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Jason Timothy and Jessica Timothy v. State Farm Fire and Casualty Company

August 23, 2012


The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge


Pending before the Court is the DEFENDANT STATE FARM FIRE AND CASUALTY COMPANY'S MOTION TO DISMISS COUNTS II, III, AND IV OF PLAINTIFFS' AMENDED COMPLAINT, with brief in support (Document No. 6). Plaintiffs have filed a response in opposition (Document No. 10), to which Defendant has replied (Document No. 11). The motion is ripe for disposition.


The following facts are taken from Plaintiffs' Amended Complaint and exhibits attached thereto. This action arises out of an insurance claim submitted to State Farm by Jason and Jessica Timothy in 2011. On or about March 23, 2011, Plaintiffs' home was damaged due to an alleged tornado, high winds, and hail in the area of their home at 228 South 4th Street in Youngwood, Pennsylvania. Am. Compl. ¶¶ 1, 8. At the time, Plaintiffs maintained a homeowner's insurance policy with Defendant that was to provide benefits for damage to their property caused by a weather event. Am. Compl. ¶ 5. Pursuant to the policy, Plaintiffs filed a claim with Defendant for property damage. Am. Compl. ¶ 9. The damage to Plaintiffs' home was inspected by Defendant's employee, Independent Adjuster Manuel Crispin ("Crispin"), and on November 7, 2011, Plaintiffs were mailed a check in the amount of $250.80*fn1 as compensation for their claim. Am. Compl. ¶¶ 10, 11. A copy of the letter to Plaintiffs from Crispin is attached to Plaintiffs' Amended Complaint as Exhibit 1.

Plaintiffs subsequently informed Defendant that their home sustained damages in excess of those assessed by Crispin, noting that they had found roof shingles in their yard. Am. Compl. ¶¶ 13, 14. A second inspection of Plaintiffs' property was performed by Defendant's employee, Independent Adjuster Michael St. John ("St. John") on March 1, 2012. Am. Compl. ¶ 15; Am. Compl. Ex. 2. On March 7, 2012, St. John sent a letter to Plaintiffs detailing the results of his inspection, and estimated damages at $796.94.*fn2 Am. Compl. Ex. 2. The letter from St. John includes greater detail regarding the damage to Plaintiffs' home that he observed during the inspection. Am. Compl. Ex. 2.

The letter reflects, in relevant part, as follows: (1) St. John noted covered damages to two aluminum power vent covers and a window; (2) St. John did not find wind or hail damage to the shingles; (3) Plaintiff's contractor, Christopher Lowance ("Lowance") from Bella Construction, participated in parts of the inspection and accompanied St. John onto the roof over the kitchen; (4) Lowance agreed with St. John that there was no wind or hail damage to the shingles or any part of the roof over the kitchen; (5) Lowance observed that the flashing between the kitchen roof and the adjacent wall was poorly installed, and likely resulted in the leak in Plaintiffs' kitchen; (6) St. John showed Lowance and Plaintiffs photos of the second story roof depicting no wind damage, no missing or creased shingles, and no hail impact marks with the exception of the aluminum power vent covers; (7) a slippage issue existed on the left upper slope of the home which was either the result of installation error or normal wear and tear; (8) while some shingles on the second story roof had reached their life expectancy and were beginning to show normal signs of wear, there was no storm damage to the roofing system; (9) interior leaks occurred over time as the result of the roofing system gradually wearing out, not the result of accidental direct physical loss; (9) Plaintiffs' policy only covered accidental direct physical loss; and (10) Plaintiffs' policy provided that any action against Defendant must be commenced within one year after the date of damage. Am. Compl. Ex. 2.

Thereafter, Plaintiffs engaged Michael Vestal ("Vestal"), a public adjuster, who provided Defendant with photographs showing hail strikes to the roof and siding. Am. Compl. ¶¶ 20, 23. Defendant advised Plaintiffs that the siding damage appeared to be caused by stones being ejected from a lawnmower or other objects being thrown against the home. Am. Compl. ¶ 24. Plaintiffs also obtained estimates for repair of the storm damage from DiMatteo Builder Services, who assessed the damages to Plaintiffs' home at $41,102.00 for the roof and interior damage to the kitchen and hallway, and $22,665.00 for the siding. Am. Compl. ¶ 22.

Plaintiffs commenced this action in the Court of Common Pleas of Westmoreland County. State Farm timely removed the case to this Court and filed a motion to dismiss the complaint. Rather than responding to the motion, Plaintiffs filed a First Amended Complaint on or about June 26, 2012. (Document No. 4) ("Amended Complaint"). Plaintiffs' Amended Complaint alleges four counts: breach of contract (Count I), breach of duty of good faith and fair dealing (Count II), statutory bad faith under 42 Pa. C.S.A. § 8371 (Count III), and violation of the Pennsylvania Unfair Trade Practice and Consumer Protection Law ("UTPCPL"), 73 Pa. Cons. Stat. Ann. § 201-1 et seq.

