The opinion of the court was delivered by: Yvette Kane, Chief Judge United States District Court Middle District of Pennsylvania
Before the Court is Defendant's motion to dismiss Count III of Plaintiff's complaint. (Doc. No. 5.) Defendant alleges that Plaintiff has failed to state a claim under the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("CPL"). For the reasons that follow, the Court finds that the motion will be granted.
On or about June 8, 1990, James Bariski, husband of Plaintiff Janice Bariski, purchased a life insurance policy from Defendant Maccabees Life Insurance Company, later succeeded by Reassure America Life Insurance Company. (Doc. No. 1-2 ¶ 3.) Janice Bariski was the named beneficiary of the policy both initially and at the time of the alleged default, though for a period of time in between those two events, the policy had been assigned to a third-party as collateral for a debt. (Id. ¶ 5.) In 2002, while the policy was still operative, James Bariski was diagnosed with cancer. (Id. ¶ 6.)
In November 2005, Defendant informed James Bariski that his premium payment was overdue. (Id. ¶ 7.) Defendant explained that there was a grace period on the policy such that if all past-due payments were received prior to January 8, 2006, the policy would not be cancelled. (Id. ¶ 10.) James Bariski mailed the requisite amount of money to Defendant prior to expiration of the grace period. (Id. ¶¶ 8, 11.) Yet, on January 9, 2006, Defendant informed James Bariski that it had not received the payment prior to the grace period and that his policy had been terminated. (Id. ¶ 12.) James Bariski notified Defendant that he had mailed the payment prior to the expiration of the grace period, but Defendants refused to reinstate the policy. (Id. ¶ 14.)
On or about January 16, 2006, Defendant admitted that it had received Bariski's payment on January 10, 2006, but maintained that the payment was too late: the grace period had ended, and the police had lapsed. (Id.) Defendant insisted that the policy could not be reinstated without a new application, new evidence of insurability, and approval from the company. (Id. ¶¶ 12-13.)
James Bariski passed away on December 20, 2007, and Defendant did not make any payout to Plaintiff. (Id. ¶¶ 16, 6.) It was only after James Bariski's death that Plaintiff became aware of Defendant's position that the policy had lapsed and that Defendant had no intention of honoring the policy. (Id. ¶ 17.)
On March 18, 2010, Plaintiff, on behalf of herself and the estate of her late husband, filed a complaint in the Court of Common Pleas of Cumberland County against Defendant, alleging breach of contract, bad faith, and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("CPL"). (Doc. No. 1-2.) On April 15, 2010, Defendant removed the case to this Court on the basis of diversity jurisdiction. (Doc. No. 1.) On April 30, 2010, Defendant moved to dismiss Count III of Plaintiff's complaint, which motion is now ripe before the Court for disposition. (Doc. No. 5.)
A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint, Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993), and is properly granted when, taking all factual allegations and inferences as true, the moving party is entitled to judgment as a matter of law. Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990). The burden is on the moving party to show that no claim has been stated. Johnsrud v. Carter, 620 F.2d 29, 33 (3d Cir. 1980). Thus, the moving party must show that Plaintiff has failed to "set forth sufficient information to outline the elements of his claim or to permit inferences to be drawn that those elements exist." Kost, 1 F.3d at 183 (citations omitted). A court, however, "need not credit a complaint's 'bald assertions' or 'legal conclusions' when deciding a motion to dismiss." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906, 908 (3d Cir. 1997). Indeed, the Supreme Court has recently held that while the 12(b)(6) standard does not require "detailed factual allegations," there must be a "'showing,' rather than a blanket assertion of entitlement to relief. . . . '[F]actual allegations must be enough to raise a right to relief above the speculative level.'" Phillips v. County of Allegheny, 515 F.3d 224, 231-32 (3d Cir. 2008) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).Put otherwise, a civil complaint must "set out 'sufficient factual matter' to show that the claim is facially plausible." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Ashcroft v. Iqbal, 129 S.Ct. 1937, 1955 (2009)).
Defendant argues that Plaintiff's CPL claim should be dismissed for several reasons. Defendant maintains that the CPL pertains only to misrepresentations made to induce the sale of an insurance policy, and therefore does not concern the alleged misrepresentations at bar.
Defendant alternatively suggests that Plaintiff's claim fails because she has not alleged all the elements of common law fraud and justifiable reliance. Last, Defendant asserts that the economic loss doctrine bars the claim. Plaintiff, in turn, contends that the CPL applies to all deceptive actions arising from the sale of an insurance contract, that she has alleged all necessary elements of a CPL claim, and that the economic loss doctrine does not bar her claim. The Court finds that Plaintiff has failed to state a claim in Count III of her complaint because she has not alleged justifiable reliance on Defendant's alleged misrepresentations. ...