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Donahue v. Burns

United States District Court, Third Circuit

May 13, 2013

SAMUEL J. DONAHUE, Plaintiff,
v.
TOM BURNS and STATE FARM FIRE & CASUALTY COMPANY Defendants

MEMORANDUM

JAMES M. MUNLEY, District Judge.

Before the court for disposition is defendants' motion to dismiss and strike pursuant to Federal Rule of Civil Procedure 12. (Doc. 4). For the following reasons, the court will grant in part and deny in part defendants' motion.

Background

This case arises from a dispute over a homeowners insurance policy. On March 13, 2011, Plaintiff Samuel J. Donahue (hereinafter "plaintiff") purchased a renewal of his homeowners insurance policy (hereinafter the "policy") from Defendant Tom Burns (hereinafter "Burns")[1] and Defendant State Farm Fire and Casualty Company (hereinafter "State Farm"). (Doc. 4-1, Am. Compl. (hereinafter "A.C.") § 6).

The policy insured plaintiff's home, located at 207 Central Avenue, Athens, Pennsylvania (hereinafter the "property"), and provided coverage for the dwelling, personal property and loss of use subject to a number of exclusions. (Doc. 9-1, Pl.'s Homeowner's Policy at 1-4). The water damage exclusion is at issue in the instant case, and this exclusion essentially removes from coverage any loss resulting from water or sewage overflow or backup.[2] To circumvent this exclusion, State Farm offered, and plaintiff purchased, a back-up of sewer endorsement on March 13, 2011. (A.C. §§ 6, 10).[3]

On September 8, 2011, a back-up of sewage damaged plaintiff's property. (Id. § 7). Plaintiff filed a claim with State Farm and on October 11, 2011, State Farm mailed a letter to plaintiff denying payment. (Id. § 8). State Farm denied coverage "[b]ecause [plaintiff's] damage was caused by flood waters, which is specifically excluded under the policy...." (Id.)

On December 5, 2012, plaintiff filed a two-count complaint in the Court of Common Pleas of Bradford County. Count I alleges Burns and State Farm (collectively "defendants") breached the insurance contract. Count II claims defendants acted in bad faith by denying coverage.

Defendants removed the case to this court on January 2, 2013. (Doc. 1). Subsequent to removal, defendants filed a motion under Federal Rule of Civil Procedure 12 to dismiss all claims except plaintiff's breach of contract claim against State Farm. In their Rule 12 motion, defendants also seek to strike plaintiff's request for attorney's fees from Count I. The parties then briefed the issues bringing the case to its present posture.

Jurisdiction

The court has jurisdiction pursuant to the diversity statute, 28 U.S.C. § 1332. Plaintiff Samuel J. Donahue is a citizen of Pennsylvania. (A.C. § 2). Defendant State Farm is incorporated under the laws of the State of Illinois with its principal place of business in Illinois. (Id. §§ 2, 13-14). Additionally, the amount in controversy exceeds $75, 000.[4] Because complete diversity of citizenship exists among the parties and the amount in controversy exceeds $75, 000, the court has jurisdiction over the case.[5] See 28 U.S.C. § 1332 ("district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between... citizens of different States[.]"); 28 U.S.C. § 1441 (A defendant can generally remove a state court civil action to federal court if the federal court would have had original jurisdiction to address the matter pursuant to the diversity jurisdiction statute). As a federal court sitting in diversity, the substantive law of Pennsylvania shall apply to the instant case. Chamberlain v. Giampapa , 210 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v. Tompkins , 304 U.S. 64, 78 (1938)).

Standard of Review

The court tests the sufficiency of the complaint's allegations when considering a Rule 12(b)(6) motion. All well-pleaded allegations of the complaint must be viewed as true and in the light most favorable to the non-movant to determine whether, "under any reasonable reading of the pleadings, the plaintiff may be entitled to relief.'" Colburn v. Upper Darby Twp. , 838 F.2d 663, 665-66 (3d Cir. 1988) (quoting Estate of Bailey by Oare v. Cnty. of York , 768 F.2d 503, 506 (3d Cir. 1985)). The plaintiff must describe "enough facts to raise a reasonable expectation that discovery will reveal evidence of' [each] necessary element" of the claims alleged in the complaint. Phillips v. Cnty. of Allegheny , 515 F.3d 224, 234 (3d Cir. 2008) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556 (2007)). Moreover, the plaintiff must allege facts that "justify moving the case beyond the pleadings to the next stage of litigation." Id. at 234-35. In evaluating the sufficiency of a complaint the court may also consider "matters of public record, orders, exhibits attached to the complaint and items appearing in the record of the case." Oshiver v. Levin, Fishbein, Sedran & Berman , 38 F.3d 1380, 1384 n.2 (3d Cir. 1994) (citations omitted). The court does not have to accept legal conclusions or unwarranted factual inferences. See Curay-Cramer v. Ursuline Acad. of Wilmington, Del., Inc. , 450 F.3d 130, 133 (3d Cir. 2006) (citing Morse v. Lower Merion Sch. Dist. , 132 F.3d 902, 906 (3d Cir. 1997)).

The federal rules require only that plaintiff provide "a short and plain statement of the claim showing that the pleader is entitled to relief, " a standard which "does not require detailed factual allegations, " but a plaintiff must make "a showing, rather than a blanket assertion, of entitlement to relief that rises above the speculative level." McTernan v. N.Y.C., 564 F.3d 636, 646 (3d Cir. 2009) (citations and internal quotations and quotation marks omitted). 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). Such "facial plausibility" exists "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id . (citing Twombly , 550 U.S. at 556). "[T]he factual detail in a complaint [cannot be] so undeveloped that it does not provide a defendant the type of notice of claim which is contemplated by Rule 8." Phillips , 515 F.3d at 232 (citation omitted). "Though a complaint does not need detailed factual allegations, ... a formulaic recitation of the elements of a cause of action will not do.'" DelRio-Mocci v. Connolly Props., Inc. , 672 F.3d 241, 245 (3d Cir. 2012) (quoting Twombly , 550 U.S. at 555).

The Supreme Court has counseled that a court examining a motion to dismiss should, "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Iqbal , 556 U.S. at 679. Next, the court should make a context-specific inquiry into the "factual allegations in [the] ...


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