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Shaffer v. State Farm Mutual Automobile Insurance Co.

United States District Court, Third Circuit

October 15, 2013



SYLVIA H. RAMBO, District Judge.

Presently before the court is Defendant State Farm Mutual Insurance Company's ("State Farm") motion to dismiss Count II of the complaint. (Doc. 3.) For the reasons set forth below, the motion will be denied.

I. Background

A. Facts

This case arises from State Farm's alleged bad faith handling of an underinsured motorist ("UIM") claim submitted by Plaintiffs. On September 5, 2008, Plaintiff Barry Shaffer was involved in a motor vehicle accident in the Middle District of Pennsylvania, wherein the tortfeasor made an illegal passing maneuver resulting in a violent head-on collision with the Shaffer's 2003 Toyota Sienna. (Compl. ¶¶ 7-12.) Plaintiff Barry Shaffer claims that, as a result of the accident, he sustained painful and severe injuries, including injuries to his neck, head and back, as well as several contusions and general shock to his body and nervous system. ( Id. ¶ 26.) Due to the nature of his injuries, he was forced to incur costs for medical treatment, therapy, and similar miscellaneous expenses in an effort to restore himself to good health. ( Id. ¶ 28.) In addition, he claims he has experienced physical and mental suffering, inconvenience in carrying out his daily activities, and loss of life's pleasures and enjoyment. ( Id. ¶¶ 29, 31.) He continues to endure persistent pain and limitations and avers that his injuries may be permanent in nature, resulting in residual problems for the remainder of his lifetime. ( Id. ¶ 30.) Plaintiff further claims that he has lost income from his inability to work and has experienced a permanent diminution of his earning power and capacity. ( Id. ¶ 32.)

At the time of the accident, Plaintiffs were insured by State Farm under policy number 23 2135 C15 38F, which provided underinsured motorist benefits of $100, 000 per person and allowed for stacking of the coverage totaling $200, 000 on the policy. ( Id. ¶ 6.) On April 25, 2011, State Farm consented to a third-party settlement and waived its subrogation interest. ( Id. ¶ 13.) Plaintiffs claim that the vehicle operated by the tortfeasor was underinsured ( Id. ¶ 14) and thus, Plaintiffs submitted a UIM claim pursuant to their policy[1] ( Id. ¶ 14).

According to Plaintiffs, after opening the UIM claim, the Shaffers unilaterally provided State Farm with all of Barry Shaffer's accident-related medical records and reports as well as a vocational report. ( Id. ¶¶ 16, 18.) On March 12, 2012, Plaintiffs submitted a demand to State Farm requesting settlement in the amount of $150, 000, an amount less than the available underinsured motorist limits of $200, 000. ( Id. ¶ 17.) Thereafter, State Farm requested, and Plaintiffs provided, authorizations to obtain medical records ( Id. ¶ 19) and a statement under oath from Plaintiff Barry Shaffer, which took place on June 12, 2012 ( Id. ¶ 20).

Plaintiffs claim that the parties have been unable to reach an amicable resolution of the UIM claim. ( Id. ¶ 22.) In fact, Plaintiffs assert that "State Farm has never made an offer of settlement." ( Id. ¶ 21 (emphasis in original).) Consequently, and in accordance with State Farm's UIM endorsement, Plaintiffs filed this action alleging that State Farm has breached its contractual obligations to Plaintiffs and has acted in bad faith, which is actionable under 42 Pa. Cons. Stat. § 8371.[2] ( Id. ¶ 22.) Plaintiffs seek compensatory damages for State Farm's breach of contract and punitive damages, interest, and attorney's fees for State Farm's bad faith actions.

B. Procedural History

This case was originally filed in the Dauphin County Court of Common Pleas on May 31, 2013, but was removed to this court by State Farm on July 3, 2013. (Doc. 1.) On July 10, 2013, State Farm filed the instant motion to dismiss for failure to state a claim, challenging only Plaintiff's bad faith claim.[2] (Doc. 3.) State Farm thereafter filed a brief in support of the motion on July 24, 2013 (Doc. 6), and on August 7, 2013, Plaintiff filed a brief in opposition to the motion. (Doc. 8.) The two-week period for a reply brief has expired and thus the motion is ripe for disposition.

II. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). Dismissal is appropriate if, accepting as true all of the complaint's well-pleaded facts, a plaintiff has failed to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The court may only consider the facts alleged in the complaint, exhibits attached thereto, matters of public record, and documents that form the basis of the claim. Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993); see also Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007). The court must view all of the allegations and facts in the complaint in the light most favorable to the plaintiff, and it must grant the plaintiff the benefit of all reasonable inferences. Kanter v. Barella, 489 F.3d 170, 177 (3d Cir. 2007). The court, however, "need not credit a complaint's bald assertions' or legal conclusions.'" Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d. Cir. 1997) (citations omitted).

In deciding the motion, the court should not inquire whether the plaintiff ultimately will prevail on the merits; rather, the court's role is limited to determining if the plaintiff's factual allegations are sufficient "to raise a reasonable expectation that discovery will reveal evidence of" the necessary elements of the claim. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556); see also Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir. 2000). While the 12(b)(6) standard does not require "detailed factual allegations, " there must be a "showing, ' rather than a blanket assertion of entitlement to relief." Phillips, 515 F.3d at 231-32 (quoting Twombly, 550 U.S. at 555). Put another way, the complaint must provide "sufficient factual matter' to show that the claim is facially plausible, " Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009), in order to "justify moving the case beyond the pleadings to the next stage of litigation." Phillips, 515 F.3d at 234-35.

In Santiago v. Warminster Twp., 629 F.3d 121, 129 (3d Cir. 2010), the Third Circuit set forth a three-part inquiry that a court in this Circuit must conduct when presented with a 12(b)(6) motion to dismiss. First, the court must identify the elements of the claim. See Malieus v. George, 641 F.3d 560, 563 (3d Cir. 2011). Next, the court should "review the complaint to strike conclusory allegations." Id. Lastly, the court should "[look] at the well-pleaded components of the ...

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