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April 6, 1984


The opinion of the court was delivered by: BECHTLE


 This is a diversity action in which plaintiff, Thomas M. Olkowski, alleges that defendant, The Prudential Insurance Company of America, has wrongfully refused to pay medical expenses incurred by plaintiff's wife, Mary Ann Olkowski. Presently before the court is defendant's motion to dismiss count III of the complaint in which plaintiff sets forth a claim of fraudulent misrepresentation.


 In February, 1981, plaintiff's employer, M&S Foreign Car Service Company ("M&S Company"), contracted with defendant for the purpose of having defendant provide group health insurance coverage for the employees of M&S Company. The policy, in addition to protecting plaintiff, extended coverage to plaintiff's spouse. Plaintiff paid the required premiums through February, 1982, and also received a card which plaintiff alleges guaranteed that defendant would pay any medical expenses incurred by plaintiff or his spouse.

 In December, 1981, plaintiff's wife became ill and required medical treatment until her death in February, 1982. During his wife's illness plaintiff presented his card to each physician and health care institution which rendered services to his wife. Defendant subsequently refused to pay the fees for the services rendered. On December 12, 1983, plaintiff filed a complaint in this court alleging breach of contract (counts I and II) and fraud (count III). Defendant now seeks to have count III dismissed.


 For purposes of the present motion, the court is required to accept as true all facts alleged in the complaint as well as all reasonable inferences which can be drawn therefrom. Mortensen v. First Federal Savings and Loan Ass'n., 549 F.2d 884, 891 (3d Cir. 1977). *fn1" With this in mind, the court turns to defendant's arguments.

 Defendant initially argues that count III should be dismissed since the count does not set forth a claim for fraud. The court disagrees. The elements of a claim for fraud under Pennsylvania law are a misrepresentation, an intent by the maker that the recipient be induced to act, justifiable reliance by the recipient upon the misrepresentation, and damage to the recipient as the proximate result. Marian Bank v. International Harvester Credit Corp., 550 F. Supp. 456 (E.D. Pa. 1982); Girard Bank v. John Hancock Mutual Life Ins. Co., 524 F. Supp. 884 (E.D. Pa. 1981), aff'd, 688 F.2d 820 (3d Cir. 1982); Savitz v. Weinstein, 395 Pa. 173, 149 A.2d 110 (1959). With regard to the misrepresentation element, it need not be in the form of a positive assertion but rather, is any artifice by which a person is deceived to his disadvantage. Delahanty v. First Pennsylvania Bank, N.A., 319 Pa.Super. 90, 464 A.2d 1243 (1983).

 In count III plaintiff asserts that defendant, knowing that it had no intention of honoring its guarantee, issued to plaintiff an unconditional guarantee to pay any medical expenses incurred by plaintiff or his wife. Plaintiff also alleges that because of his reliance on this fraudulent representation he has suffered economic losses, mental anguish, harassment from physicians and health care institutions and damage to his credit rating and standing in the community. Accepting these facts as true, plaintiff has stated a claim for fraud under Pennsylvania law.

 Defendant next argues that count III should be dismissed because it does not satisfy the requirement of Rule 9(b) of the Federal Rules of Civil Procedure. Rule 9(b) requires that, "In all averments of fraud . . . the circumstances constituting fraud . . . shall be stated with particularity." This rule requires that a plaintiff plead sufficient facts so as to advise defendant of the claim, see Cottman Transmission Systems, Inc. v. Dubinsky, 95 F.R.D. 351 (E.D. Pa. 1982), and to give the defendant a fair opportunity to frame an answer and prepare a defense. See Summers v. Lukash, 562 F. Supp. 737 (E.D. Pa. 1983). In this case, plaintiff has alleged sufficient facts to meet the requirement of Rule 9(b).

 Defendant's final argument does not specifically request a dismissal of count III but rather, addresses the damages plaintiff seeks to recover under count III. In count III, plaintiff requests the court to award both compensatory and punitive damages. *fn2" Defendant now seeks to prevent recovery of punitive damages.

 The basis for defendant's argument that plaintiff is not entitled to punitive damages is the Pennsylvania Supreme Court decision in D'Ambrosio v. Pennsylvania National Mutual Casualty Insurance Co., 494 Pa. 501, 431 A.2d 966 (1981). However, that decision cannot be read as precluding recovery of punitive damages in cases where, as here, fraud is a separate cause of action. In D'Ambrosio, the court refused to imply a cause of action seeking punitive damages and damages for emotional distress based on the alleged "bad faith" conduct of an insurer in denying a claim. Id. at 509, 431 A.2d at 970. See Smith v. Harleysville Insurance Co., 494 Pa. 515, 431 A.2d 974 (1981). The court reasoned that since Pennsylvania's Unfair Insurance Practices Act, Act of July 22, 1974, P.L. 589, § 1 et seq., 40 P.S. § 1171.1 et seq. (Supp. 1982), provided sufficient means by which unfair insurance practices and "bad faith" conduct could be deterred, there was no need to supplement the Act with a new judicially created cause of action arising out of those same practices and which would allow punitive damages and damages for emotional distress. *fn3" D'Ambrosio at 508, 509, 431 A.2d at 970. This court determines that neither the Pennsylvania legislature nor the court in D'Ambrosio meant to preclude a common law fraud action, such as this one, and the possible punitive damages associated ...

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