United States District Court, W.D. Pennsylvania
For MICHAEL SHERMAN, Plaintiff: Heather M. Hamilton, Louis B. Loughren, LEAD ATTORNEYS, Loughren, Loughren & Loughren, P. C., Pittsburgh, PA.
For JOHN BROWN INSURANCE AGENCY, INC., JOHN M. BROWN INSURANCE AGENCY, INC., JOHN M. BROWN, ARTURO CORONEL, JR., Defendants: Michael E. Giblin, LEAD ATTORNEY, Swartz Campbell, Pittsburgh, PA.
Maurice B. Cohill, Jr., Senior United States District Judge.
In his Complaint [ECF No. 1-D], Plaintiff Michael Sherman (" Sherman" ) seeks recovery from Arturo Coronel (" Coronel" ), John M. Brown (" Brown" ), and John Brown Insurance Agency, Inc. and John M. Brown Insurance Agency, Inc. (collectively " Agency" ) for damages sustained because of Defendants' negligence and breach of contract in procuring liability insurance to cover Sherman's building contracting operations. Plaintiff alleges negligence against Coronel (Count I), negligence against Brown (Count II), negligence against the Agency (Count III), vicarious liability against the Agency (Count IV), and breach of contract against Brown and the Agency (Count V).
In Response, Defendants filed a Motion to Dismiss [ECF No. 4] Counts I though IV of Plaintiffs Complaint pursuant to Fed. R. Civ. Pro. 12(b)(6) for failure to state a claim upon which relief can be granted. For the reasons set out below, we deny Defendants' Motion to Dismiss with respect to all claims.
I. Relevant Facts Alleged in Plaintiff's Complaint
In May 2011, in need of liability insurance to cover his building contractor operations, Plaintiff searched the internet, where he reviewed an advertisement published by or on behalf of the Agency, which " promoted the agency's expertise in placing coverage for building contractors." [ECFNo. 1-4 at 5]. Plaintiff then teleconferenced with Coronel in May 2011. During this conference, Coronel represented himself to be an employee of the Agency, although he was not a licensed insurance producer under Pennsylvania law [ECF No. 1-4 at 5]. Plaintiff advised Coronel of the nature of his work and his interest in obtaining liability coverage to cover his contracting operations [ECF No. 1-4 at 5]. Coronel advised Plaintiff that the Agency could accommodate his request for liability coverage [ECF No. 1-4 at 5].
Around May 20, 2011 Coronel prepared an application allowing Plaintiff to obtain membership in the Preferred Contractors Association (" PCA" ) [ECF No. 1 -D at 6]. Membership in PCA " presumably" would allow Plaintiff to acquire liability insurance coverage through Preferred Contractors
Insurance Company, RRG, LLC (" PCIC" ) [ECF No. 1-D at 6]. PCJC offered different policies to contractors, some of which included coverage for roofing operations; however, Plaintiff was never offered a policy that included roofing coverage [ECF No. 1-D at 6].
The PCA application was submitted to PCA and/or PCIC by Coronel and Brown containing a description of Plaintiff's contracting operations which allegedly was " incomplete and contrary to the representations that Sherman had made to Coronel regarding the nature of his operations." [ECF No. 1-D at 6]. It is alleged that information available to the Defendants indicated that contractors such as Plaintiff, should be quoted in the " PCIC group program," which included coverage for roofing, instead of the lower coverage " PCA group program," which did not include roofing coverage [ECF No. 1-4 at 6]. Each of these programs would have provided insurance through PCIC, a distinct entity from the " PCIC group program." [ECF No. 1-4 at 6]. Plaintiff, despite needing roofing coverage, was quoted in the " PCA group program," not the " PCIC group program."
The application submitted to PCA contained a signature and initials purported to be Plaintiff's, but the Plaintiff alleges he never signed the application [ECF No. 1-4 at 7]. Furthermore, Plaintiff states he never authorized any of the Defendants to initial or sign the application on his behalf [ECF No. 1-4 at 7]. The application included warranties, which Coronel had not reviewed with Plaintiff [ECF No 1-4 at 7]. These warranties were to be initialed by Sherman, however the initials contained in the application were not those of the applicant, Plaintiff, and as a result were " potentially incompatible" with Plaintiff's operations [ECF No. 1-4 at 7].
