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Yuriy Pinkhasov v. Allstate Insurance

June 20, 2011

YURIY PINKHASOV, PLAINTIFF
v.
ALLSTATE INSURANCE, DEFENDANT



The opinion of the court was delivered by: Judge Munley

MEMORANDUM

Before the court is the defendant's motion to dismiss Counts II and III of the plaintiff's complaint. (Doc. 3). The motion has been fully briefed and is ripe for disposition.

BACKGROUND

Plaintiff Yuriy Pinkhasov resides and owns property in Pittston, Pennsylvania. (Doc. 1-1, Ex. A to Notice of Removal, Complaint, ¶ 1) (hereinafter "Complaint"). Defendant Allstate Property and Casualty Insurance Company (hereinafter "Allstate" or "defendant") is a foreign corporation, organized and existing under the laws of the State of Illinois. (Id.at ¶ 2). Allstate regularly engages in the sale of insurance in Pennsylvania as a qualified insurer. (Id.at ¶ 3). Prior to the events described below, defendant issued a Homeowners Insurance Policy to the plaintiff covering his Pittston residence.*fn1 (Id.at ¶ 5).

Specifically, the policy set coverage limits of $250,000 for the dwelling, $25,000 for other structures, and $150,000 for personal property.

(Id. at 14). The insurance contract also provides compensation for temporary loss of use, debris removal and temporary repairs after a loss. (Id.at ¶¶ 9-10). The policy covers damage from sudden and accidental escape of water. (Id. at 17). It does not, however, cover losses caused by continuous or repeated seepage and leakage. (Id.). The policy also does not compensate for damage from wear and tear, deterioration, mold, wet rot, etc. (Id.).

On or about August 10, 2010, while the policy was in effect, the plaintiff discovered extensive water damage to his dwelling, and belongings therein, throughout the basement. (Id. at ¶¶ 12, 18, 26-27). The water originated from a leak, rupture, and/or break in the main water line in the basement. (Id. at ¶ 14). The plaintiff immediately reported the loss to Allstate, and provided any relevant information requested. (Id.at ¶¶ 13-15). Allstate refused payment on the claim, without investigation or inspection of the property.*fn2 (Id.at ¶¶ 16-17). As a result of the leak, the plaintiff incurred costs of repair, mitigation, debris removal, and loss of use. (Id. at ¶¶ 29-31). Also, in the absence of payment, the plaintiff has been unable to complete necessary structural repairs, resulting in further damage including the growth of mold. (Id. at ¶ 31).

Plaintiff Pinkhasov filed a complaint in the Lackawana Court of Common Pleas asserting the following three counts against Defendant Allstate: Count I, breach of contract; Count II, violation of the duty to act in good faith pursuant to 42 PA. CONST. STAT. ANN. §8731; and Count III, violation of the Unfair Trade Practices and Consumer Protection Law, (hereinafter "UTPCPL"), 75 PA. STAT. §201-1 et seq. (Complaint). Plaintiff seeks $74,962.82 in compensatory damages from the breach of contract claim. (Doc. 1 ¶ 10). Under his bad faith claim, plaintiff seeks punitive damages, interest and attorney's fees. Finally, plaintiff may be eligible for treble damages for defendant's violations of the UTPCPL. (Id.at ¶¶ 11-12).

Defendant removed the case to this court on January 25, 2011, asserting this court's diversity jurisdiction. (Doc. 1). Defendant then filed a motion to dismiss Counts II and III of the complaint pursuant to rule 12(b)(6) of the Federal Rules of Civil Procedure, which brings this case to its present posture.

JURISDICTION

The court has removal jurisdiction over this case pursuant to the diversity statute, 28 U.S.C. § 1332. Complete diversity exists between the plaintiff, a citizen of Pennsylvania, and the defendant, an Illinois corporation, with its principle place of business in Illinois. (Complaint ¶ 1; Doc. 1 ¶ 5). The amount in controversy exceeds $75,000. (Id. at ¶¶ 9-13). Because we are sitting in diversity, the substantive law of Pennsylvania shall apply to the instant case. Chamberline v. Giampapa, 201 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)).

STANDARD OF REVIEW

When a 12(b)(6) motion is filed, the sufficiency of the complaint is tested. Federal Rule of Civil Procedure 12(b)(6) authorizes a court to dismiss a complaint that fails "to state a claim upon which relief can be granted." FED. R. CIV. P. 12(b)(6). In deciding a motion to dismiss, a district court generally should consider only the complaint, exhibits attached to the complaint, and matters of public record. Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007); Pension Benefit Guar. Corp v. White Consul. Indus., Inc., 998 F.2d 1192, 1196 (3d. Cir. 1993).

Pleadings pursuant to Rule 8 need only provide "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). The purpose of Rule 8 is to "give the defendant fair notice of what . . . the claim is and the grounds upon ...


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