from Defendant a policy of [type — e.g., homeowners / automobile / underinsured-motorist / commercial property] insurance, Policy No. [POLICY NUMBER] (the "Policy"), insuring [DESCRIBE INSURED RISK / PROPERTY / VEHICLE].

3.2. The Policy was in full force and effect at all times relevant to this Complaint, with all premiums paid current.

3.3. The Policy obligated Defendant to provide coverage for [LIST APPLICABLE COVERAGES], subject to the terms, conditions, and limits stated therein.

3.4. A true and correct copy of the declarations page of the Policy is attached hereto as Exhibit A and incorporated herein by reference.

4. THE POLICY AND THE CLAIM

4.1. On or about [LOSS DATE], Plaintiff suffered a loss covered under the Policy, specifically: [DESCRIBE LOSS — e.g., fire damage to insured dwelling; auto collision causing bodily injury; theft of insured personal property] (the "Loss").

4.2. Plaintiff promptly notified Defendant of the Loss on or about [DATE OF NOTICE] by [METHOD — phone, written notice of claim, online portal].

4.3. Defendant assigned Claim No. [CLAIM NUMBER] to the matter and undertook to investigate and adjust the claim.

4.4. Plaintiff fully cooperated with Defendant's investigation, including by:

• Submitting a sworn proof of loss on [DATE];
• Sitting for an examination under oath ("EUO") on [DATE], if requested;
• Producing all documents, photographs, receipts, repair estimates, and medical records requested by Defendant;
• Providing access to the insured property and/or person for inspection and/or independent medical examination.

4.5. The amount of the Loss is reasonably ascertainable and is at least $[AMOUNT], which sum is supported by [describe supporting documentation — e.g., independent appraisal, repair estimates, medical bills].

5. DEFENDANT'S HANDLING OF THE CLAIM

5.1. Despite Plaintiff's full cooperation and the clarity of coverage, Defendant has engaged in a pattern of conduct that has unreasonably delayed and/or denied payment of the claim, including but not limited to:

• [Failed to acknowledge the claim within a reasonable time];
• [Failed to assign or appoint a qualified adjuster];
• [Failed to conduct a reasonable investigation];
• [Demanded duplicative or irrelevant documentation as a pretext for delay];
• [Issued an unreasonably low offer not supported by any objective valuation];
• [Denied coverage based on policy exclusions that do not apply on the facts];
• [Failed to affirm or deny coverage within a reasonable time after submission of a complete proof of loss];
• [Misrepresented pertinent facts or policy provisions];
• [Failed to effectuate a prompt, fair, and equitable settlement when liability was reasonably clear].

5.2. On [DATE], Defendant [denied the claim in full / offered $[AMOUNT] / failed to respond] by letter / communication, a copy of which is attached as Exhibit B.

5.3. Defendant's stated grounds for denial or partial payment are pretextual and unsupported by the policy language, the facts, or applicable Delaware law.

5.4. There exists no bona fide dispute as to coverage or the amount of the Loss within the meaning of Casson v. Nationwide Ins. Co., 455 A.2d 361 (Del. Super. 1982).

5.5. Defendant's conduct was, and continues to be, clearly without reasonable justification within the meaning of Tackett v. State Farm Fire & Cas. Ins. Co., 653 A.2d 254 (Del. 1995).

6. COUNT I — BREACH OF INSURANCE CONTRACT

6.1. Plaintiff incorporates Paragraphs 1.1 through 5.5 by reference.

6.2. The Policy is a valid and enforceable contract between Plaintiff and Defendant.

6.3. Plaintiff has performed all conditions precedent under the Policy, including timely premium payment, prompt notice of loss, submission of a sworn proof of loss, and full cooperation with Defendant's investigation.

6.4. Defendant has breached the Policy by failing and refusing to pay the full amount due for the covered Loss.

6.5. As a direct and proximate result of Defendant's breach, Plaintiff has sustained damages in an amount not less than $[AMOUNT], plus consequential damages, pre-judgment interest, and costs.

7. COUNT II — BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING (BAD FAITH)

7.1. Plaintiff incorporates Paragraphs 1.1 through 6.5 by reference.

7.2. Every contract under Delaware law contains an implied covenant of good faith and fair dealing. Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434 (Del. 2005).