On May 20, 2011 or shortly thereafter, Defendants confirmed with Plaintiff that liability coverage had been obtained for his operations, and they requested a premium for the insurance. Plaintiff submitted full payment of $1064.00 to the Agency for the premium but did not receive a copy of the insurance policy until sometime after August 4, 2011 [ECF No. 1-4 at 7]. The policy which was ultimately delivered to Plaintiff contained exclusions that were not referenced in the application for membership with PCA nor discussed between the parties [ECF No. 1-4 at 7].
On May 20, 2011 Plaintiff entered into a contract with JnJ Holdings, LLC to perform renovations at the property located at 94 Estella Avenue, Pittsburgh, Pennsylvania 15211 [ECF No. 1-4 at 7]. On August 4, 2011, Brett Frischolz, an independent contractor, died after falling from scaffolding erected by Plaintiff [ECF No. 1-4 at 8]. Thereafter, the estate of Brett Frischolz commenced an action against Plaintiff, JnJ Holdings, LLC, and the principal of JnJ Holdings, Kirk Williams [ECF No. 1-4 at 8]. PCIC offered a defense to the action on behalf of Plaintiff but commenced a declaratory judgment action on October 22, 2012 alleging Plaintiff's operations were roofing operations and therefore excluded under the PCA Group policy [ECF No. 1-4 at 8].
Plaintiff has retained counsel to defend against the declaratory judgment [ECF No. 1-4 at 8]. Plaintiff alleges that whether or not coverage is found to exist for the August 4, 2011 accident, he has been damaged because of Defendants' conduct and omissions [ECF No. 1-4 at 10]. Because
of the PCIC declaratory judgment action, there is the potential that Plaintiff will not have the appropriate liability coverage to cover the August 4, 2011 accident, and at the very least, Plaintiff has incurred expenses and harm due to Defendants' actions. The harms Plaintiff has sustained include anxiety relating the declaratory judgment, a possible judgment against Plaintiff in the underlying case, time away from his self-employment, and involvement with the PCIC filed cases [ECF No. 1-4 at 10-11].
Additionally, Plaintiff did not have the opportunity to secure appropriate insurance coverage or elect not to participate in certain operations at the 94 Estella Avenue project because of the untimely delivery of the policy to Plaintiff [ECF No. 1-4 at 11]. Plaintiff alleges that his opportunity to resolve the wrongful death suit against him has been lost because PCIC rejected the policy limits demand made by the Frischolz Estate while pursuing the declaratory judgment action [ECF No. 1-4 at 11]. Finally, as a result of Defendants' actions, Plaintiff's personal assets are exposed [ECF No. 1-4 at 11].
II. Standard of Review.
In Thompson v. Real Estate Mortgage Network, 748 F.3d 142, 2014 WL 1317137 (3d Cir. 2014), the Third Circuit Court of Appeals recently stated that in ruling on a Rule 12(b)(6) Motion to Dismiss for failure to state a claim upon which relief can be granted:
Under the " notice pleading" standard embodied in Rule 8 of the Federal Rules of Civil Procedure, a plaintiff must come forward with " a short and plain statement of the claim showing that the pleader is entitled to relief." As explicated in Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), a claimant must state a " plausible" claim for relief, and " [a] claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Although " [f]actual allegations must be enough to raise a right to relief above the speculative level," Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), a plaintiff " need only put forth allegations that raise a reasonable expectation that discovery will reveal evidence of the necessary element." Fowler, 578 F.3d at 213 (quotation marks and citations omitted); see also Covington v. Int'l Ass'n of Approved Basketball Officials, 710 F.3d 114, 117-18 (3d Cir. 2013).
748 F.3d 142, Id. at *2. Further, in ruling on a Rule 12(b)(6) Motion to Dismiss for failure to state a claim upon which relief can be granted, a court must '" accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. 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));
see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563, n.8, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Additionally, where, as here, exhibits are attached to the Complaint by the plaintiff, when deciding a motion to dismiss, courts can consider these exhibits in additional to the allegations contained in the complaint. Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993).
Furthermore, if the court decides to grant a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6), the court must next decide whether leave
to amend the complaint must be granted. As explained in Phillips, " [w]e have instructed that if a complaint is vulnerable to 12(b)(6) dismissal, a district court must permit a curative amendment, unless an amendment would be inequitable or futile."
Phillips, 515 F.3d at 236 (citing Gra ...