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Bowers v. Nationwide Insurance Co.

January 18, 2008


The opinion of the court was delivered by: Judge Munley


Before the court is defendant's motion to dismiss the instant complaint, or in the alternative, to strike portions of the complaint. Having been fully briefed, the matter is ripe for disposition.


This case arises out an automobile accident involving the plaintiff that occurred on May 27, 1997. On that date, plaintiff carried an automobile insurance policy from Defendant Nationwide Mutual Insurance Company. (Complaint (hereinafter "Compl.") (Doc. 1-3) at ¶ 3). Plaintiff's vehicle was struck by another car in Scranton, Pennsylvania, and plaintiff sustained severe and permanent injuries to his back. (Id. at ¶ 8). These injuries left the plaintiff disabled, and he proved unable to continue working. (Id. at ¶¶ 9-10). Plaintiff suffered damages in excess of $800,000. (Id. at ¶ 10). The driver who was responsible for the plaintiff's injuries had liability insurance with policy limits of $15,000. (Id. at ¶ 11).

The extreme disparity between plaintiff's injuries and the tortfeasor's insurance coverage led plaintiff to reach a settlement with the other driver and make a claim with Defendant Nationwide for underinsured motorist benefits. (Id. at ¶ 13). Plaintiff complied with all of Nationwide's requests for information and documentation after making this claim. (Id. at ¶ 14). He sought $500,000 in underinsured motorist coverage, apparently the limits available under his policy. (Id. at ¶ 15). Nationwide offered $35,000 as settlement for the claim. (Id. at ¶ 16). Plaintiff then agreed to mediate the claim, but the mediation was unsuccessful. (Id. at ¶ 17). He then offered to settle the claim for $300,000, but Nationwide continued to offer $35,000. (Id. at ¶¶ 19-20).

Unable to settle the claim through mediation, plaintiff instituted litigation seeking to recover $500,000 in underinsured motorist benefits. (Id. at ¶ 23). The matter went before an underinsured motorist arbitration panel on March 2, 2005. (Id.). The panel concluded that plaintiff's damages from the accident entitled him to an award of $551,673. (Id. at ¶ 24). Plaintiff alleges that at this hearing the defendant did not present any expert or other testimony to support its position, but instead relied on previously compiled reports that were obviously inadequate. (See Brief in Opposition to Plaintiff's Motion to Dismiss (Doc. 7) at 4).

After obtaining this arbitration award, plaintiff filed a praecipe for a writ of summons in the Court of Common Pleas of Lackawanna County, Pennsylvania on February 22, 2007. Plaintiff filed his complaint in that court on June 5, 2007. Plaintiff alleges that defendant violated Pennsylvania law and operated in bad faith by failing to conduct a reasonable investigation before engaging in procedures to resolve his claim. The complaint alleges that defendant's medical investigation of plaintiff's condition was insufficient and contrary to the medical record. Further, the plaintiff contends, the defendant relied on an economic expert who was unqualified for the task and made basic accounting errors in determining the value of plaintiff's lost business. Plaintiff's complaint seeks damages for defendant's bad faith, including interest for the unnecessary delays in payment of plaintiff's insurance coverage, the costs required to recover that payment, and punitive damages.

Defendant filed a notice of removal on June 25, 2007, contending that this court had jurisdiction on the basis of the diversity statute, 28 U.S.C. § 1332. (See Doc. 1). On July 2, 2007, defendant filed the instant motion to dismiss. The parties then briefed the issue, bringing the case to its present posture.


Plaintiff is a citizen of Pennsylvania. Defendant is an Ohio corporation with its principle place of business in that state. The amount in controversy is more than $75,000. Accordingly, this court has diversity jurisdiction to hear the case. See 28 U.S.C. § 1332(a)(1) (establishing that "[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between--(1)citizens of different States.").

Legal Standard

When analyzing a 12(b)(6) motion to dismiss, all well-pleaded allegations of the complainant must be viewed as true and in the light most favorable to the non-movant to determine whether "under any reasonable reading of the pleadings, the plaintiff may be entitled to relief." Colburn v. Upper Darby Township, 838 F.2d 663, 665-666 (3d Cir. 1988) (citing Estate of Bailey by Oare v. County of York, 768 F.3d 503, 506 (3d Cir. 1985), (quoting Helstoski v. Goldstein, 552 F.2d 564, 565 (3d Cir. 1977) (per curiam)). The court may also consider "matters of public record, orders, exhibits attached to the complaint and items appearing in the record of the case." Oshiver v. Levin Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 n.2 (3d Cir. 1994)(citations omitted). The court does not have to accept legal conclusions or unwarranted factual inferences. See Curay-Cramer v. Ursuline Acad. of Wilmington, Del., Inc., 450 F.3d 130, 133 (3d Cir. 2006) (citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997)). The complaint is properly dismissed "if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Haines v. Kerner, 404 U.S. 519, 520-521 (1972)(quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).


We will address each ground defendant raises for dismissing ...

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