7.3. In the first-party insurance context, the implied covenant prohibits an insurer from delaying or refusing payment of a covered claim "clearly without reasonable justification." Tackett, 653 A.2d at 264.

7.4. Defendant breached this covenant by, inter alia:

• Refusing to pay benefits owed under the Policy when liability and the amount of the Loss were reasonably clear;
• Manufacturing pretextual coverage defenses;
• Failing to conduct an objectively reasonable investigation;
• Lowballing settlement offers in disregard of objective valuation evidence;
• Engaging in dilatory tactics designed to coerce Plaintiff into accepting less than the full value of the claim;
• [ADDITIONAL ACTS].

7.5. Defendant's conduct was undertaken with knowledge — or in reckless disregard of the fact — that no reasonable basis existed to deny or delay payment.

7.6. As a direct and proximate result, Plaintiff has suffered the policy benefits wrongfully withheld, plus consequential damages including but not limited to [financial losses, attorneys' fees incurred in pursuit of the claim, and emotional distress where accompanied by physical injury per Tackett].

7.7. Defendant's conduct was further willful, wanton, malicious, and demonstrative of a reckless indifference to Plaintiff's rights, satisfying the Jardel Co. v. Hughes, 523 A.2d 518 (Del. 1987), standard for the imposition of punitive damages.

8. COUNT III — DECLARATORY JUDGMENT

8.1. Plaintiff incorporates Paragraphs 1.1 through 7.7 by reference.

8.2. An actual, ripe, and justiciable controversy exists between Plaintiff and Defendant regarding the parties' rights and obligations under the Policy.

8.3. Pursuant to 10 Del. C. § 6501 et seq. (the Delaware Declaratory Judgment Act), Plaintiff seeks a judicial declaration that:

• The Loss is a covered loss under the Policy;
• No exclusion or condition operates to bar coverage;
• Defendant is obligated to pay policy benefits in the amount of $[AMOUNT], plus pre-judgment interest from the date payment was due.

9. DAMAGES

9.1. Contract Damages. Policy benefits wrongfully withheld in the amount of not less than $[AMOUNT].

9.2. Consequential Damages. Foreseeable losses caused by Defendant's breach, including but not limited to [describe — e.g., additional living expenses incurred while denial pending; lost rental income; cost of borrowing or alternative replacement; financial penalties; out-of-pocket repair costs].

9.3. Pre-Judgment Interest. Pre-judgment interest at the legal rate per 6 Del. C. § 2301 from the date payment was due.

9.4. Punitive Damages. Punitive damages in an amount sufficient to punish Defendant and deter similar conduct, consistent with Jardel and Tackett.

9.5. Attorneys' Fees and Costs. To the extent recoverable under the Policy or applicable law (including the bad-faith exception to the American Rule recognized in appropriate cases).

10. PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully demands judgment against Defendant as follows:

• A. Compensatory damages in the amount of policy benefits wrongfully withheld, in an amount to be proven at trial but not less than $[AMOUNT];
• B. Consequential damages caused by Defendant's breach and bad-faith conduct;
• C. A declaratory judgment that the Loss is covered under the Policy and Defendant is obligated to pay policy benefits in full;
• D. Punitive damages in an amount sufficient to punish and deter;
• E. Pre-judgment and post-judgment interest at the legal rate;
• F. Costs of suit and reasonable attorneys' fees to the extent permitted by law;
• G. Such other and further relief as the Court deems just and proper.

11. DEMAND FOR TRIAL BY JURY

Plaintiff hereby demands a trial by jury on all issues so triable as a matter of right pursuant to Superior Court Civil Rule 38.

12. SIGNATURE AND SERVICE BLOCKS

Date: [DATE]

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], Delaware Bar I.D. No. [####]

[FIRM ADDRESS]

[CITY, STATE ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

Counsel for Plaintiff

13. VERIFICATION

STATE OF DELAWARE

COUNTY OF [COUNTY]

I, [PLAINTIFF NAME], being first duly sworn, depose and say that I am the Plaintiff in the foregoing action; that I have read the foregoing Verified Complaint and know the contents thereof; and that the same is true and correct to my own knowledge, except as to those matters stated upon information and belief, and as to those matters, I believe them to be true.

