The insured's breach of contract and bad faith claims were dismissed based upon the suit limitation provision and the statute of limitations. Mail Quip, Inc. v. Allstate Ins. Co., 2019 U.S. LEXIS 87923 (E.D. Pa. May 23, 2019). 

    Plaintiff alleged that on March 17, 2015, an ink cartridge refill machine used in its business was "misappropriated." The machine was insured by Allstate through a Commercial Property policy which insured for theft of machinery and equipment. Plaintiff alleged that it discovered the misappropriation of the machine on April 6, 2017, when it saw the machine listed for sale on eBay by an entity unknown to Plaintiff. Plaintiff alleged it never received any compensation for the sale of the machine. The machine had a value of $10,429 at the time of the theft. Plaintiff alleged it filed a claim with Allstate, but did not allege the date it did so.

    Allstate moved to dismiss. The suit limitation provision required an action be brought within two years after the date on which the direct physical loss or damages occurred. The Amended Complaint alleged that the date of loss was March 17, 2015, but suit was not filed until January 16, 2019. Plaintiff argued that Allstate could not enforce the suit limitation provision without a showing of prejudice. The court disagreed. Under Pennsylvania law, an insurer did not have to prove prejudice to enforce the suit limitation provision. 

    Allstate also moved to dismiss the bad faith claim, arguing it was untimely under the two-year statute of limitations. Plaintiff argued that the court could not consider the denial letter attached to Allstate's motion to dismiss. The amended complaint alluded to plaintiff's benefits being denied but did not state when it submitted its claim to Allstate or what the outcome of the claim was. If the court were to ignore this denial of benefits, and specifically the date on which the benefits were denied, a plaintiff with a legally deficient claim could survive a motion to dismiss simply by failing to attach a dispositive document on which it relied.

    The notice of denial showed that Allstate denied plaintiffs claim for benefits relating to the misappropriation of the machine on February 3, 2016. This allowed plaintiff two years, or until February 3, 2018, to file a claim for bad faith under the statute. Yet, plaintiff did not file its claim until January 16, 2018, almost a year too late. Therefore, the bad faith claim was untimely and had to be dismissed.