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DOYLESTOWN ELEC. SUPPLY CO. v. MARYLAND CAS. INS.

April 16, 1996

DOYLESTOWN ELECTRICAL SUPPLY CO.
v.
MARYLAND CASUALTY INSURANCE CO.



The opinion of the court was delivered by: PADOVA

 Padova, J.

 April 16, 1996

 I. BACKGROUND

 Plaintiff's Complaint asserts two violations of Pennsylvania law arising out of Defendant's alleged failure to honor the terms of an insurance agreement. Count I alleges that Defendant breached the terms of the insurance contract by failing to compensate Plaintiff fully for property losses covered under the policy. Count II alleges that Defendant's actions constitute bad faith in violation of 42 Pa. Cons. Stat. Ann. § 8371 (West Supp. 1995). Currently before the Court is Defendant's Motion to Dismiss Count II of the Complaint pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons that follow, Defendant's Motion will be denied.

 II. STANDARD OF REVIEW

 A claim may be dismissed under Fed. R. Civ. P. 12(b)(6) only if the plaintiff can prove no set of facts in support of the claim that would entitle it to relief. ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994). The reviewing court must consider only those facts alleged in the Complaint and accept all of the allegations as true. Id.

 III. DISCUSSION

 Count II of the Complaint seeks punitive damages and other costs under § 8371, alleging that Defendant denied Plaintiff's claim under the policy in bad faith. Section 8371 reads as follows:

 
In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions:
 
(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%.
 
(2) Award punitive damages against the insurer.
 
(3) Assess court costs and attorney fees against the insurer.

 42 Pa. Cons. Stat. Ann. § 8371. Defendant raises two arguments in support of its motion to dismiss. First, Defendant argues that the § 8371 action is not ripe for disposition; second, Defendant challenges the constitutionality of the statue on the ground ...


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