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American Automobile Insurance Co. v. L.H. Reed & Sons, Inc.

United States District Court, M.D. Pennsylvania

April 8, 2015

L.H. REED & SONS, INC., Defendant.


JAMES M. MUNLEY, District Judge.

Before the court for disposition is Defendant L.H. Reed & Sons, Inc.'s motion to dismiss plaintiff's complaint. The motion has been fully briefed and is ripe for disposition.


Defendant L.H. Reed & Sons, Inc. is a corporation in the business of the installation, maintenance and repair of HVAC (Heating, Ventilation and Air Conditioning) systems and such systems' piping and equipment. (Doc. 1, Compl. ¶ 2). Plaintiff American Automobile Insurance Company as subrogee of Settler's Inn, Ltd. (hereinafter "Settler's Inn")[1] owns property known as Ledge's Hotel in Hawley, Pennsylvania. (Id. ¶ 5). American Automobile Insurance Company insured the property. (Id.) Settler's Inn contracted with defendant to design, install, repair and maintain the HVAC system at Ledge's Hotel. (Id. ¶ 8).

Plaintiff alleges that due to the manner in which pipes were installed on the roof of the premises for the HVAC system, snow sliding down the roof allowed the pipes to dislodge, break and cause a fire. (Id. ¶ 17). The fire activated the sprinkler systems, which flooded multiple rooms and suites at the hotel. (Id. ¶ 18). The fire and water caused substantial damage and destruction to the real and personal property of Settler's Inn. (Id. ¶ 21). The instant lawsuit ensued wherein the Settler's Inns subrogee sues Reed for the following: Count I-Negligence; Count II-Breach of Warranty; and Count III-Breach of Contract.

Defendant then filed the instant motion to dismiss. The parties have briefed their respective positions and the matter is ripe for disposition.


The court has jurisdiction pursuant to the diversity statute, 28 U.S.C. § 1332. American Automobile Insurance Company a/s/o Settler's Inn, Ltd. is a corporation organized and existing pursuant to the laws of the State of Missouri with its principal place of business in Novato, California. (Doc. 1, Compl. ¶ 1). Defendant L.H. Reed & Sons, Inc. is a closed corporation organized and existing under the laws of the Commonwealth of Pennsylvania with its principal place of business located in Honesdale, Pennsylvania. (Id. ¶ 2). Additionally, the amount in controversy exceeds $75, 000. (Id. ¶ 3).

Because complete diversity of citizenship exists among the parties and the amount in controversy exceeds $75, 000, the court has jurisdiction over this case. 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. 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. Tomkins, 304 U.S. 64, 78 (1938)).

Legal Standard

This case is before the court pursuant to defendant's motion to dismiss for failure to state a claim upon which relief can be granted filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. When a 12(b)(6) motion is filed, the sufficiency of the allegations in the complaint is tested. Granting the motion is appropriate if, accepting as true all the facts alleged in the complaint, the plaintiff has not pleaded "enough facts to state a claim to relief that is plausible on its face, " or put another way, "nudged [his or her] claims across the line from conceivable to plausible." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The Third Circuit interprets Twombly to require the plaintiff to 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. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556). 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 relation to Federal Rule of Civil Procedure 8(a)(2), the complaint need only provide "a short and plain statement of the claim showing that the pleader is entitled to relief, ' in order to give the defendant fair notice of what the... claim is and the grounds upon which it rests, '" Twombly, 550 U.S. at 555 (citation omitted). "[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). "Rule 8(a)(2) requires a showing' rather than a blanket assertion of an entitlement to relief." Id.

The issue is whether the facts alleged in the complaint, if true, support a claim upon which relief can be granted. In deciding a 12(b)(6) motion, the court must accept as true all factual allegations in the complaint and give the pleader the benefit of all reasonable inferences that can fairly be drawn therefrom, and view them in the light most favorable to the plaintiff. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997). To decide a motion to dismiss, a court generally should consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim. See In ...

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