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Frank Moranski and Beverly Moranski v. Encompass Ins. Co. of America Trading and Doing

February 11, 2011


The opinion of the court was delivered by: Judge Munley


Before the court for disposition are the plaintiffs' objections to the report and recommendation of Magistrate Judge William T. Prince, which recommends that the defendants' motion to dismiss Count III of the plaintiffs' complaint be granted. The matter has been fully briefed and is ripe for disposition.


This case arises out of the manner in which Defendant Encompass Insurance Company of America ("Encompass"), insurer for the home of Plaintiffs Frank and Beverly Moranski ("the Moranskis"), handled a claim under plaintiffs' homeowner's policy of insurance.

The Moranskis held an insurance policy covering their home that was issued by Encompass. (Compl. ¶¶ 4--7 (Doc. 1)). On May 16, 2009, the Moranskis' home and personal property were substantially destroyed by a fire, an occurrence that Encompass does not dispute triggered coverage. (Id.¶ 14). Although Encompass valued the loss at $330,000.00, it only paid out $197,317.03, reflecting a "depreciat[ion] without full explanation."

(Id.¶¶ 17--18). Encompass had delayed making payment on the policy until October 2009, when counsel for the Moranskis submitted a written demand for payment; "[i]mmediately following contact" from the Moranskis' counsel, Encompass "issued a check for the undisputed amount." (Id.¶¶ 18--20). Further, Encompass "attempted" to cancel the policy "simply because a claim was made thereupon." (Id.¶ 39).

This case originated with the filing of the complaint on May 14, 2010. (Doc. 1). On July 16, 2010, Encompass filed a motion to dismiss or in the alternative for a more definite statement of Count III, which alleges a violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 PA. STAT. §§ 201-1 to 201-9.3 (2008). (Doc. 6). The motion was referred to Magistrate Judge Prince who issued a report and recommendation on January 11, 2011. (Doc. 13). The plaintiffs have objected to the report and recommendation, bringing the case to its present posture.


Plaintiffs reside in, and are citizens of Pennsylvania. Defendants are insurance companies incorporated under the law of Illinois and have their principal places of business in Illinois. Thus, Defendants are citizens of Illinois. Because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, the court has jurisdiction over the case. See 28 U.S.C. § 1332 ("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 . . . citizens of different States[.]").


In disposing of objections to a magistrate judge's report and recommendation, we make a de novo determination of those portions of the report to which objections are made. 28 U.S.C. § 636 (b)(1)(C); see also Henderson v. Carlson, 812 F.2d 874, 877 (3d Cir. 1987). This court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. We may also receive further evidence or recommit the matter to the magistrate judge with instructions. Id.

Before the court is the magistrate judge's recommendation that we grant defendant's motion to dismiss for failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). When a 12(b)(6) motion is filed, the sufficiency of the allegations in the complaint is tested. Granting the motion is appropriate if, accepting as true all the facts alleged in the complaint, the plaintiff has not pleaded "enough facts to state a claim to relief that is plausible on its face," or put another way, "nudged [his or her] claims across the line from conceivable to plausible." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The plaintiff must describe "enough facts to raise a reasonable expectation that discovery will reveal evidence of" each necessary element of the claims alleged in the complaints. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556). Moreover, the plaintiff must allege facts that "justify moving the case beyond the pleadings to the next stage of litigation." Id. at 234-35.

In relation to Federal Rule of Civil Procedure 8(a)(2), the complaint need only provide "'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests,'" Twombly, 550 U.S. at 555 (citation omitted). "[T]he factual detail in a complaint [cannot be] so undeveloped that it does not provide a defendant the type of notice of claim which is contemplated by Rule 8." Phillips, 515 F.3d at 232 (citation omitted). "Rule 8(a)(2) requires a 'showing' rather than a blanket assertion of an entitlement to relief." Id.

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). However, "we are not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, -- U.S. --, 129 S. Ct. 1937, 1949-50 (2009) (internal quotations omitted). The Supreme Court has counseled that a court examining a motion to dismiss should, "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." ...

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