United States District Court, E.D. Pennsylvania
a diversity insurance contract action brought by Michael Long
against Farmers New Century Insurance Company alleging breach
of contract and bad faith. Mr. Long had filed the complaint
in the Court of Common Pleas of Berks County, and Farmers
removed the action here due to the diversity of citizenship
of the parties. Farmers filed a motion for judgment on the
pleadings, and Mr. Long responded. Farmers argues that it is
entitled to judgment as a matter of law because Mr.
Long's action is untimely, and because his claim for bad
faith fails to state a claim upon which relief can be
granted. For the following reasons, I will grant the motion
in its entirety, and enter judgment on behalf of Farmers and
against Mr. Long.
to Federal Rule of Civil Procedure 12(c), judgment on the
pleadings will be granted only if the movant clearly
establishes that there are no material issues of fact, and
that it is entitled to judgment as a matter of law.
Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 220
(3d Cir. 2005). A party may move for judgment on the
pleadings after the pleadings are closed, but early enough
not to delay trial. Id. (quoting Fed.R.Civ.P.
12(c)). In deciding a motion for judgment on the pleadings, a
court considers the pleadings and exhibits attached thereto,
matters of public record, and “undisputedly authentic
documents attached to the motion for judgment on the
pleadings if plaintiff's claims are based on the
documents.” Id. Rule 12(c) motions are
reviewed under the same standard that applies to motions to
dismiss for failure to state a claim pursuant to Rule
12(b)(6). Turbe v. Gov't of Virgin Islands, 938
F.2d 427, 428 (3d Cir. 1991).
a motion for judgment on the pleadings will be granted if a
plaintiff has not articulated enough facts “to raise a
right to relief above the speculative level.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). It is
not enough for a plaintiff to allege mere “labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Id. Plaintiffs
must plead “factual content that allows the court to
draw the reasonable inference that the defendant is liable
for misconduct alleged.” Ashcroft v. Iqbal,
556 U.S. 662, 663 (2009). The court “may disregard any
legal conclusions.” Fowler v. UPMC Shadyside,
578 F.3d 203, 210-11 (3d Cir. 2009); see also Iqbal,
556 U.S. at 678 (Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
the complaint alleges that Farmers issued an insurance policy
on a residence owned by Mr. Jones at 1419 Fairview Street in
Reading, Pennsylvania. The policy contains the following suit
limitation clause: “Suit Against Us: No action can be
brought unless the policy provisions have been complied with
and the action is started within one year after the date of
loss.” See Compl. ¶ 28. The policy
further requires that notice of a loss and a claim for
benefits be given to Farmers promptly.
policy also contains the following appraisal clause:
Appraisal: If you and we fail to agree on the amount of the
loss, either may demand an appraisal of the loss. In this
event, each party will choose a competent appraiser within 20
days after receiving a written request from the other. The
two appraisers will choose an umpire. If they cannot agree
upon an umpire within 15 days, you or we may request that the
choice be made by a judge of a court of record in the state
where the “residence premises” is located. The
appraisers will separately set the amount of loss. If the
appraisers submit a written report of an agreement to us, the
amount agreed upon will be the amount of loss. If they fail
to agree, they will submit their differences to the umpire. A
decision agreed to by any two will set the amount of loss.
22, 2014, Mr. Long's property suffered damage during a
hail storm. On May 21, 2015, one year later, Mr. Long's
representative public adjuster Total Public Adjusting, on
behalf of Mr. Long, notified Farmers of the damage to his
property and made a claim for insurance benefits. The next
day, the one-year anniversary of the loss, Farmers
acknowledged receipt of Mr. Long's claim, and in that
same letter, stated its position that Mr. Long failed
promptly to make a claim for the loss, and reminded him that
any suit against Farmers must be filed within one year of the
date of the loss. This May 22, 2015 letter also reiterated
that Farmers was not waiving any of the terms, conditions, or
provisions of the policy. Farmers determined that the damage
was covered under the policy, and issued a payment on June 5,
Long believed that Farmers had not fully and fairly
compensated him for his loss. In September 2015, Mr.
Long's public adjuster submitted a demand that Farmers
participate in an appraisal of the claim under the policy.
The first demand for appraisal was withdrawn, but was
reinstated two weeks later. Fifteen months after the loss was
incurred and two months after Farmers had paid Mr. Long for
the loss, Farmers declined to engage in the appraisal. Mr.
Long filed this complaint on November 23, 2015, eighteen
months after the date of loss.
Count I of the complaint, Mr. Long alleges that Farmers
breached the insurance contract by not providing the coverage
for his full loss as required under the policy and by not
agreeing to participate in the appraisal. Farmers counters
that the action was not timely filed under the terms of the
policy and that Mr. Long has failed to establish any basis
for waiver or estoppel against Farmers' assertion of the
defense of the one-year suit limitation.
interpretation of an insurance policy is a question of law.
Erie Insurance Exchange v. Baker, 972 A.2d 507, 511
(Pa. 2009). When interpreting an insurance policy, a court
must ascertain the intent of the parties as manifested by the
language of the written agreement. Id. When the
policy's language is clear and unambiguous, the court
must give effect to the language of the contract.
Long's policy contains a clear and unambiguous one-year
limitation on filing suits against Farmers after the loss or
damage occurs. The Commonwealth of Pennsylvania has mandated
that all fire insurance policies issued contain such a
one-year suit limitation clause. See 40 P.S. §
636(2). Such limitation clauses are valid and enforceable.
Prime Medica Associates v. Valley Forge Ins. Co.,
970 A.2d 1149, 1156 (Pa.Super. 2009). The validity of the
one-year limitation of suit provision in fire insurance
policies has been consistently upheld by courts.
Schreiber v. PA Lumberman's Mutual Ins.
Co., 444 A.2d 647, 649 (Pa. 1982)(the statutory
requirement represents a legislative determination of a
reasonable period within which suits must be brought, a
careful balancing of the interests of both insurers and
insureds); General State Authority v. Planet Ins.
Co., 346 A.2d 265, 267 (Pa. 1975)(the law is clear that
such a clause, setting time limits on the commencement of
suits to recovery on a policy, is valid and will be
sustained). Here, the policy was bound by that same statutory
requirement to include the suit limitation clause. See
Lyons v. Nationwide Ins. Co., 567 A.2d 1100, 1102
(Pa.Super. 1989)(noting that the types of insurance policies
required to include the clause mandated by § 636 include
policies on houses and other buildings insuring
“against loss or damage, including loss of use or
occupancy, by fire, smoke, smudge, lightning, and explosion,
whether fire ensue or not, and by tornadoes, cyclones,
windstorms; earthquakes, hail, frost, sleet, snow,
or flood”) (quoting 40 Pa. P.S. § 382(b)(1))
insurer might waive the suit limitation defense, or else it
may be estopped from relying on it. “Waiver is the
voluntary and intentional abandonment or relinquishment of a
known right.” Prime Medica, 970 A.2d at 1156.
Waiver arises either by express declaration or else by
conduct so inconsistent with the defense that there is no
reasonable ground to infer that the insurer relies on the
suit limitation defense. Id. at 1156-1157. An
insurer will be estopped from raising the suit limitation
defense if there is clear and convincing evidence that the
insurer induced the insured to justifiably rely, to the
insured's detriment, on the insurer's words or
conduct reflecting a decision not to invoke the defense.
Id. at 1157.
other hand, if an insurer invokes the suit limitation clause
and does not lull the insured into thinking it will not rely
on the clause, the one-year limitation on suits is
enforceable. General State Authority, 346 A.2d at
268 (affirming the entry of judgment on the pleadings where
the insurer did ...