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Amitia v. Nationwide Mutual Insurance Co.

January 15, 2009


The opinion of the court was delivered by: Judge Munley


Before the court for disposition is the defendant's motion to dismiss plaintiffs' first amended complaint. The matter has been fully briefed and is ripe for disposition.


Plaintiffs Michael and Catherine Amitia, husband and wife, reside in Pittston, Pennsylvania. (Doc. 3, Amended Complaint, ¶ ¶ 1-2). Defendant Nationwide Mutual Insurance Company (hereinafter "Nationwide" or "defendant") is in the automobile insurance business (Id. at ¶ 4). Nationwide issued a policy of automobile insurance to the plaintiffs.*fn1 (Id. at 13). The policy provided stacked underinsured motorist (hereinafter "UIM") coverage of $300,000 per person/$300,00 per occurrence. It also provided income loss benefits of $25,000 with a monthly maximum of $1,500. (Id. at ¶ 16).

On July 3, 2002, while the policy was in effect, Plaintiff Michael Amitia was involved in a motor vehicle collision in which he suffered serious, painful and disabling injuries. (Id. at ¶ ¶ 12-13, 17). These injuries caused the plaintiff to be treated by many healthcare providers, and the need for such treatment will continue into the indefinite future. (Id. at ¶ ¶ 19, 23). He has also been prescribed various medications some of which are narcotics and adversely affect his ability to think and concentrate. (Id. at ¶ 22). Plaintiff has not been able to return to employment due to his injuries and was removed from his position as a Financial Services Representative at Metropolitan Life Insurance Company. (Id. at ¶ 21).

Plaintiffs assert that defendant mishandled Michael Amitia's UIM claim. They assert that defendant's offers to settle were not based on good faith and fair dealing as required by Pennsylvania law and that Nationwide delayed investigating the claim in violation of the Pennsylvania Unfair Insurance Practices Act. (Id. at ¶ ¶ 59-60). Plaintiffs' UIM claim proceeded through arbitration, and plaintiffs assert that defendant's bad faith behavior continued through the arbitration procedure. (Id. at ¶ ¶ 62-80). Accordingly, plaintiffs filed a complaint in the Luzerne County Court of Common Pleas against the defendant. Defendant removed the case to this court on February 22, 2008 asserting this court's diversity jurisdiction. (Doc. 1). Defendant then filed a motion to dismiss the complaint. (Doc. 2). In response, the plaintiff filed an amended complaint on March 3, 2008 asserting the following four counts: Count I, Bad Faith, 42 PENN. CONS. STAT. ANN. § 8371; Count II, breach of contract; Count III, violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 75 PENN. STAT. § 201-1 et seq.; and Count IV, negligence. (Doc. 3). The defendant then filed a motion to dismiss the amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, which brings the case to its present posture.


This Court has jurisdiction pursuant to the diversity jurisdiction statute, 28 U.S.C. § 1332. The plaintiffs are citizens of Pennsylvania, and the defendant is an Ohio corporation with a principal place of business in Columbus, Ohio. (Doc. 3, Amended Complaint ¶ ¶ 1-2; Doc. 1, Notice of Removal ¶ 4). Because we are sitting in diversity, the substantive law of Pennsylvania shall apply to the instant case. Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)).

Standard of Review

When a 12(b)(6) motion is filed, the sufficiency of a complaint's allegations are tested. The issue is whether the facts alleged in the complaint, if true, support a claim upon which relief can be granted. In deciding a 12(b)(6) motion, the court must accept as true all factual allegations in the complaint and give the pleader the benefit of all reasonable inferences that can fairly be drawn therefrom, and view them in the light most favorable to the plaintiff. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997).


Defendant's motion raises six issues, and we will address each in turn.*fn2

I. The Negligence Cause of Action

The first issue raised by the defendant is whether the negligence count should be dismissed under the "gist of the action" doctrine. In response to defendant's motion, plaintiffs have withdrawn the negligence count from the complaint. (Doc. 10, Plaintiffs' Opposition Brief at 1 "It should be noted that Plaintiffs have withdrawn Count IV, Negligence, from the ...

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