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Laura Simmons v. Trumbull Insurance Company

April 25, 2012

LAURA SIMMONS
v.
TRUMBULL INSURANCE COMPANY, ET AL.



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

MEMORANDUM

Laura Simmons filed the instant action against her automobile insurer, alleging breach of contract and statutory bad faith pursuant to 42 Pa. Cons. Stat. Ann. § 8371. Before the Court is the Motion to Dismiss brought by Defendants Trumbull Insurance Company ("Trumbull") and Hartford Financial Services Group, Inc. d/b/a/ The Hartford ("The Hartford") seeking dismissal of all claims asserted against The Hartford as well as dismissal of Simmons's statutory bad faith claim. For the following reasons, the Motion is denied.

I. BACKGROUND

The Complaint alleges the following facts. Trumbull, acting by and through The Hartford, issued an automobile insurance policy to Simmons for Simmons's 1999 Toyota Camry with an effective date of August 16, 2009 through February 16, 2010 (the "Policy"). (Compl. ¶ 7.) On or about December 15, 2009, when the Policy was in full force and effect, the Camry's engine caught fire, resulting in substantial damage to the car and expenses for towing, storage and rental. (Id. ¶ 8.) Simmons promptly gave Defendants notice of the loss and complied with all of the terms and conditions of the Policy. (Id. ¶ 9.) Defendants have refused to pay any benefits to Simmons under the Policy for her covered loss. (Id. ¶ 10.) Defendants' employee, Shirley Charpentier, notified Simmons by letter dated January 12, 2010, that her claim had been denied because her loss was caused by an electrical and/or mechanical failure, which was excluded from coverage by the Policy. (Compl. Ex. B.)

Simmons has asserted two claims against Defendants arising from their denial of coverage. Count I asserts a claim for breach of contract and Count II asserts a claim for statutory bad faith. Defendants have moved to dismiss both claims as against The Hartford, on the ground that The Hartford is not an insurance company and thus is not a proper defendant to this action. Defendants have also moved to dismiss Count II on the ground that Simmons's statutory bad faith claim fails to state a claim upon which relief may be granted.

II. LEGAL STANDARD

When considering a motion to dismiss pursuant to Rule 12(b)(6), we "consider only the complaint, exhibits attached to the complaint, [and] matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents." Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (citing Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)). We take the factual allegations of the complaint as true and draw all reasonable inferences in favor of the plaintiff. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). Legal conclusions, however, receive no deference, and the court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286 (1986) (cited with approval in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

A plaintiff's pleading obligation is to set forth "a short and plain statement of the claim," Fed. R. Civ. P. 8(a)(2), which gives the defendant "'fair notice of what the . . . claim is and the grounds upon which it rests.'" Twombly, 550 U.S. at 555 (alteration in original) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). The "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (citing Twombly, 550 U.S. at 556). In the end, we will dismiss a complaint if the factual allegations in the complaint are not sufficient "to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, at 235-36 (3d ed. 2004)).

III. DISCUSSION

A. The Hartford

Defendants argue that The Hartford should be dismissed as a defendant in this action because it was not Simmons's insurance company and, therefore, was not a party to her insurance contract and is not a proper defendant with respect to her statutory bad faith claim. Under Pennsylvania law, "'one cannot be liable for a breach of contract unless one is a party to that contract.'" Lockhart v. Federal Ins. Co., Civ A. No. 96--5330, 1998 WL 151019, at *3 (E.D. Pa. Mar. 30, 1998) (quoting Electron Energy Corp. v. Short, 597 A.2d 175, 177 (Pa. Super. Ct. 1991)). Similarly, Pennsylvania's insurance bad faith statute "42 Pa. Cons. Stat. Ann. § 8371, "allows a claim only for bad faith conduct 'toward the insured' by 'the insurer.'" Totty v. Chubb Corp., 455 F. Supp. 2d 376, 381 (W.D. Pa. 2006) (quoting Lockhart, 1998 WL 151019, at *4).

The Pennsylvania Superior Court has recognized that the determination of whether a corporation is an insurer for purposes of the bad faith statute is a factual question that requires an examination of "'the policy documents themselves, and . . . the actions of the company involved.'"

Nordi v. Keystone Health Plan West Inc., 989 A.2d 376, 383-84 (Pa. Super. Ct. 2010) (quoting Brown v. Progressive Ins. Co., 860 A.2d 493, 498 (Pa. Super. Ct. 2004)). The Superior Court instructs us to "'look at two factors: (1) the extent to which the company was identified as the insurer on the policy documents; and (2) the extent to which the company acted as an insurer.'" Id. at 384 (quoting Brown, 860 A.2d at 498). "This second factor is significantly more important than the first factor, because it focuses on the true actions of the parties rather than the vagaries of corporate structure and ownership." Id. at 384 (quoting Brown, 860 A.2d at 498-99). A company "'acts as an insurer when it issues policies, collects premiums and in exchange assumes certain risks and contractual obligations.'" Cozzone v. AXA Equitable Life Ins. Soc., Civ. A. No. 10-2388, 2011 WL 1375264, at *3 (M.D. Pa. Apr. 12, 2011) (quoting Brand v. AXA Equitable Life Ins. Co., Civ. A. No. 08-2859, 2008 WL 4279863, at *4 (E.D. Pa. Sept. 16, 2008)).

The Complaint does not specifically allege that The Hartford is Simmons's insurer, but alleges that Trumbull issued the Policy by and through The Hartford. (Compl. ¶ 7.) Simmons attached a copy of her Financial Responsibility Insurance Identification Card ("Insurance Card") to the Complaint. (Compl. Ex. A.) The Insurance Card identifies Trumbull as Simmons's insurer; it does not mention The Hartford. The Policy also identifies Trumbull as Simmons's insurer, but The Hartford's logo appears next to Trumbull's name on the Policy's Declarations page.*fn1 (Docket No. 4-3 at 4.) The Policy also contains language that implies that The Hartford is Simmons's insurer. The third page of the Declarations section of the Policy, Form A-4800-0, contains the following language: "If you're ever in an accident . . . report it right away! Put the resources, reputation and resolve of The Hartford to work for you immediately." (Id. at 6.) Another page of the Policy, Form No. CAF-3030-0, ...


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