Defendant moves to dismiss Counts II, III, and IV of Plaintiffs' Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. Def.'s Mot. to Dismiss ¶ 2. Specifically, State Farm alleges that Count II (breach of duty of good faith and fair dealing) is: (1) barred by the "gist of the action" doctrine because the claim arises from and is solely based on a contractual duty, and (2) is duplicative of, and subsumed by Count I (breach of contract). Def.'s Mot. to Dismiss ¶¶ 3, 4. With regard to Count III (statutory bad faith), Defendant alleges that Plaintiffs have failed to plead factual matter sufficient to state a claim against Defendant that is plausible on its face.

Def.'s Mot. to Dismiss ¶ 5. As to Count IV (violation of the UTPCPL), Defendant alleges that (1) the claim is based on nonfeasance, rather than misfeasance, which is not actionable under the UTPCPL, or, in the alternative, (2) Plaintiffs have failed to plead factual matter sufficient to state a claim against Defendant that is plausible on its face. Def.'s Mot. to Dismiss ¶ 6. Plaintiffs oppose Defendant's motion as to each count.


Rule 8 of the Federal Rules of Civil Procedure provides that a pleading must set forth a claim for relief which contains a short and plain statement of the claim showing that the pleader is entitled to relief. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of a complaint, in whole or in part, for failure to state a claim upon which relief can be granted. When a court considers a motion to dismiss under Fed. R. Civ. P. 12(b)(6), it must view all allegations stated in the complaint as true, and construe all inferences in the light most favorable to the plaintiff. Simmons v. Nationwide Mut. Fire Ins. Co., 788 F. Supp. 2d 404, 406 (3d Cir. 2011) (citing Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)); see also Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993)). However, the court need not "credit a complaint's 'bald assertions' or 'legal conclusions.'" Cal. Pub. Employees' Ret. Sys. v. Chubb Corp., 394 F.3d 126, 143 (3d Cir. 2004) (quoting Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997)). Legal conclusions lacking factual support are not entitled to the assumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Twombly, 550 U.S. at 556--557 (noting the court need not accept legal conclusions cast as factual allegations); Fowler v. UPMC Shadyside, 578 F.3d 203, 210--211 (3d Cir. 2009) (noting that a court "must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions").

A complaint should not be dismissed if, accepting as true all of the factual allegations in the complaint, a plaintiff has set forth "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. To meet this standard, a plaintiff must allege sufficient facts "to raise a reasonable expectation that discovery will reveal evidence of" each necessary element of a claim. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556).

Generally, "to the extent that [a] court considers evidence beyond the complaint in deciding a 12(b)(6) motion, it is converted to a motion for summary judgment." Anjelino v. New York Times Co., 200 F.3d 73, 88 (3d Cir. 1999). However, in resolving a 12(b)(6) motion to dismiss, a court may look beyond the complaint to matters of public record, including court files and records, and documents that are referenced in the complaint or that are essential to a plaintiff's claim which are attached to a defendant's motion. Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Under this standard, the exhibits attached to Plaintiffs' complaint, including correspondence between Plaintiffs and the Independent Adjusters regarding inspections of Plaintiffs' property, estimates of damage from DiMatteo Builder Services, and photographs taken by public adjuster Michael Vestal may be considered by the court without converting the motion to dismiss into a motion for summary judgment. See Pension Ben. Guar. Corp., 998 F.2d at 1196-97.


A. Count II -- Breach of Duty of Good Faith and Fair Dealing

In its Brief in Support of Defendant's Motion to Dismiss ("Def.'s Br."), State Farm argues that Plaintiffs' claim for breach of duty of good faith and fair dealing (Count II) is barred by the gist of the action doctrine, as "Plaintiffs are attempting to re-cast a breach of an insurance contract claim as a common law tort claim." Def.'s Br. 6. Plaintiffs, on the other hand, argue that Pennsylvania courts have recognized a duty to act in good faith in the context of "the relationship between insurer and insured." Pls.' Br. in Opp'n 4 (citing Gray v. Nationwide Mut. Ins. Co., 223 A.2d 8 (1966); Gedeon v. State Farm Mut. Auto. Ins. Co., 188 A.2d 320 (1963)).

The argument of Plaintiffs and citation to authority disregards a crucial point. The question before this Court is not whether a duty of good faith and fair dealing exists, but whether that cause of action exists independently from Plaintiffs' breach of contract claim (Count I) in this case. The Court concludes that it does not.

Initially, the Court notes that the existence of a contract between parties does not automatically preclude one party from bringing a tort claim against the other. See BohlerUddeholm Am., Inc. v. Ellwood Group, Inc., 247 F.3d 79, 104 (3d Cir. 2001). However, the Pennsylvania Superior Court has emphasized that the gist of the action doctrine "is designed to maintain the conceptual distinction between breach of contract claims and tort claims" by precluding "plaintiffs from re-casting ordinary breach of contract claims into tort claims." eToll, Inc. v. Elias/Savion Adver., Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002). "Tort actions lie for breaches of duties imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals." Id. (quoting Bash v. Bell Tel. Co., 601 A.2d 825, 829 (Pa. Super. Ct. 1992)). Specifically, the doctrine serves to bar tort claims:

1) arising solely from a contract between the parties,

2) where the duties allegedly breached were created and grounded in ...

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