                                                              NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                ____________

                                    No. 12-1681
                                   _____________

                                  ANGELA SMITH,
                                             Appellant

                                         v.

        STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
                          ______________

             APPEAL FROM THE UNITED STATES DISTRICT COURT
               FOR THE EASTERN DISTRICT OF PENNSYLVANIA
                            (D.C. Civil No. 11-cv-07589)
                  District Judge: Honorable Mary A. McLaughlin
                                   ____________

                      Submitted Under Third Circuit LAR 34.1(a)
                                 November 2, 2012
                                   ____________

              Before: SLOVITER, AMBRO and BARRY, Circuit Judges

                         (Opinion Filed: November 27, 2012)
                                   ____________

                                     OPINION
                                   ____________

BARRY, Circuit Judge

      Angela Smith appeals from a Rule 12(b)(6) dismissal of the two remaining counts

of her three-count complaint against State Farm Mutual Automobile Insurance Company

(“State Farm”). We will affirm.
                                    I. Background


      On February 24, 2010, Smith was injured in an automobile accident caused by

Brian Griffaton. Her injuries included herniated discs and cervical radiculopathy. Smith

learned that Griffaton had only a $15,000 policy with Nationwide, and so, on October 25,

2010, she filed a claim with State Farm, with which she had a policy for Underinsured

Motorist (“UIM”) coverage of up to $45,000.

      We summarize those events which led to the issue now before us:

      October 27, 2010:    Adjuster Kevin McDonnell is assigned to Smith’s
                           UIM claim. He requested further information and
                           documentation, including total liability insurance
                           available to Smith, a proposed release for the third
                           party claim, an affidavit of all household insurance
                           policies, and authorization to review her medical
                           payments file.

      December 2, 2010: State Farm consented to Smith’s $15,000 settlement
                        with Nationwide, Griffaton’s insurer, and waived
                        subrogation.

      December 8, 2010: Smith supplied medical records and noted her excess
                        medical bills were currently $26,474.

      January 3, 2011:     Smith provided an affidavit of no health insurance and
                           demanded full tender of the $45,000 UIM limit.

      January 7, 2011:     State Farm repeated its October 27th request for
                           authorization, stating that it needed the authorization to
                           obtain pre-accident health records as well as a pre-
                           accident workers’ compensation claim.

      January 26, 2011:    Smith returned the requested authorization and
                           disclosed her pre-accident healthcare providers.
                           Again, she demanded the $45,000 coverage limit.


                                            2
      March 22, 2011:    Smith supplied additional health records and reiterated
                         her demand for $45,000.

      April 13, 2011:    State Farm made an initial settlement offer of $21,000.

      April 19, 2011:    Smith rejected the $21,000 offer and demanded the
                         $45,000 policy limit within twenty days. Smith stated
                         that the excess medical bills now totaled more than
                         $28,000.

      April 20, 2011:    Recognizing that negotiations had reached an impasse,
                         State Farm requested the necessary tax information to
                         issue payment of the initial $21,000 offer, to serve as a
                         minimum recovery pending further negotiations.
                         McDonnell advised he did not have the authority to
                         resolve Smith’s claim at the demanded $45,000 policy
                         limit.

      April 25, 2011:    Smith reiterated her April 19th demand for $45,000 to
                         be paid within twenty days of the April 19th letter.

                         State Farm paid Smith $21,000 and emphasized the
                         payment was made without prejudicing her right to
                         receive a higher amount after further negotiations.

      May 11, 2011:      McDonnell again advised he did not have authority to
                         resolve the claim for $45,000 and requested any
                         additional information or a different demand.

      August 19, 2011:   Smith provided an additional medical report and
                         demanded that the remaining $24,000 of the policy
                         limit be paid within twenty days. Smith claimed that
                         excess medical bills had reached nearly $30,000.

      August 25, 2011:   State Farm increased its settlement offer to $32,225,
                         inclusive of its previous $21,000 payment, and
                         requested a response.

      Smith responded on November 16, 2011 by filing a three-count complaint against

State Farm in the Court of Common Pleas of Philadelphia County. The complaint

                                          3
asserted claims for bad faith under 42 Pa. Cons. Stat. § 8371 (“§ 8371”) (Count I);

violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law

(“UTPCPL”), 73 Pa. Cons. Stat. § 201-1, et seq. (Count II); and breach of contract

(Count III). On December 12, 2011, State Farm removed the case to the District Court

based on diversity jurisdiction, and soon thereafter, moved to dismiss under Rule

12(b)(6). On February 16, 2012, the District Court granted State Farm’s motion as to

Counts I and II and remanded Count III. Smith timely appealed.

                          II. Jurisdiction & Standard of Review

         The District Court exercised jurisdiction pursuant to 28 U.S.C. § 1332(d). We

have jurisdiction pursuant to 28 U.S.C. § 1291. Our review of an order granting a Rule

12(b)(6) dismissal is plenary. Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188

(3d Cir. 2006). We must decide whether the complaint 1 contains “sufficient factual

matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,

570 (2007)). Although we must accept as true the complaint’s allegations and

reasonable inferences drawn therefrom, we “need not credit a complaint’s bald assertions

or legal conclusions.” Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.

1997).




