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William Reyna, Susan Reyna v. the Phoenix Insurance Co

March 15, 2011

WILLIAM REYNA, SUSAN REYNA, PLAINTIFFS
v.
THE PHOENIX INSURANCE CO., DEFENDANT THIRD PARTY PLAINTIFF
v.
SUBURBAN PROPANE, INC., T/D/B/A SUBURBAN PROPANE, THIRD PARTY DEFENDANT



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

MEMORANDUM

I. Introduction

Presently before the court is third-party defendant Suburban Propane, Inc.'s ("Suburban") motion to dismiss the complaint filed against it by defendant/third-party plaintiff Phoenix Insurance Co. ("Phoenix"). This matter concerns the discharge of home heating oil, allegedly caused by the negligence of a Suburban employee, at the home of plaintiffs William and Susan Reyna. Consequently, plaintiffs initiated a civil action in the Court of Common Pleas of York County, Pennsylvania against Suburban. Based on issues arising in that case, plaintiffs brought the instant action against Phoenix, insurer of plaintiff's property. On October 20, 2010, Phoenix filed, and we granted, a motion to implead Suburban as a third-party defendant. Thereafter, Suburban filed the instant motion.

In its motion, Suburban essentially offers three arguments in support of dismissal: (1) improper basis for impleader; (2) unavailability of Phoenix's subrogation claim; and (3) abstention. In the alternative, Suburban files a motion for a more definite statement. After review, we will deny Suburban's motions.

II. Discussion

A. Standard of Review

Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint for "failure to state a claim upon which relief can be granted." Under Rule 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. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, - - - U.S. -- - -, 129 S.Ct. 1937, 1949 (2009)(quoting Twombly, 550 U.S. at 556, 127 S.Ct. at 1965.) "[L]abels and conclusions" are not enough, Twombly, 550 U.S. at 555, 127 S.Ct. at 1964-65, and a court "'is not bound to accept as true a legal conclusion couched as a factual allegation.'" Id., 127 S.Ct. at 1965 (quoted case omitted).

B. Third-Party Complaint

Third-Party defendant Suburban argues that Phoenix improperly pleaded that Suburban was solely liable to plaintiffs, as opposed to being liable to Phoenix for all or part of plaintiffs' claims. Federal Rule of Civil Procedure 14(a) provides that a "defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it." In its complaint, Phoenix alleges that Suburban is "solely liable to the Plaintiffs, or is jointly liable and/or severally liable with Defendant to Plaintiffs, or is liable over to Defendant for contribution and/or indemnity, for and damages claimed by the Plaintiffs should such damages be proven at trial." (doc. 37, ¶ 6.) It is clear from Phoenix's complaint that it raises multiple, alternative grounds for relief, only one being that Suburban is solely liable to plaintiff. Since pleading in the alternative is authorized by Rule 8(d) of the Federal Rules of Civil Procedure, we find Suburban's argument to be unpersuasive.

Likewise, we find its argument that Phoenix did not properly plead a subrogation claim to be equally unpersuasive. As we previously indicated, Phoenix claims that Suburban is liable for "contribution and/or indemnity". Suburban claims that this language indicates that Phoenix is bringing indemnity and contribution actions, which is not permitted under Pennsylvania law. While the words "subrogation" do not appear in Phoenix's complaint, "the court cannot accept [Suburban's] claim that [Phoenix's] third-party complaint must be dismissed because it does not expressly use the term 'subrogation.'" Banks Tower Communications, Ltd. v. Home Insurance Co., 590 F.Supp. 1038, 1041 (E.D. Pa. 1984). While inartfully pled, it is clear from the complaint that Phoenix intended to allege a claim for subrogation. Furthermore, in its brief in opposition, Phoenix specifically states that it is pursuing a subrogation claim.

(doc. 48, pg. 5.) Since subrogation claims are permitted by Rule 14(a), see Oswald v. State Farm Mut. Auto. Ins. Co., No. 09-2578, 2010 WL 2697113 (M.D. Pa. July 6, 2010), we will not dismiss the complaint on this ground.

Finally, Suburban contends that Phoenix is barred from pursuing its subrogation claim because the statute of limitations has run. A statute of limitations defense may be raised through a 12(b)(6) motion only if it is clear from the face of the complaint that the action would be time barred. Benak v. Alliance Capital Mgmt., L.P., 435 F.3d 396, 400 n.14 (3d Cir. 2006). Under Pennsylvania law, subrogation is an equitable doctrine that places the subrogee in the position of the subrogor, and thus subject to all defenses that may be raised against the subrogor. Public Serv. Mut. Ins. Co. v. Kidder-Friedman, 743 A.2d 485, 488 (Pa. Super. Ct. 1999). This includes a statute of limitations defense. See Torres v. Pennsylvania Fin. Responsibility Assigned Claims Plan, 645 A.2d 1322, 1323 (Pa. Super. Ct. 1994). The governing law is Pennsylvania's two-year statute of limitations for negligence claims. 42 Pa.C.S.A. § 5524.

Here, Suburban claims that Phoenix failed to bring its subrogation claim within the two-year statute of limitations period for negligence actions. It is undisputed that plaintiffs negligence action accrued on the date of the injury, in this case September 27, 2005. It is equally undisputed that plaintiffs are pursuing a negligence action in state court, which was filed within the applicable statute of limitations period. (see doc. 50, pg. 8.) Suburban therefore does not have a credible statute of limitations defense against the plaintiffs because of the timely filing of their action. Since a subrogee is subject to all defenses that may be raised against the subrogor, it follows that Suburban is barred from pursuing a statute of limitations defense against Phoenix by virtue of plaintiffs negligence suit being timely filed in state court. See Young v. State Farm Mut. Auto. Ins. Co., 951 F.2d 1262, ...


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