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STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. CHRZAN

November 8, 2005.

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Plaintiff
v.
TRACEY CHRZAN, Individually and as Executrix of the Estate of Stanley Chrzan, deceased Defendant.



The opinion of the court was delivered by: JOHN JONES III, District Judge

ORDER

THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:

Pending before the Court is a Motion to Dismiss Complaint for Declaratory Judgment ("the Motion") (doc. 6) filed by Defendant Tracey Chrzan, Individually and as Executrix of the Estate of Stanley Chrzan ("Defendant"). For the reasons that follow, Defendant's Motion is granted.

  PROCEDURAL HISTORY:

  The Plaintiff, State Farm Mutual Automobile Insurance Company ("Plaintiff" or "State Farm") initiated this action by filing a complaint against Defendant in the United States District Court for the Middle District of Pennsylvania on July 21, 2005. Jurisdiction is proper in this Court pursuant to 28 U.S.C. § 1332 as the parties are of diverse citizenship and the amount in controversy is over $75,000.

  In the Complaint, Plaintiff seeks a declaration that it is not liable for any underinsured motorist coverage under any State Farm Policy for the accident of November 19, 2002.

  On August 30, 2005, Defendant filed the instant Motion pursuant to Fed.R.Civ.Pro. 12(b)(6) and 12(b)(1). The Motion has been fully briefed by the parties and is therefore ripe for disposition.

  STANDARD OF REVIEW:

  In considering a motion to dismiss pursuant to Fed.R.Civ.Pro. 12(b)(6), a court must accept the veracity of a plaintiff's allegations. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); see also White v. Napoleon, 897 F.2d 103, 106 (3d Cir. 1990). In Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996), our Court of Appeals for the Third Circuit added that in considering a motion to dismiss based on a failure to state a claim argument, a court should "not inquire whether the plaintiffs will ultimately prevail, only whether they are entitled to offer evidence to support their claims." Furthermore, "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also District Council 47 v. Bradley, 795 F.2d3 310 (3d Cir. 1986).

  In contrast, "a Rule 12(b)(1) motion may be treated as either a facial or factual challenge to the court's subject matter jurisdiction." Gould Elecs., Inc. v. United States, 220 F. 3d 169, 178 (3d Cir. 2000) (citing Mortenson. v. First Fed. Sav. and Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)). "In reviewing a facial attack, the court must only consider the allegations of the complaint and the documents referenced therein and attached thereto, in the light most favorable to the plaintiff." Id. (citing PBGC v. White, 998 F. 2d 1192, 1196 (3d Cir. 1993)). In reviewing a factual attack, the court may consider evidence outside the pleadings. Id. (citing Gotha v. United States, 115 F. 3d 176, 178-179 (3d Cir. 1997)). The parties' motion papers and briefs indicate that this motion is a facial attack on this Court's jurisdiction, and therefore we will consider only the pleadings, and do so in the light most favorable to the Plaintiff.

  FACTUAL BACKGROUND:

  This action arises out of a motor vehicle accident which took place on November 19, 2002 in Clifford Township, Susquehanna County, Pennsylvania. (Rec. Doc. 1 at 2). Stanley Chrzan was operating a vehicle owned by him when he was struck by a vehicle owned by The Cook Brothers Companies, Inc., d/b/a Triple Cities Mack Sales and Service, and operated by Jason T. Holbert. ("Holbert") (Rec. Doc. 1 at 2). Stanley Chrzan died as a result of injuries sustained in the accident. Holbert was at fault for the accident. (Rec. Doc. 1 at 2).

  At the time of the accident, the vehicle owned by Cook Brothers and operated by Holbert was insured under two insurance policies that provided liability coverage for the accident. One policy provided $500,000.00 (five hundred thousand dollars) in primary liability coverage and the other provided $5,000,000.00 (five million dollars) in excess liability coverage. (Rec. Doc. 1 at 2). Also, on the date of the accident, decedent Stanley Chrzan was an insured under two policies of automobile insurance issued by Plaintiff, providing a total of $150,000 in underinsured motorist coverage ("UIM coverage").

  A lawsuit filed by Defendant proceeded to a binding assessment of damages before the Honorable Trish Corbett of the Lackawanna County Court of Common Pleas. By Order dated September 1, 2004, Judge Corbett found in favor of the Defendant in the amount of $1.8 million dollars. The lawsuit was ultimately settled in exchange for payment under the two applicable liability policies totaling $1.275 million dollars, comprising the entire balance of the primary liability limits of $500,000 (five hundred thousand dollars), and the balance from the excess liability coverage. Thus, it is not disputed that the primary liability limits were exhausted, but the excess liability limits were ...


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