[________________________________]

[PLAINTIFF NAME]

Sworn to and subscribed before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public

(My Commission Expires: [_______________])

14. CERTIFICATE OF SERVICE

I hereby certify that on this the [____] day of [_______________], 20[____], I caused a true and correct copy of the foregoing VERIFIED COMPLAINT to be served upon Defendant in accordance with Superior Court Civil Rule 4 by [method — e.g., service on Delaware Insurance Commissioner pursuant to 18 Del. C. § 525, certified mail, or process server] at the following address:

[DEFENDANT'S REGISTERED AGENT / SERVICE ADDRESS]

[________________________________]

[ATTORNEY NAME]

15. DELAWARE PRACTICE NOTES

• Cause of action. Delaware recognizes a first-party bad-faith cause of action sounding in contract (breach of the implied covenant of good faith and fair dealing). Tackett v. State Farm, 653 A.2d 254 (Del. 1995). The Delaware Supreme Court has not adopted a tort theory of bad faith in the first-party context.

• Standard of liability. The insurer's conduct must be "clearly without reasonable justification." A bona fide dispute defeats a bad-faith claim. Casson v. Nationwide, 455 A.2d 361 (Del. Super. 1982).

• No private right of action under § 2304. 18 Del. C. § 2304 (Unfair Trade Practices in the Insurance Business) is enforced exclusively by the Delaware Insurance Commissioner. See 18 Del. C. §§ 2308–2312. Plaintiffs may not sue directly under § 2304, but the statutory standards may inform the reasonableness analysis under Tackett.

• Punitive damages. Recoverable in cases of intentional or malicious breach. Tackett at 265–66; Jardel Co. v. Hughes, 523 A.2d 518 (Del. 1987). Plead specific facts of willful, wanton, or recklessly indifferent conduct.

• Statute of limitations. Three (3) years for the contract and bad-faith claims under 10 Del. C. § 8106. The statute begins to run when the breach occurs, generally when payment becomes due and is not made.

• Damages cap on emotional distress. Under Tackett, emotional-distress damages are not recoverable in bad-faith cases absent accompanying physical injury.

• Forum. Superior Court has jurisdiction over money-damages claims. The Court of Chancery is appropriate only where equitable relief (e.g., reformation, specific performance) is the primary remedy.

• DOI parallel complaint. Filing a parallel complaint with the Delaware Department of Insurance (insurance.delaware.gov) preserves regulatory leverage. The DOI cannot adjudicate the civil claim but may assist in obtaining records and may bring administrative enforcement.

• Service on insurer. Foreign insurers authorized to do business in Delaware have appointed the Insurance Commissioner as their agent for service of process under 18 Del. C. § 525.

• ERISA caution. If the insurance is provided through an employer-sponsored welfare-benefit plan, claims for benefits and bad-faith damages may be preempted by ERISA, 29 U.S.C. § 1001 et seq. See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987). Verify plan status before filing in state court.

16. SOURCES AND REFERENCES

• Tackett v. State Farm Fire & Cas. Ins. Co., 653 A.2d 254 (Del. 1995) — https://law.justia.com/cases/delaware/supreme-court/1995/653-a-2d-254-1.html
• Casson v. Nationwide Ins. Co., 455 A.2d 361 (Del. Super. 1982) — https://law.justia.com/cases/delaware/superior-court/1982/455-a-2d-361-5.html
• Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434 (Del. 2005) — https://caselaw.findlaw.com/court/de-supreme-court/1481318.html
• Jardel Co. v. Hughes, 523 A.2d 518 (Del. 1987) — https://law.justia.com/cases/delaware/supreme-court/1987/523-a-2d-518-4.html
• 18 Del. C. § 2304 (Unfair Practices in the Insurance Business) — https://delcode.delaware.gov/title18/c023/index.html
• 10 Del. C. § 8106 (statute of limitations) — https://delcode.delaware.gov/title10/c081/index.html
• Delaware Department of Insurance — https://insurance.delaware.gov/
• Delaware Superior Court Civil Rules — https://courts.delaware.gov/superior/rules.aspx

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. A Delaware-licensed attorney must review and customize this document before filing. Statutes, rules, and case law change frequently; verify all authorities before use.