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Howard C. Lapensohn and Jill Abrams Lapensohn v. Lexington Insurance Company

July 23, 2012


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


Before this Court is Defendant's Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)(Doc. No. 4), Plaintiff's Response in Opposition thereto (Doc. No. 10), and Defendant's Reply to Plaintiff's Response (Doc. No. 11). For the reasons which follow, the Defendant's motion is denied.

Factual Background

According to the facts alleged in the complaint, Plaintiffs, Howard C. Lapensohn and Jill Abrams Lapensohn, on or about August 17, 2007, purchased property at 1106 Robin Road, Gladwyne, PA, on which was located a pre-existing dwelling. In the fall of 2007, Plaintiffs initiated a project to demolish the pre-existing dwelling and construct a larger residence on its footprint. In December 2007, Plaintiffs purchased an insurance policy from Defendant, Lexington Insurance Company, covering damage to the dwelling for a period beginning on December 31, 2007, and ending on December 31, 2008 (hereinafter "the Policy").

The construction of the new dwelling was substantially completed on December 24, 2008, and Plaintiffs moved into the dwelling on January 1, 2009. At some point after moving into the dwelling, Plaintiffs discovered damages to the home including cracks, "racked windows and door frames," tile damage, and "separation of walls from floors and ceilings." Compl. at ¶ 21. Plaintiffs also allege that issues with negative air quality have led to continuing damage and health issues.

Plaintiffs hired a forensic structural engineer in February of 2011, who determined that the dwelling is structurally unsound. The engineer determined that the pre-existing joist system upon which the home was built is not sufficient to support the load of the dwelling. Defendant also retained a forensic structural engineer who agreed with the determinations made by Plaintiffs' engineer in a report dated March 14, 2011.

Plaintiffs filed an insurance claim with Defendant through their broker by letter dated January 18, 2011. Plaintiffs then initiated this action in Pennsylvania state court on March 18, 2011, by Writ of Summons.*fn1 Defendant informed Plaintiffs that they were investigating the claim and would inform Plaintiffs of its coverage position. Defendant subsequently requested examinations under oath as well as documents related to Plaintiffs' claims. After a number of intervening events, Plaintiffs officially filed a complaint on February 21, 2012. Defendant subsequently removed the suit to this court pursuant to 28 U.S.C. §§ 1441 and 1332.

In their complaint, Plaintiffs allege two Pennsylvania state law claims. Count I states a breach of contract claim alleging that Defendant violated the policy by failing to pay for damages to the dwelling. Count II states a claim pursuant to 42 Pa.C.S.A. § 8371 alleging that Defendant's failure to pay on the Policy was in bad faith.

We now consider Defendant's Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6).

Standard of Review

When considering a Rule 12(b)(6) motion to dismiss, the district court must "accept as true the factual allegations in the complaint and all reasonable inferences that can be drawn therefrom." Krantz v. Prudential Invs. Fund Mgmt., 305 F.3d 140, 142 (3d Cir. 2002) (quoting Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996)). In so doing, the courts must consider "whether under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County 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)). The complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A complaint need not contain "detailed factual allegations" but a "formulaic recitation of the elements of a claim will not do" and the complaint must allege sufficient facts "to raise a right to relief above a speculative level." Lin v. Chase Card Servs., 427 Fed. Appx. 118, 121 (3d Cir. 2011) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A motion to dismiss should be granted only when a plaintiff fails to plead sufficient facts "to state a claim to relief that is plausible on its face." Coulter v. Doerr, No. 12-1864, 2012 U.S. App. LEXIS 10839, at *4 (3d Cir. Pa. May 30, 2012) (quoting Twombly, 550 U.S. at 570).


I. Defendant argues that suit should be barred by the suit limitation provision contained in the insurance policy.

The first basis for Defendant's Motion to Dismiss is that Plaintiffs' claims are barred by the two-year "suit limitation provision" found in the Policy because Plaintiffs did not commence this action until more than two years after the date of loss. The Policy states: "No action can be brought against us unless there has been full compliance with all of the terms under Section I of this policy ...

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