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Monica Cozzone, D.O v. Axa Equitable Life Insurance Society of the United States

April 12, 2011


The opinion of the court was delivered by: Judge Munley


Before the court is the defendants' motion to dismiss the complaint in its entirety as to Defendant Disability Management Services, Inc. and to dismiss Count II of the complaint as to Defendant AXA Equitable Life Insurance Society of the United States. (Doc. 2). The motion has been fully briefed and is ripe for disposition.


Plaintiff Monica Cozzone, D.O. ("Cozzone") is insured under an Overhead Expense Insurance Policy ("policy") issued by Equitable Life Assurance Society of the United States, a predecessor of Defendant AXA Equitable Life Insurance Society of the United States ("AXA"), to cover Cozzone for loss resulting from injury or sickness. (Compl. ¶¶ 5, 6 (Doc. 1-2)). Cozzone applied for benefits under the policy based on "conditions which arose on or about December 5, 2005." (Id. ¶ 8).

Cozzone alleges that AXA, "through its third party administrator, representative and agent, [Defendant] Disability Management Services ["DMS"], unlawfully delayed and denied prompt payment of benefits in violation of said policy. . . ." (Id. ¶ 9). Cozzone also alleges that AXA, through DMS, "failed to provide all payments due and owing under the terms and obligations of the defendants under said policy. . . ." (Id. ¶ 10). According to Cozzone, AXA, through DMS, "failed to provide full payment of all benefits due and owing under said insurance policy in March, 2007 and continued to fail to provide full and timely payment of all benefits due and owing thereafter including reimbursement of insurance charges, including but not limited to malpractice insurance tail expenses, salary replacement reimbursement . . . and other expenses related to Plaintiff's place of business . . . ." (Id. ¶ 12). These allegations comprise Cozzone's claim for breach of contract, in Count I of Cozzone's complaint.

Cozzone also brings a claim under Pennsylvania's Bad Faith Statute, 42 PA. CONS. STAT. ANN. § 8371 (Count II). In support of her claim, Cozzone alleges that AXA and DMS "have arbitrarily and capriciously failed to timely and fully pay all benefits due and owing" under the policy without reasonable basis. (Compl. ¶¶ 15, 16). Finally, Cozzone alleges that AXA and DMS acted in bad faith when it "arbitrarily, intentionally and capriciously delayed and and denied all benefits due" under the policy. (Id. ¶ 17).

Cozzone filed her complaint in the Court of Common Pleas of Luzerne County, Pennsylvania, on October 20, 2010. (Compl. (Doc. 1-2)). AXA removed the action to this court on November 18, 2010. (Notice of Removal (Doc. 1)). On November 24, 2010, the defendants filed a motion to dismiss, bringing the case to its present posture. (Doc. 2).


Because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, the court has removal 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[.]"); 28 U.S.C. § 1441 (A defendant can generally remove a state court civil action to federal court if the federal court would have had original jurisdiction to address the matter pursuant to the diversity jurisdiction statute).

As a federal court sitting in diversity, we must apply state law. Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)). In this case, the relevant state is Pennsylvania. If the state supreme court has not yet addressed an issue before us, we must predict how that court would rule if presented with that issue. Nationwide v. Mutual Ins. Co., 230 F.3d 634, 637 (3d Cir. 2000). In so doing, we must examine the opinions of the lower state courts, and we cannot disregard them unless we are convinced by other persuasive data that the highest court would rule otherwise. Id.


A 12(b)(6) motion tests the sufficiency of a complaint's allegations. 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 Third Circuit requires the plaintiff to describe "enough facts to raise a reasonable expectation that discovery will reveal evidence of" each necessary element of the claims alleged in the complaint. 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.

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).

To decide a motion to dismiss, a court generally should consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim. See In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997); Pension Benefit ...

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