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Johnson v. State Farm Mutual Automobile Insurance Co.

United States District Court, Western District of Pennsylvania

February 24, 2015

STACIE L. JOHNSON, et al, Plaintiffs,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Defendant.

MEMORANDUM OPINION ON DEFENDANT'S MOTION TO DISMISS

LISA PUPO LENIHAN UNITED STATES MAGISTRATE JUDGE

I. Summation

For the reasons set forth below, Defendant's Motion to Dismiss (ECF No. 4), in this automobile insurance coverage case filed in the Court of Common Pleas of Allegheny County on March 28, 2014, and removed by Defendant to this Court on July 11, 2014, will be denied. Defendant is not entitled to dismissal of either this action or, in the alternative, Plaintiffs' bad faith claim, on the basis of Plaintiffs' declining to submit to an Examination Under Oath ("EUO") prior to filing suit approximately (a) 20 months after their filing an Underinsured Motorists Claim ("UMC") with their insurer, Defendant State Farm Mutual Automobile Insurance Company ("Defendant" or "State Farm"); (b) eight months after the ongoing provision of significant and uncontroverted record medical evidence to Defendant; and (c) two months after Defendant's request for the EUO of Stacie L. Johnson's ("Plaintiff Wife").

Plaintiffs have maintained the ready availability of Plaintiff Wife for examination/deposition in this action, and have asserted as a basis for their claims that Defendant unreasonably denied (in light of the medical evidence provided and Plaintiff Wife's age/life circumstances and the extent/permanent nature of the injuries incurred as a pedestrian struck by a motor vehicle while jogging; and independent of any additional evidence from an EUO) payment of the full UMC benefits under their policy with Defendant. The law supports Defendant's entitlement to examine Plaintiff Wife under oath (as Plaintiffs do not dispute); the law does not support Defendant's contention that it is entitled to dismissal on grounds of Plaintiff Wife's failure to submit to examination under oath prior to litigation (as opposed to at Defendant's request thereafter) - in circumstances analogous to those herein and where the governing insurance policy includes an insured's duty to provide evidence under oath as Defendant reasonably requires. Nor does it support Defendant's entitlement to dismissal of Plaintiffs' claim of bad faith at this juncture.

The Court will deny Defendant's Motion to Dismiss. It will order that the Defendant timely answer the Complaint, and that Plaintiff Wife be deposed at a mutually agreed upon time and place, prior to a Status Conference or other proceedings before this Court. An Order specifying deadlines will be entered.

II. Factual and Procedural History

Plaintiffs attest that on March 29, 2012, Plaintiff Wife, a 35-year-old woman, was struck by a motor vehicle and injured while jogging. Plaintiffs jointly filed a UMC with their insurer on August 1, 2012. Settlement was approved for the third party claim against the at-fault driver, for the driver's insurance liability limit of $15, 000. In July, 2013, they provided the medical report of Plaintiff s highly-regarded treating physician/surgeon, Dr. James Bradley, indicating that Plaintiff had been permanently and seriously injured; and in December, 2013, they provided additional medical documentation and requested payment of the full UMC benefits available under their policy, i.e. $250, 000. See Plaintiffs' Response to Defendant's Motion to Dismiss ("Plaintiffs' Response"); see also Defendant's Memorandum of Law in Support of Its Motion to Dismiss ("Defendant's Memo in Support").

In mid-January, 2014, Defendant offered $110, 000 to Plaintiff Wife; Plaintiffs' counsel rejected the offer within the week. Both parties regarded the issue at "impasse" and Defendant referred the claim to defense counsel. See Defendant's Memo in Support at 2-3; Plaintiffs Response at 2-3. On January 30, 2014, Defendant tendered Plaintiffs $110, 000 "without prejudice[e]" to their "right to receive a higher amount in the future through continuing negotiation or alternative means of resolution." Defendant's Memo in Support at 3. In February, 2014, Defendant requested Plaintiff Wife's EUO. The policy at issues provides that the insured has a duty to, at Defendant's option, "submit to an Examination Under Oath, provide a Statement Under Oath, or do both as reasonably often as we require". Defendant's Memo in Support at 3 (quoting policy).

Plaintiffs filed this action for underinsured motorist benefits on March 28, 2014 seeking their full policy benefits and damages for bad faith under 42 Pa.C.S.A. Section 8371. Plaintiffs maintain that they advised Defendant that Plaintiff Wife would be, and remains, available for examination/deposition. See Plaintiffs' Response at 1 ("Plaintiffs did not refuse to submit to an examination . . . but rather advised defense counsel that, based upon Defendants conduct, litigation was inevitable [and] that the EUO would be in the form of a deposition .... Defense counsel could have completed that deposition ... but instead chose to file a Motion to Dismiss.").

III. Standard of Review

A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of a complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A complaint must be dismissed for failure to state a claim if it does not allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 556 (2007); Ashcroft v. Iqbal 129 S.Ct.1937, 1949 (May 18, 2009) ("A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."). The Supreme Court further explained:

The plausibility standard is not akin to a "probability requirement, " but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of'entitlement to relief"

Id. (citing Twombly. 550 U.S. at 556-57).

Recently, the United States Court of Appeals for the Third Circuit aptly summarized the standard to be applied in deciding motions to ...


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