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TNT Services Corporation, LLC v. Houston International Insurance Group

United States District Court, M.D. Pennsylvania

June 9, 2017

TNT SERVICES CORPORATION, LLC, Plaintiff
v.
HOUSTON INTERNATIONAL INSURANCE GROUP and IMPERIUM INSURANCE GROUP, Defendants

          MEMORANDUM

          JAMES M. MUNLEY United States District Judge.

         Before the court for disposition is the motion to dismiss plaintiff's amended complaint filed by Defendants Houston International Insurance Group and Imperium Insurance Group (hereinafter “defendants”). The motion has been briefed and is ripe for disposition.

         Background

         Defendant Houston International Insurance Group by and through its subsidiary Imperium Insurance Group issued a worker's compensation and employer's liability insurance policy (hereinafter “policy”) to Plaintiff TNT for a policy period of September 19, 2013 through September 19, 2014. (Doc. 15, Am. Compl. at 1). TNT engaged a financing company, First Funding Corporation to pay its premium on the policy. (Id.) Defendants have refused to pay two workers compensation claims made by plaintiff's employees. (Id. at 2). Plaintiff asserts that the policy covers these claims, and defendants have acted in bad faith in failing to pay the benefits. (Id.) Thus, plaintiff filed a three-count amended complaint asserting: Count I, Bad Faith; Count II, Breach of Contract; Count III, Declaratory Judgment -Coverage. (Doc. 15). Defendants have moved to dismiss the amended complaint, bringing the case to its present posture.

         Jurisdiction

         This Court has jurisdiction pursuant to the diversity jurisdiction statute, 28 U.S.C. § 1332. The plaintiff is a Pennsylvania corporation with a principal place of business in Montrose, Pennsylvania, and the defendants are Texas corporations with principal places of business in Houston, Texas. (Doc. 15, Am. Compl. ¶¶ 1-3). Because we are 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. Tompkins, 304 U.S. 64, 78 (1938)).

         Legal Standard

         Before the court is the defendants' motion to dismiss plaintiff's amended complaint 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. Cty. 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.

         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 re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997); Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993).

         Discussion

         Defendant's motion to dismiss each of the three counts in the amended complaint. We will address each in turn, beginning with Count I - Bad Faith.

         I. Bad Faith

         The first count of plaintiff's amended complaint asserts a bad faith claim pursuant to 40 Pa. Cons. Stat. § 8371. (Doc. 15, Am. Compl. ¶¶ 34-52). Plaintiff asserts many examples of defendants' bad faith conduct including, inter alia: failing to provide contracted for coverage; engaging in dilatory and abusive claims handling; failing to adopt or implement reasonable standards in evaluating plaintiff's claims; and misrepresenting the benefits, advantages, conditions or terms of the policy. (Id. ¶ 42).

         Section 8371 authorizes recovery for an insurance company's bad faith towards an insured. It provides for several remedies upon a finding of bad faith: (1) an award of “interest on the amount of the claim” at a rate equal to “the prime rate of interest plus 3%”; (2) an award of “punitive damages against the insurer” and/or (3) an assessment ...


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