The opinion of the court was delivered by: WILLIAM W. CALDWELL
Before us is defendant's Fed. R. Civ. P. 12(b)(6) motion to dismiss certain parts of the complaint, which seeks redress for alleged failure to pay benefits under a first-party automobile insurance contract. We exercise jurisdiction pursuant to 28 U.S.C. §§ 1332 and 1441.
Sometime before February, 1989, defendant State Farm Mutual Automobile Insurance Company ("State Farm") issued a motor vehicle insurance policy to plaintiffs Janet and Luther Danley. Janet Danley suffered injuries as a result of an automobile accident on February 10, 1989. Plaintiffs made a claim for damages to State Farm and have brought this lawsuit alleging that State Farm wrongfully and in bad faith denied the claim. Plaintiff characterizes the claim as one for lost wages, although the language of the complaint is ambiguous.
On October 20, 1992, defendant filed the pending motion to dismiss.
We will consider the motion according to the well-established standard. In considering a motion under Rule 12(b)(6), we must accept as true all the well-pleaded allegations of the complaint and construe them favorably to the plaintiff. We cannot grant the motion unless the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Labov v. Lalley, 809 F.2d 220 (3d Cir. 1987).
We believe the issue presented in the pending motion can be narrowly stated: Can a plaintiff seeking first-party insurance wage-loss or medical benefits as the result of an automobile accident claim punitive damages against an insurer under 42 Pa. Cons. Stat. § 8371?
Section 8371 was enacted by the Pennsylvania legislature in 1990 and allows insured parties to seek punitive damages for bad-faith claim denials by insurance companies. It makes no mention of automobile insurance in particular. Prior to the enactment of § 8371, the Pennsylvania courts had not recognized a claim for punitive damages in insurance cases. D'Ambrosio v. Pennsylvania National Casualty Insurance Co., 494 Pa. 501, 431 A.2d 966 (1981). Section 8371 was the legislative response to D'Ambrosio.
It has been consistently held that a plaintiff may not seek punitive damages under § 8371 for denial of medical benefits under an auto insurance contract. See Yeager v. State Farm, slip op. No. 92-830 (M.D. Pa. September 24, 1992) (Caldwell, J.) Riddell v. State Farm, 1992 WL 209971 (M.D. Pa. July 9, 1992) (McClure, J.). Courts exploring the issue have determined that § 8371 conflicts with 75 Pa. Cons. Stat. § 1797(b), a part of the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa. Cons. Stat. § 1701, et seq ("MVFRL"). § 1797(b) sets out the process an insured party must undertake to challenge a denial of a Claim for medical benefits and allows a court to assess treble damages against an insurer deemed to have denied a claim "wantonly." § 1797(b)(4) . Other provisions of § 1797 make it impossible to reconcile it with § 8371 and courts have properly held that § 1797 provides the exclusive remedy in the auto insurance medical claim area.
As such, we will dismiss any portion of the complaint that might be construed to request punitive damages under § 8371 for medical benefit denial.
Most courts, including this one, that have addressed the issue of punitive damages in the first-party auto insurance context have not distinguished between claims for medical benefits and those for wage loss. This is because the cases have arisen largely in the medical benefit context.
Two courts have concluded that § 8371 does not apply to wage-loss claims. Because we believe this issue warrants close scrutiny, we will ...