1
 A court can also look to exhibits attached to the complaint and matters of public record.
McTernan v. City of York, Penn., 577 F.3d 521, 526 (3d Cir. 2009) (citing Lum v. Bank of
Am., 361 F.3d 217, 221 n.3 (3d Cir. 2004)).
                                             4
                                        III. Analysis

                                   A. Bad Faith (Count I)

       A claim based on an insurer’s bad faith conduct against an insured is recognized in

Pennsylvania by means of § 8371. Pennsylvania courts define bad faith in this context as

“[a] frivolous or unfounded refusal to pay proceeds of a policy . . . a breach of a known

duty (i.e., good faith and fair dealing), through some motive of self-interest or ill will;

mere negligence or bad judgment is not bad faith.” Nw. Mut. Life Ins. Co. v. Babayan,

430 F.3d 121, 137 (3d. Cir. 2005) (citing Terletsky v. Prudential Prop. & Cas. Ins. Co.,

649 A.2d 680, 688 (Pa. Super. Ct. 1994) (quoting Black’s Law Dictionary 139 (6th ed.

1990))). A two-part test is applied to bad faith claims brought under § 8371, both

elements of which must be supported by clear and convincing evidence: (1) whether the

insurer lacked a reasonable basis for denying benefits under the insured’s policy, and (2)

whether the insurer knew or recklessly disregarded the lack of a reasonable basis. See id;

Keefe v. Prudential Prop. & Cas. Ins. Co., 203 F.3d 218, 225 (3d Cir. 2000); Condio v.

Erie Ins. Exch., 899 A.2d 1136, 1142 (Pa. Super. Ct. 2006). “[B]ad faith is not present

merely because an insurer makes a low but reasonable estimate of an insured’s damages.”

Johnson v. Progressive Ins. Co., 987 A.2d 781, 784 (Pa. Super. Ct. 2009) (citing Condio,

899 A.2d at 1142–43).

       On its face, Smith’s complaint (to which was attached copies of the parties’

correspondence) fails to allege a legally sufficient cause of action for bad faith under

§ 8371. The complaint consists of conclusory statements unsupported by facts—State

                                               5
Farm, e.g., “breach[ed] covenants of good faith and fair dealing,” (Compl. ¶ 62(r)), and

“engag[ed] in unfair settlement negotiations.” (Compl. ¶ 62(u)). There are no details

describing what was unfair about the negotiations. Similarly, Smith simply asserts that

State Farm “intentionally misrepresent[ed] coverage in the policy,” (Compl. ¶ 62(d)), and

“misrepresent[ed] facts and its evaluation of Plaintiff’s claim,” (Compl. ¶ 62(k)), without

explaining what those misrepresentations may have been.

       Not only is the complaint replete with broad and conclusory statements, but

several of those statements are plainly contradicted by the facts of the case. Smith states

that State Farm “fail[ed] to properly investigate [her UIM claim],” (Compl. ¶ 62(a)), and

“fail[ed] to timely respond to inquiries and correspondence.” (Compl. ¶ 62(f), (m)). The

course of the parties’ dealings, as seen in the exhibits Smith attached to her complaint

which we have summarized above, clearly does not support these statements. To the

contrary, State Farm promptly opened a claim at Smith’s request, assigned an adjuster

within two days, consented to settlement with the tortfeasor’s insurance company, waived

subrogation, made an initial settlement offer, and issued payment for the initial offer.

There was never a break in communications or a period in which State Farm was

unresponsive. Smith also states that State Farm “fail[ed] to make payments of undisputed

amounts of coverage owed to Plaintiff,” (Compl. ¶ 62(n)). This, too, is incorrect. State

Farm did issue payment for its initial offer, $21,000, even though it was under no duty to

do so. See Keefe, 203 F.3d at 228 (noting an insurer is not required to pay a partial

settlement absent a request from the insured).

                                             6
       There was, to be sure, a disagreement over the amount of the settlement of Smith’s

UIM claim. This, of course, is not unusual. See Johnson, 987 A.2d at 785 (stating that

“[t]he underlying facts involve nothing more than a normal dispute between an insured

and insurer over the value of an UIM claim . . . [a] routin[e] [scenario] in the processing

of an insurance claim.”). However, the failure to immediately accede to a demand for the

policy limit cannot, without more, amount to bad faith. The District Court did not err in

dismissing Count I.

                                  B. UTPCPL (Count II)

       The UTPCPL prohibits “unfair methods of competition” and “unfair or deceptive

acts or practices.” See § 201-2(4) (listing prohibited conduct). It includes a private-

plaintiff standing provision which “creates a private right of action in persons upon

whom unfair methods of competition and unfair or deceptive acts or practices are

employed and who[,] as a result, sustain an ascertainable loss.” Hunt v. U.S. Tobacco

Co., 538 F.3d 217, 221 (3d Cir. 2008) (quoting Toy v. Metro. Life. Ins. Co., 928 A.2d

186, 191 n.4 (citing 73 Pa. Cons. Stat. § 201-9.2) (emphasis added))). Thus, a private

plaintiff pursuing a claim under the UTPCPL must prove justifiable reliance. Id. at 221

& 224 (citing Pennsylvania authority, including Weinberg v. Sun Co., 777 A.2d 442, 446

(Pa. 2001) and Schwartz v. Rockey, 932 A.2d 885, 897 n.16 (Pa. 2007)).

       Although, as the District Court properly noted, Smith may have alleged wrongful

conduct, she did not allege actions pursued on the basis of that conduct. Because

justifiable reliance is a necessary element for standing under the UTPCPL’s private-

                                              7
plaintiff standing provision, and reliance cannot be presumed, Hunt, 538 F.3d at 227, the

District Court did not err in dismissing Count I. 2

                                      IV. Conclusion

       The order of the District Court will be affirmed.




2
 Given this disposition, we need not reach the issue of whether Smith also failed to
allege other essential elements of a UTPCPL claim, namely deceptive or fraudulent
conduct by State Farm.
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