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Steven J. Inc. v. Landmark American Insurance Co.

United States District Court, Middle District of Pennsylvania

August 4, 2014

STEVEN J., INC., for itself and for and to the use of David Fenton, Plaintiff

Conner Chief Judge


Martin C. Carlson United States Magistrate Judge


The above-captioned action, which arises under the Court’s diversity jurisdiction, involves an insurance coverage dispute between an insured, his insurance company, and an independent claims adjuster, who examined a policy claim brought by the plaintiff for storm damage, and found that the claim entailed pre-existing conditions on the insured premises prior to the storm. In this factual scenario, we are asked to consider whether the actions of the claim adjuster constituted a tortious interference with the contractual relationship between the insured and the insurance company.

Finding that these actions by the claims adjuster do not rise to the level of tortious interference with this insurance contract since the adjuster’s “job was to investigate and report to [the insurance company] on the cause of loss”, Council Tower Ass'n v. Axis Specialty Ins. Co., 630 F.3d 725, 731 (8th Cir. 2011), we conclude that a claim of tortious interference with a contractual relationship does not lie here, and recommend dismissal of this claim.

II. Statement of Facts and of the Case

The well-pleaded facts in this case can be simply stated: The plaintiff was a lessee who held an option to purchase a property in Monroe County, Pennsylvania. (Doc. 18, ¶4.) This real estate was insured through the defendant, Landmark American Insurance Company. (Id., ¶5.) The policy listed the plaintiff, Steven J., Inc., as a lienholder on this insurance policy.

According to Steven J., in October 2012, the property was heavily damaged in a storm. (Id., ¶7.) Steven J., submitted a loss claim on the property to Landmark, and Landmark engaged Engle Martin & Associates to review this claim. (Id., ¶¶ 8-10.) Steven J., then alleges that the claim was wrongfully denied by Landmark on the basis of an report by Engle Martin, the claims adjuster, which incorrectly concluded that the claim on the insured property involved pre-existing damage that had not been caused by the storm. (Id., ¶¶10-15.) Alleging that the claims adjuster’s report was wrongfully withheld from the plaintiff, and reached an outrageously erroneous conclusion, Steven J., filed this lawsuit leveling two claims and causes of action. First, with respect to landmark, Steven J., asserts that the defendant’s failure to pay this claim constitutes a breach of this insurance contract in which Steven J., has a beneficial interest as a lienholder on the insured property. (Id., ¶¶16-27.) The amended complaint goes on in Count II to allege that Engle Martin, the claims adjuster, tortiously interfered with this insurance contract by investigating the claim and submitting its report to Landmark, stating that the investigation indicated that the claim entailed pre-exiting damage to the insured premises, a finding that Steven J., discounts as outrageous.

Engle Martin has now moved to dismiss this tortious interference with contract claim, (Doc. 24.) arguing that the complaint fails to state a claim upon which relief may be granted. This motion is fully briefed by the parties, (Docs. 25, 27, [1] and 28.), and is, therefore, ripe for resolution. For the reasons set forth below it is recommended that the motion to dismiss be granted, and the tortious interference with contract claim against Engle Martin be dismissed.

III. Discussion

A. Motion to Dismiss–Standard of Review

A motion to dismiss is designed to test the legal sufficiency of a complaint. Thus, Rule 12(b)(6) of the Federal Rule of Civil Procedure provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated, Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005), and dismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead “enough facts to state a claim to relief that is plausible on its face, ” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) (abrogating “no set of facts” language found in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). The facts alleged must be sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. 544, 555. This requirement “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence” of necessary elements of the plaintiff’s cause of action. Id. at 556. Furthermore, in order to satisfy federal pleading requirements, the plaintiff must “provide the grounds of his entitlement to relief, ” which “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (brackets and quotation marks omitted) (quoting Twombly, 550 U.S. at 555). Thus, “[a]t the motion to dismiss stage, we accept as true all factual assertions, but we disregard threadbare recitals of the elements of a cause of action, legal conclusions, and conclusory statements. See Iqbal, 556 U.S. at 678–79, 129 S.Ct. 1937; Twombly, 550 U.S. at 555–57, 127 S.Ct. 1955; Burtch, 662 F.3d at 220–21.” James v. City of Wilkes-Barre, 700 F.3d 675, 681 (3d Cir. 2012). As the court of appeals has observed: “The Supreme Court in Twombly set forth the ‘plausibility’ standard for overcoming a motion to dismiss and refined this approach in Iqbal. The plausibility standard requires the complaint to allege ‘enough facts to state a claim to relief that is plausible on its face.’ Twombly, 550 U.S. at 570, 127 S.Ct. 1955. A complaint satisfies the plausibility standard when the factual pleadings ‘allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). This standard requires showing ‘more than a sheer possibility that a defendant has acted unlawfully.’ Id. A complaint which pleads facts ‘merely consistent with’ a defendant's liability, [ ] ‘stops short of the line between possibility and plausibility of “entitlement of relief.” ’ ” Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220-21 (3d Cir. 2011) cert. denied, 132 S.Ct. 1861, 182 L.Ed.2d 644 (U.S. 2012).

Thus, in assessing a motion to dismiss the court engages in a three-step analysis: “First, the court must ‘tak[e] note of the elements a plaintiff must plead to state a claim.’ Iqbal, 129 S.Ct. at 1947. Second, the court should identify allegations that, ‘because they are no more than conclusions, are not entitled to the assumption of truth.’ Id. at 1950. Finally, ‘where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.’ Id.” Santiago v. Warminster Tp., 629 F.3d 121, 130 (3d Cir. 2010).

In undertaking this task, the court generally relies only on the complaint, attached exhibits, and matters of public record. Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007). The court may also consider “undisputedly authentic document[s] that a defendant attached as an exhibit to a motion to dismiss if the plaintiff’s claims are based on the [attached] documents.” Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Moreover, “documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered.” Pryor v. Nat’l Collegiate Athletic Ass’n, 288 F.3d 548, 560 (3d Cir. 2002); see also, U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 382, 388 (3d Cir. 2002) (holding that “[a]lthough a district court may not consider matters extraneous to the pleadings, a document integral to or explicitly relied upon in the complaint may be considered ...

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