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Bailey v. State Farm Mutual Automobile Insurance Co.

United States District Court, W.D. Pennsylvania

April 14, 2015

MARK BAILEY, Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE, INSURANCE COMPANY, Defendant.

REPORT AND RECOMMENDATION

ROBERT C. MITCHELL, Magistrate Judge.

I. RECOMMENDATION

This case was removed to this Court on January 5, 2015. Plaintiff, Mark Bailey, brought the present action against State Farm Mutual Automobile Insurance Company ("State Farm") for failure to pay Plaintiff benefits from an insurance policy. On February 5, 2015, State Farm filed a motion to dismiss Plaintiff's complaint for failure to state a claim. Def.'s Mot. to Dismiss [ECF No. 6]. Plaintiff responded thereto on March 6, 2015 [ECF Nos. 9, 10] and State Farm filed its reply on March 20, 2015. [ECF No. 11]. Therefore, the motion is fully briefed and ripe for disposition. For the following reasons, it is respectfully recommended that State Farm's motion to dismiss [ECF No. 6] be granted and Plaintiff's complaint be dismissed with prejudice.

II. REPORT

a. Background

In November, 2012, Plaintiff was critically and permanently injured in a motor vehicle collision while he was an occupant of a third party's vehicle. At the time of the accident, Plaintiff was a named insured on a motor vehicle policy with Titan Insurance, a division of Nationwide, which was in full force and effect. The Titan policy did not cover extraordinary medical benefits. Plaintiff resided with his mother, Karen Bailey, at the time of the accident who was the named insured on a motor vehicle insurance policy issued by Defendant, State Farm. Because Plaintiff lived with his mother at the time of the accident, he was deemed an "insured" under his mother's policy, but was not considered a "named insured." Plaintiff's Titan insurance policy provided $5, 000 in first party medical benefits. The State Farm policy provided $5, 000 in first party medical benefits and $1, 000, 000 for extraordinary medical benefits or "Q" coverage.

After the accident, Plaintiff submitted a first party benefits claim under the State Farm policy. State Farm provided medical payments in the amount of $5, 000. Upon discovery of the Titan policy, Titan reimbursed State Farm $5, 000 for the previously paid medical benefits, as the Titan policy was of higher priority under 75 Pa.C.S.A. ยง 1713. Thereafter, because Plaintiff's medical expenses were in excess of the $100, 000 threshold required to claim extraordinary medical benefits, Plaintiff made a claim for extraordinary medical benefits under his mother's State Farm policy. State Farm denied Plaintiff's claim for extraordinary medical benefits.

Plaintiff thereafter brought the present action against State Farm claiming breach of contract and bad faith for the failure to pay extraordinary medical benefits. State Farm filed the instant motion to dismiss arguing that it properly denied extraordinary medical benefits coverage under his mother's policy. State Farm argues that Plaintiff's complaint should be dismissed with prejudice because under the Pennsylvania Motor Vehicle Financial Responsibility Law ("MVFRL") and case law interpreting the MVFRL, an insured is limited to recover only those benefits available from the highest priority level if the policies are of unequal priority levels. With this framework, State Farm argues that Plaintiff may only recover under his Titan policy which is deemed a higher priority policy than his mother's State Farm policy.

Plaintiff responds that his complaint should not be dismissed as a matter of law because the MVFRL does not preclude combining the limits of coverage of medical benefits and extraordinary medical benefits on multiple insurance policies and cites Buddock v. Cincinnati Ins. Co., 1996-cv-5219 (Oct. 2, 1998 Cm. Pleas Northampton Cnty.)[1] in support of this argument.

For the reasons that follow, it is respectfully recommended that State Farm's motion to dismiss be granted and Plaintiff's complaint be dismissed with prejudice.

b. Standard of Review

To survive dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The reviewing court must "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). Dismissal under Federal Rule of Civil Procedure 12(b)(6) is proper where the factual allegations of the complaint conceivably fail to raise, directly or inferentially, the material elements necessary to obtain relief under a legal theory of recovery. Twombly, 550 U.S. at 561 (citations omitted). Thus, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (2009) (citing Twombly, 550 U.S. at 555). Under this standard, civil complaints "must contain more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (internal quotations omitted). A court in making this determination must ask "not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claim." Twombly, 550 U.S. at 583 (quoting Scheuer v. Rhoads, 416 U.S. 232, 236 (1974) (internal quotations omitted)).

In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a court may take into consideration "the allegations contained in the complaint, exhibits attached to the complaint and matters of public record." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). Although a district court may not generally consider matters extraneous to pleadings when ruling on a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), it may consider documents integral to or explicitly relied upon in a complaint without converting the motion to dismiss into a motion for summary judgment. West Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 97 (3d Cir. 2010); In re Burlington Coat Factory ...


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