IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
July 21, 2011
ALLSTATE PROPERTY AND
CASUALTY INSURANCE COMPANY, DEFENDANT.
The opinion of the court was delivered by: Genee.k. Pratter, J.
Allstate Property and Casualty Insurance Company ("Allstate") issued an automobile insurance contract to Plaintiff Leonard Puggi. Mr. Puggi claims that following a car accident, Allstate failed to make and/or unreasonably delayed making the payments owed to him under the insurance contract. Mr. Puggi alleges three counts in his Complaint: Breach of Contract (Count I), Bad Faith (Count II), and a violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL") (Count III). Allstate moves to dismiss Counts I and III, and for the reasons that follow, the Motion is denied in part with respect to Count I and granted in part without prejudice with respect to Count III.
Statement of Facts
Mr. Puggi commenced this suit against Allstate seeking recovery of unpaid policy limits regarding a December 13, 2005 car accident that left him physically injured. *fn1 The insurance contract carried a $100,000 policy limit for Underinsured Motorist ("UIM") coverage and a $100,000 Policy Limit for Medical Expenses as of August 9, 2005. Compl., Ex. A (Auto. Policy Declarations). Following his car accident, Mr. Puggi's attorney sent Allstate a letter, dated May 20, 2009, giving notice that the other motorist in the accident had only $50,000 of bodily injury liability coverage, and reporting that the motorist's insurer, State Farm Insurance Company, had offered $45,000 to Mr. Puggi for his alleged damages. Id. ¶ 14, Ex. B. Mr. Puggi's attorney further demanded payment of the remaining amount available under the Allstate UIM policy limits. Compl. ¶ 16, Ex. B. Mr. Puggi alleges that despite his cooperation with all of Allstate's requests made in response to his UIM benefits claim, including the furnishing of all medical records and necessary permissions to view his file, Allstate failed to honor the claim, including for separate medical expenses that are owed to him. Id. ¶¶ 7, 33, 38, 40.
Count I of Mr. Puggi's Complaint is a breach of contract claim for
Allstate's failure to indemnify his losses under the insurance
contract, and/or for an unreasonable delay in making these payments.
Id. ¶ 47. Count II alleges that Allstate's failure
to pay and/or unreasonable delay in making payments constitutes bad
faith under Pennsylvania law. Id. ¶ 49. In Count
III, Mr. Puggi alleges that Allstate's conduct and actions constitute
unfair and deceptive practices under the Unfair Trade Practices and
Consumer Protection Law ("UTPCPL"). Id.
¶ 51. Because Allstate does not challenge Count II, only
the efficacy of Counts I and III are at issue here.
Standard of Review
A Rule 12(b)(6) motion to dismiss tests the sufficiency of a
complaint. Conley v. Gibson , 355 U.S. 41, 45-46
(1957). Rule 8 of the Federal Rules of Civil Procedure requires only
and plain statement of the claim showing that the pleader is
entitled to relief," Fed. R. Civ. P. 8(a)(2), in order to "give the
defendant fair notice of what the . . . claim is and the grounds upon
which it rests," Bell Atlantic Corp. v. Twombly ,
550 U.S. 544, 555 (2007) (quoting Conley , 355 U.S.
at 47). While a complaint need not contain detailed factual
allegations, the plaintiff must provide "more than labels and
conclusions, and a formulaic recitation of the elements of a cause of
action will not do." Id. (citations omitted).
Specifically, "[f]actual allegations must be enough to raise a right
to relief above the speculative level . . . ." Id.
In making such a determination, courts "must only consider those
facts alleged in the complaint and accept all of those allegations as
true." ALA, Inc. v. CCAIR, Inc. , 29 F.3d 855, 859
(3d Cir. 1994) (citing Hishon v. King & Spalding ,
467 U.S. 69, 73 (1984)); see also Twombly , 550
U.S. at 555 (stating that courts must assume that "all the allegations
in the complaint are true (even if doubtful in fact)"). The Court must
also accept as true all reasonable inferences that may be drawn from
the allegations, and view those facts and inferences in the light most
favorable to the non-moving party. Rocks v.
Philadelphia , 868 F.2d 644, 645 (3d Cir. 1989).
The Court, however, need not accept as true "unsupported
conclusions and unwarranted inferences," Doug Grant, Inc. v.
