The opinion of the court was delivered by: Chief Judge Kane
Pending before the Court is Third Party Defendant Alex R. Szeles, Inc.'s ("Szeles") motion to dismiss Defendant/Third Party Plaintiff Encompass Insurance Company of America's ("Encompass") complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), or in the alternative, motion for a more definite statement pursuant to Rule 12(e). (Doc. No. 12.) The motion argues that Encompass has failed to plead facts which would make Szeles liable to Encompass. The Court finds that Encompass has adequately pleaded a contribution claim against Szeles but has not adequately pleaded an indemnification claim. Therefore, the motion will be granted in part and denied in part.
This case was commenced by Plaintiffs Fred and Johnette Dameshek (the "Damesheks") against Encompass based on an insurance policy provided by Encompass for the Damesheks' residence. Among other coverage, the insurance policy provided for Additional Living Expenses ("ALE")-necessary increases in living expenses if a covered loss made the Damesheks' residence uninhabitable. The policy provided that payment of ALE would last: (1) the shortest time required to repair or replace the damaged portion of the residence; or (2) if the Damesheks chose to permanently relocate, the shortest time required to settle elsewhere. (Doc. No. 1 ¶ 9.) In either case, payment of ALE was not to last for more than one year. (Id.)
On April 7, 2009, the Damesheks' home was damaged in a fire. The
Damesheks moved out of the home while repairs commenced. The Damesheks
claim that they were advised by an Encompass insurance adjuster, James
Dunn, that Encompass would assist them with housing-even beyond the
ALE expiration date. (Doc. No. 1 ¶¶ 11-13.) According to the
Damesheks, Dunn advised them that "Mr. Szeles, Sr.,"*fn1
would be providing them a place to reside rent-free. (Id. ¶¶
14-15.) Based on this information, the Damesheks moved from their
prior rental property to the property provided by "Mr. Szeles" on July
1, 2010. Soon after arriving, however, the Damesheks were advised by
Brian J. Szeles that there was only an agreement to pay their rent for
the month of August 2010. (Id. ¶ 18.)
The Damesheks allege that Szeles, the company undertaking restoration work on their home, "agreed to provide [the Damesheks] with housing at no charge to them if their house was not completed within the one . . . year during which they had additional living expense coverage." (Id. ¶ 20.) However, because of a delay stemming from a disagreement between Encompass and Szeles in November 2009, Szeles withdrew its guaranteed completion date and its agreement to cover the Damesheks' ALE. (Id. ¶¶ 21-23.) On November 19, 2010, the Damesheks received an eviction notice for non-payment of the rent in their current temporary residence. (Id. ¶ 26.) In December 2010, Encompass denied the Damesheks' request for ALE or to resolve the rent issue with "Mr. Szeles." (Id. ¶ 25.)
On January 5, 2011, the Damesheks initiated this lawsuit by filing a seven-count complaint against Encompass. (Doc. No. 1.) The Damesheks pleaded claims for breach of contract, bad faith, misrepresentation, negligence, deceit, breach of the covenant of good faith and fair dealing, and unfair trade practices. (Id.) On March 21, 2011, Encompass filed an answer to the complaint and, on that same date, filed a third party complaint against Szeles. The third party complaint asserts that if Encompass is found liable to the Damesheks, Szeles is "jointly and severally liable with [Encompass], and/or solely liable to [the Damesheks], any liability on the part of Defendant Encompass being expressly denied." (Doc. No. 7 ¶ 40.) In addition, the third party complaint also asserts that Encompass has a right to contribution and indemnity against Szeles in the event of a finding of liability against Encompass. (Id. ¶ 41.)
In analyzing a complaint under Rule 12(b)(6), "courts '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.'" Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). To undertake such an analysis, the Court should first separate the factual and legal elements of a claim. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). All well-pleaded facts must be accepted as true, but mere legal conclusions may be disregarded. Id. The Court must determine whether the complaint has shown through its facts that its claim is plausible and that the plaintiff is entitled to relief. Id.; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (stating that a complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level"). "This does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at 556) (internal quotation marks omitted).
In challenging Encompass's complaint against it, Szeles posits only that the factual averments in the third party complaint do not give rise to an independent action by Encompass against Szeles. Instead, Szeles argues that Encompass has merely raised claims that the Damesheks "could have brought against Szeles"-not claims that Encompass has against Szeles. (Doc. No. 21 at 2.) In response, Encompass states that its complaint contains numerous, specific factual allegations against Szeles, including allegations that Szeles and the Damesheks were in contractual privity with one another, that the Damesheks relied upon representations and guarantees made by Szeles, and that Szeles failed to meet its guaranteed completion date and failed to follow-through [sic] on various representations.
It further alleges that but for Szeles' delays and work stoppages in connection with the performance of its contractual obligations at the Dameshek residence, they would have been able to re-occupy the residence on or before April 7, 2010, and but for Szeles' negligent and/or intentional delays and work stoppages in connection with the performance of its contractual obligations at the Damesheks' residence, they would not have incurred any of the expenses and damages alleged in their complaint. (Doc. No. 19 at 5.) Encompass also states that Szeles's negligently contributed to a delay in repairs alleged in the Damesheks negligence claim, stemming from a dispute between Szeles and Encompass. (Id. at 6.) As a result, Encompass argues that "[t]he Third Party Complaint is premised upon the same set of factual circumstances and allegations . . . as those giving rise to the Damesheks' Complaint, and all such counts that are set forth in the Damesheks' Complaint and can be appropriately be passed through to Szeles are viable and ripe for adjudication." (Id. at 8.)
According to Rule 14 of the Federal Rules of Civil Procedure which governs impleader, "[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." Fed. R. Civ. P. 14(a)(1). Thus, the determinative issue as to this motion is whether Encompass may assert an indemnification or contribution claim against Szeles based upon the claims that have been lodged against Encompass by the Damesheks. After reviewing the arguments set forth by the parties, the Court concludes that Encompass has asserted a cognizable ...