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FARLAND v. UNITED STATES FID. & GUAR. CO.

April 7, 1993

DAVID MAC FARLAND and DENISE MAC FARLAND, his wife, Plaintiffs,
v.
UNITED STATES FIDELITY & GUARANTEE COMPANY, Defendant.



The opinion of the court was delivered by: BY THE COURT; J. CURTIS JOYNER

 Joyner, J.

 Plaintiffs, David and Denise MacFarland, filed this breach of insurance contract action in the Court of Common Pleas of Montgomery County on March 11, 1992 against defendant, United States Fidelity & Guarantee Company ("USF&G"), seeking insurance proceeds for the loss of their boat, a 1982 thirty-two foot fiberglass hateras sport fisherman, and a claim for bad faith. The matter was subsequently removed to this court based on diversity of citizenship. 28 U.S.C. § 1332; 28 U.S.C. 1441.

 Presently before the court are the motions of USF&G for separate trials, for partial summary judgment and to withdraw the jury trial demand. For the reasons which follow, we will grant the partial summary judgment motion in part, deny the motion to withdraw the jury trial demand and grant the motion for separate trials in part.

 USF&G urges the court to dismiss Counts III and IV of plaintiffs' complaint on the grounds that this court does not have jurisdiction to entertain the claims because the Uniform Insurance Practices Act ("UIPA"), 40 Pa.C.S.A. § 1171.1 et seq. and the Pennsylvania Insurance Department and Commissioner Regulations cannot be enforced in a private action. Accordingly, defendant argues, because plaintiffs are using the UIPA provisions and the regulations as a basis for their direct claims of bad faith conduct under 42 Pa.C.S.A. § 8371 and violations of the Uniform Trade Practices and Consumer Protection Laws ("UTPCPL"), 73 Pa.C.S.A. § 201-1 et seq., we cannot entertain these claims.

 In considering a motion for summary judgment, the court must consider whether the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, show there is no genuine issue as to any material fact, and whether the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). This court is required to determine whether the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In making this determination, all reasonable inferences must be drawn in favor of the nonmoving party. Anderson, 477 U.S. at 256, 106 S. Ct. at 2512. While the movant bears the initial burden of demonstrating an absence of genuine issues of material fact, the nonmovant must then establish the existence of each element of its case. J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1531 (3d Cir. 1990) citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986).

 USF&G correctly state that the UIPA and the Department of Insurance regulations can only be enforced by the state insurance commissioner and not by way of a private action. Lombardo v. State Farm Auto. Ins. Co., 1992 WL 41643, *3 (E.D.Pa. 1992) citing Liberty Mut. Ins. Co. v. Paper Mfg. Co., 753 F. Supp. 156, 159 (E.D.Pa. 1990); Nazer v. Safeguard Mut. Assur. Co., 293 Pa. Super. 385, 439 A.2d 165, 166 (Pa. Super. 1981). In Lombardo, Judge Huyett held that a plaintiff "cannot assert a UIPA violation as grounds for recovery under another theory like the [UTPCPL], 42 Pa.C.S.A. § 8371, or common law theories" because in order to determine liability under the alternate theory, the court would be required to determine if the UIPA had been violated - a matter beyond a court's jurisdiction. 1992 WL 41643 at *3.

 In this case, Count III of plaintiffs' complaint alleges that USF&G's conduct, as specifically enumerated in paragraphs 29(A) through 29(I), violated the UIPA ([para.] 29) and the regulations promulgated by the Insurance Department ([para.] 30) and constitutes bad faith ([para.] 31). While we agree that plaintiffs do not have causes of actions under the UIPA and the regulations, the alleged conduct constituting violations of the UIPA and the regulations can be considered in determining whether USF&G acted in bad faith. Rottmund v. Continental Assurance Co., F. Supp. , 1992 U.S. Dist. LEXIS 19890, 1992 WL 442098 (E.D.Pa. 1992) (courts may look to other statutes upon the same or similar subjects to define bad faith under § 8371); Coyne v. Allstate Ins. Co., 771 F. Supp. 673, 678 (E.D.Pa. 1991) (provisions of UIPA can be utilized to describe conduct constituting bad faith).

 In Lombardo, even though the plaintiff argued that she cited the UIPA only as basis for measuring the defendant's bad faith conduct, her claim was dismissed but she was granted leave to replead her bad faith claim. 1992 WL 41643. This case appears to mirror Lombardo. However, a significant difference between these two cases is that the Lombardo case was before the court on a motion to dismiss and this case comes to us upon a motion for summary judgment. If USF&G felt that the allegations in the complaint were so vague that it could not frame a response, it could have moved to dismiss the claim or to require a more definite statement prior to filing its answer. USF&G has not argued, except albeit in a footnote, *fn1" that the results of the discovery process require judgment as a matter of law against the plaintiffs on their bad faith claim. Rather, USF&G urges this court to find that plaintiffs have failed to state a claim upon which relief may be granted. Furthermore, as exhibits to its motion for summary judgment, USF&G has attached no more than the complaint and answer. As USF&G has waited until this late moment to raise this argument, we find that the complaint has put the defendant sufficiently on notice of the claims against it. Accordingly, the parties must proceed to trial on the bad faith issue.

 In Count IV of the complaint, plaintiffs allege that the same conduct violated the UTPCPL. While a UTPCPL cause of action may be maintained even if the underlying conduct falls within the ambit of another statute, such as the UIPA, Mabel v. The Equitable Life Assur. Soc., 1992 WL 151781 (E.D. Pa. 1992) and Pekular v. Eich, 355 Pa. Super. 276, 513 A.2d 427, 434 (Pa.Super 1986), the UTPCPL provides relief for misfeasance rather than nonfeasance. Gordon v. Pennsylvania Blue Shield, 378 Pa. Super. 256, 548 A.2d 600, 604 (Pa. Super. 1988). Failure to pay under an insurance contract constitutes nonfeasance. Id.; see McAlister v. Sentry Insurance Company, 1991 WL 102973 (E.D.Pa. 1991). Accordingly, plaintiffs Count IV must be dismissed.

 B. Request to Withdraw Jury Trial Demand

 USF&G has requested that the jury trial demand be withdrawn. USF&G argues that because this action involves a marine insurance policy, this court's admiralty jurisdiction is invoked and under 28 U.S.C. § 1333 a party can elect to proceed in admiralty rather than at law. Thus the ...


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