Greate Bay Casino Corp. , 232 F.3d 173, 183-84 (3d Cir. 2000)
(citing City of Pittsburgh v. West Penn Power Co. ,
147 F.3d 256, 263 n.13 (3d Cir. 1998)), or the plaintiff's "bald
assertions" or "legal conclusions," Morse v. Lower Merion
Sch. Dist ., 132 F.3d 902, 906 (3d Cir. 1997).
To evaluate a motion to dismiss, the Court may consider the
allegations contained in the complaint, exhibits attached to the
complaint, matters of public record and records of which the Court may
take judicial notice. See Tellabs, Inc. v. Makor Issues &
Rts. , 551 U.S. 308, 322-23
(2007); Pension Benefit Guar. Corp. v. White Consol.
Indus. , 998 F.2d 1192, 1196 (3d Cir. 1993). However, the
Court is otherwise constrained to the facts alleged in the complaint.
A. Count I: Breach of Contract
Allstate has raised insufficient grounds for this Court to dismiss Count I. Allstate argues that the breach of contract claim should be dismissed because it has already paid Mr. Puggi the full $100,000 UIM policy limits owed to him, thus fully discharging Allstate's obligations under the contract. Def.'s Mot. at 10. Mr. Puggi, in his response, does not contest this assertion. *fn2
Nonetheless, Allstate's argument does not provide a sufficient basis for granting a motion to dismiss. Allstate's assertion that it paid Mr. Puggi's claim is an affirmative defense, which does not provide a basis for a Rule 12(b)(6) motion. See In Re Adams Golf , 381 F.3d 267, 277 (3d Cir. 2004) ("[A]n affirmative defense may not be used to dismiss a plaintiff's complaint under Rule 12(b)(6)."); Johnson v. Resources for Human Dev., Inc. , 860 F. Supp. 218, 221 (E.D. Pa. 1994) ("[A]n affirmative defense will not generally support a Rule 12(b)(6) motion to dismiss."). Thus, the Court concludes it must deny Allstate's Motion to Dismiss Count I.
B. Count III: UTPCPL Claim
Allstate argues that Mr. Puggi has failed to allege facts
sufficient to support his Section
9.2 UTPCPL claim posed in Count III, because Allstate claims that
Mr. Puggi has failed to plead the element of reliance. Def.'s Mot. at
6. Both parties agree that detrimental reliance on the other party's misrepresentation
is a required element of a Section
9.2 UTPCPL claim. *fn3 Pl.'s Resp. at 3;
Def.'s Mot. at 6.
Mr. Puggi contends that the reliance element is satisfied, though
not on the basis of facts currently alleged in the Complaint.
Specifically, in his response brief, Mr. Puggi states that he "relied
on the representations by [Allstate] that his accident related medical
bills would be paid." Pl.'s Resp. at 3. Mr. Puggi contends that in
reliance on these representations he sought medical treatment, the
costs of which he now must pay himself, resulting in unpaid medical
bills in the amount of $10,665.11. Id. at 3. That
being said, the Complaint is devoid of specific factual allegations
supporting this argument. Instead, it merely alleges that Allstate's
refusal to compensate Mr. Puggi for an unspecified amount of UIM
benefits and medical expenses under the insurance contract constitutes
unfair and deceptive actions. *fn4 Compl.
¶¶ 51-53. Because Mr. Puggi appears to have
proffered a theory that is not alleged in the Complaint, the Court
concludes that the Motion should be granted in part with respect to
The Court also concludes that it is appropriate to grant Mr. Puggi leave to amend his Complaint as to Count III, should he be able to do so in good faith. Leave to amend is to be freely given and the decision to grant leave to amend rests within the discretion of the court. Waterfront Renaissance Assoc. v. City of Philadelphia , 701 F. Supp. 2d 633, 639 (E.D. Pa. 2010). Courts may deny a party leave to amend when there is undue delay, bad faith, undue prejudice to the opposing party and futility of amendment. Arthur v. Maersk, Inc. , 434 F.3d 196, 204 (3d Cir. 2006); Foman v. Davis , 371 U.S. 178, 182 (U.S. 1962). Based on the parties' filings to date, there is nothing here to suggest that granting Mr. Puggi leave to amend would lead to any such outcome. Accordingly, Count III is dismissed without prejudice for Mr. Puggi to amend this Count. *fn5
For the foregoing reasons, Allstate's motion to dismiss is denied in part with respect to Count I and granted in part without prejudice with respect to Count III. An appropriate Order follows.
BY THE COURT:
GENE E.K. PRATTER United States District Judge