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Muth v. State Farm Fire and Casualty Co.


September 22, 2010


The opinion of the court was delivered by: William W. Caldwell United States District Judge


I. Introduction

Plaintiff, Ronald Muth, filed this suit in the Court of Common Pleas of Dauphin County, Pennsylvania. Invoking our diversity jurisdiction, Defendant, State Farm Fire and Casualty Company, removed it here. Plaintiff's complaint alleges two causes of action: (1) a breach-of-contract claim in Count I for State Farm's alleged failure to pay a loss under a homeowner's policy; and (2) a claim in Count II for bad-faith denial of coverage.

State Farm has filed a motion to dismiss Count II pursuant to Fed. R. Civ. P. 12(b)(6), contending that it fails to state a claim because it consists solely of "boilerplate allegations of bad faith and unsubstantiated conclusions of law." (Doc. 5, Br. in Supp. at p. 6). We agree and will dismiss Count II.

II. Standard of Review

Under Fed. R. Civ. P. 12(b)(6), we must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008)). While a complaint need only contain "a short and plain statement of the claim," Fed. R. Civ. P. 8(a)(2), and detailed factual allegations are not required, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007), a complaint must plead "enough facts to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955 at 1974, 167 L.Ed.2d 929. Hence "'threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.'" Fowler, supra, 578 F.3d at 210 (quoting Ashcroft v. Iqbal, U.S. , , 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009)).*fn1

III. Background

Plaintiff alleges the following. He purchased a fire and casualty insurance policy from State Farm to insure a residential property he owned. (Doc. 1-1, Compl. ¶ 3). Thereafter, on June 10, 2009, a fire damaged the property. (Id. ¶ 5). A State Farm claims adjuster then sent Plaintiff a letter admitting coverage and stating a partial payment was enclosed with the letter. (Id. ¶ 10 and Ex. B). However, Plaintiff has not been paid. (Id. ¶ 11).

Count I makes the breach-of-contract claim. Count II makes the bad faith claim as follows. State Farm's "refusal to pay the claim constitute[s] bad faith in that the Defendant has no evidence to support any denial of the payment of the claim . . . ." (Id. ¶ 15). Additionally, State Farm "lacked a reasonable basis for denying" the claim, and "either intentionally or recklessly disregarded the reasonable basis for the claim . . . ." (Id. ¶¶ 27 and 28). Further, State Farm failed: "to conduct a reasonable and fair investigation of the claim"; "to pay the claim within a reasonable period of time"; "to attempt to come to a fair and reasonable settlement of the claim when liability is clear"; "to promptly provide a reasonable explanation for denial of the claim"; and "to specifically detail evidence of reason to deny [the] claim." (Id. ¶ 23(a)-(f)).

IV. Discussion

Plaintiff's bad faith claim is authorized by 42 Pa. Cons. St. § 8371.*fn2 To prevail on a bad faith claim, a plaintiff must satisfy a two-prong test. First, the plaintiff must show that the insurance company "'did not have a reasonable basis for denying benefits under the policy.'" Greene v. United Services Auto. Ass'n, 936 A.2d 1178, 1189 (Pa. Super. 2007)(quoted case omitted). Second, the plaintiff must show that the company "'knew or recklessly disregarded its lack of a reasonable basis in denying the claim.'" Id. (quoted case omitted).

It is apparent, as State Farm argues, that the complaint fails to allege sufficient facts to state a valid bad faith claim. All of the allegations are merely conclusory statements.*fn3 Additionally, paragraphs 27 and 28 are simply a threadbare recital of the elements of the cause of action. We will therefore dismiss Count II.

Plaintiff argues that he should "ha[ve] the right to allege and attempt to prove after discovery that bad faith has occurred" when an insurance company has not paid a covered loss for over a year. (Doc. 6, Opp'n Br. at p. 4). We reject this position. In federal court, discovery is not permitted as a way for a plaintiff to see if he has a cause of action. See Ranke v. Sanofi-Synthelabo Inc., 436 F.3d 197, 204 (3d Cir. 2006). Moreover, this is the type of claim where a plaintiff should know some facts that would support it.

We will issue an appropriate order.


AND NOW, this 22nd day of September, 2010, it is ordered that:

1. Defendant, State Farm Fire and Casualty Company's, motion (doc. 3) to dismiss Count II is granted.

2. Count II, the bad faith claim, is hereby dismissed.

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