United States District Court, W.D. Pennsylvania
September 23, 2005.
ROY W. EARLY, Plaintiff,
THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK, Defendant.
The opinion of the court was delivered by: ARTHUR SCHWAB, District Judge
This is a breach of contract action brought pursuant to the
Employee Retirement and Income Security Act,
29 U.S.C. §§ 1001, et seq. ("ERISA"). Plaintiff, who is an airline pilot
employed by the United Parcel Service, alleges that he is the
sole beneficiary of a life insurance policy issued by his pilot's
union for his now deceased ex-wife, who was his lawful spouse at
the time of application but divorced at the time of her death,
and that defendant denied his claim for death benefits in the
amount of $100,000.00 in bad faith and in violation of the
"Pennsylvania Fair Practice Act for the Insurance Industry."
Currently pending before this Court is defendant's motion to
dismiss under Fed.R.Civ.P. 12(b)(6).
When the Court considers a Rule 12(b)(6) motion to dismiss, the
issue is not whether plaintiff will prevail in the end, or
whether recovery appears to be unlikely or even remote. The issue
is limited to whether, when viewed in the light most favorable to
plaintiff, and with all well-pleaded factual allegations taken as
true, the complaint states any valid claim for relief. In this
regard, the Court will not dismiss a claim merely because
plaintiff's factual allegations do not support the particular
legal theory he or she advances. Rather, the Court is under a
duty to independently examine the complaint to determine if the
factual allegations set forth could provide relief under any viable legal theory. See 5A Charles
Alan Wright & Arthur R. Miller, Federal Practice & Procedure §
1357, at 337 & n. 40 (2d ed. 1990). See also Conley v. Gibson,
355 U.S. 41, 45-46 (1957).
Ordinarily, where, as here, the parties have referred to
matters outside the pleadings, Rule 12(b) requires that the
motion to dismiss be treated as one for summary judgment.
However, once a Court converts a Rule 12(b)(6) motion into a
motion for summary judgment under Rule 56, a party must be put on
notice so that it can exercise its right to oppose summary
judgment. Crown Cent. Petroleum Corp. v. Waldman, 634 F.2d 127,
129 (3d Cir. 1980). Because defendant did not style his motion as
a motion for summary judgment, there is an issue regarding
whether the parties had notice of and an opportunity to submit
materials admissible in a summary judgment context. Furthermore,
where, as here, the complaint specifically references or quotes
documents that are subsequently attached in defendant's motion to
dismiss, and there is no dispute as to their authenticity, a
court may consider them without converting the motion to one for
summary judgment. Pension Benefit Guarantee Corp v. White
Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Accordingly,
this Court will decline to convert defendant's motion to dismiss
into a motion for summary judgment. See Otis Elevator Co. v.
George Washington Hotel Corp., 27 F.3d 903, 910 (3d Cir. 1994).
In order to establish a cause of action for breach of contract,
a plaintiff must prove: (1) the formation of a contract, (2) the
terms of that contract, (3) performance by plaintiff, (4) breach
by defendant, and (5) damages. Momah v. Albert Einstein Medical
Center, 978 F.Supp. 621, 636 (E.D. Pa. 1997).
The group life insurance policy at issue, which is attached as
an exhibit to plaintiff's complaint states:
DATE INSURANCE ENDS
A person's insurance will end at the earliest of:
1. the date the group policy ends;
2. the date insurance ends for the person's class;
3. for a spouse, the date her marriage ends by
divorce or annulment;
4. the end of the period for which the last premium
has been paid by the person; or
5. the date the employee's employer ceases to be a
Complaint, Exhibit B. (Emphasis added).
The definition of spouse in the life insurance policy
specifically defines that "Spouse means the lawful spouse of an
employee." Furthermore, the policy sets forth eligibility as
The following persons who submit evidence of
insurability satisfactory to United States Life
1. All those who are full time employees of a
Participating Employer. Temporary, part-time and
seasonal employees are not eligible.
2. All those under age 70 who are lawful spouses of
persons described in 1 above.
For lawful spouses, certain terms in this policy are
affected as follows:
references to "active work" and "full-time" will
not apply, and
"end of employment" will mean end of one's status
as a lawful spouse.
Id. (Emphasis added). Where a policy provision is ambiguous, the provision is to be
construed in favor of the insured and against the insurer.
"Where, however, the language of the contract is clear and
unambiguous, a court is required to give effect to that
language." Minn. Fire & Cas. Co. v. Greenfield, 855 A.2d 854
861 (Pa. 2004) (quoting Gene & Harvey Builders, Inc. v.
Pennsylvania Manufacturers, 517 A.2d 910 (Pa. 1986)).
Defendant contends, and plaintiff does not dispute, that
plaintiff and decedent were divorced before her death.
Accordingly, because plaintiff and decedent were no longer
"lawful spouses," the policy was no longer in effect. Although
plaintiff argues that because he continued to make payments, the
policy was still in effect even after his divorce, the policy at
issue clearly and unambiguously states that the policy will cease
on the date the marriage ends by divorce or annulment. A
policyholder can not "modify" the clear language of the policy by
"payment" of premiums. Therefore, because, in the present case,
the language of the contract is clear and unambiguous, this Court
must give effect to that language. Plaintiff's claim for breach
of contract fails as a matter of law.
Furthermore, with regard to plaintiff's claims for bad faith,
plaintiff has failed to allege any factual allegations to support
that theory, nor does he specify if his claim is based upon a
perceived violation of 42 Pa. Cons. Stat. Ann. § 8371.
While Section 8371 does not define the term "bad faith," it has
acquired the following accepted meaning in insurance contexts:
"Bad Faith" on the part of insurer is any frivolous
or unfounded refusal to pay proceeds of a policy; it
is not necessary that such refusal be fraudulent. For
purposes of an action against an insurer for failure
to pay a claim, such conduct imports a dishonest
purpose and means a breach of a known duty (i.e. good
faith and fair dealing), through some motive of
self-interest or ill will; mere negligence or bad judgment is not bad
Polselli v. Nationwide Mutual Fire Ins. Co., 23 F.3d 747, 751
(3d Cir. 1994) (citing to Black's Law Dictionary 139 (6th ed.
Because this Court has already found that plaintiff's breach of
contract claim fails as a matter of law, it necessarily follows
that defendant's refusal to plaintiff's claim could not be viewed
as "frivolous" or "unfounded," under Section 8371.
Finally, with regard to the complaint's scant reference to an
alleged violation of the Unfair Insurance Practices Act (UIPA),
Pennsylvania courts have consistently held that they do not have
jurisdiction over a claim brought under the UIPA. Romano v.
Nationwide Mutual Fire Ins. Co., 435 Pa. Super. 545 (Pa. Super.
1994). Furthermore, Section 8371 dictates that the UIPA does not
provide a private cause of action and the Act can only be
enforced by the State Insurance Commissioner.
Even when viewed in the light most favorable to plaintiff, and
with all well-pleaded factual allegations taken as true, the
complaint fails to state any valid claim for relief. Accordingly,
defendant's motion to dismiss (doc. no. 4) is hereby GRANTED.
Plaintiff's complaint is therefore DISMISSED WITH PREJUDICE.
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