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Kenneth Keppol v. State Farm Insurance

January 25, 2012

KENNETH KEPPOL, PLAINTIFF,
v.
STATE FARM INSURANCE,
DEFENDANT.



The opinion of the court was delivered by: Schiller, J.

MEMORANDUM

Kenneth Keppol has sued State Farm Mutual Automobile Insurance ("State Farm") for its failure to pay benefits for his lost wages after an injury he sustained. Pending before the Court is State Farm's motion to dismiss Keppol's claims for bad faith, breach of duty of good faith and fair dealing, and breach of fiduciary duty. State Farm also seeks to dismiss Keppol's request for attorneys' fees for certain of his claims. For the reasons that follow, the Court grants the motion in part and denies it in part.

I. BACKGROUND

On June 23, 2011, Keppol injured his back and leg when he pulled up on the door of a tractor-trailer that was insured by State Farm. (Notice of Removal Ex. A [Compl.] ¶¶ 3, 6.) Keppol was the policyholder and the insured under the State Farm policy, which provided for wage loss benefits, and he was out of work "for a considerable period of time" after the incident. (Id. ¶¶ 3, 8.) Keppol has submitted records and reports of the incident to State Farm in support of his claim for wage loss benefits. (Id. ¶ 14.) State Farm has failed to pay the wage loss benefits of up to $50,000, at a rate of $2500 per month, to which Keppol says he is entitled under the policy. (Id.; Pl.'s Answer to Def.'s Mot. to Dismiss Ex. A [Confirmation of Coverage].) Keppol filed a Complaint against State Farm in state court asserting claims for declaratory judgment (Count I), bad faith (Count II), breach of duty of good faith and fair dealing (Count III), and breach of fiduciary duty (Count IV). State Farm, which removed the action to this Court, moves to dismiss Counts II, III, and IV, as well as Keppol's request for attorneys' fees associated with Counts I, III, and IV.

II. STANDARD OF REVIEW

In reviewing a motion to dismiss for failure to state a claim, a district court must accept as true all well-pleaded allegations and draw all reasonable inferences in favor of the non-moving party. See Bd. of Trs. of Bricklayers & Allied Craftsman Local 6 of N.J. Welfare Fund v. Wettlin Assocs., 237 F.3d 270, 272 (3d Cir. 2001). A court should accept the complaint's allegations as true, read those allegations in the light most favorable to the plaintiff, and determine whether a reasonable reading indicates that relief may be warranted. Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59, 64 (3d Cir. 2008). "But a court need not credit a complaint's bald assertions or legal conclusions when deciding a motion to dismiss." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (citation omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

"Factual allegations [in a complaint] must be enough to raise a right to relief above the speculative level . . . ." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a complaint must include "enough facts to state a claim to relief that is plausible on its face." Id. at 570. Although the federal rules impose no probability requirement at the pleading stage, a plaintiff must present "enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element[s]" of a cause of action. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (citation omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. Simply reciting the elements will not suffice. Id.; see also Phillips, 515 F.3d at 231.

The Third Circuit Court of Appeals has directed district courts to conduct a two-part analysis when faced with a Rule 12(b)(6) motion. First, the legal elements and factual allegations of the claim should be separated, with the well-pleaded facts accepted as true but the legal conclusions disregarded. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Second, the court must make a commonsense determination of whether the facts alleged in the complaint are sufficient to show a plausible claim for relief. Id. at 211. If the court can infer only the mere possibility of misconduct, the complaint must be dismissed because it has alleged-but has failed to show-that the pleader is entitled to relief. Id.

When faced with a motion to dismiss for failure to state a claim, courts may consider the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim. Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004).

III. DISCUSSION

A. Bad Faith

The Pennsylvania bad faith statute, 42 Pa. Cons. Stat. § 8371, provides: In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions:

(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the ...


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