United States District Court, E.D. Pennsylvania
ROBERT W. TONER, Plaintiff,
GEICO INSURANCE COMPANY, Defendant.
case originates from an underinsured motorist claim submitted
after a motorcycle accident. Plaintiff Robert W. Toner brings
this suit against his own insurer, Defendant GEICO Insurance
Company, alleging breach of contract and bad faith.
Count I of the Complaint, Plaintiff alleges breach of
contract because Defendant has not offered to pay his
underinsured motorist claim. In Count II, Plaintiff alleges
that Defendant acted in bad faith, in violation of 42 Pa.
Cons. Stat. Ann. § 8371, by engaging in a variety of
abusive claim handling practices. In response, Defendant has
filed a Motion to Dismiss the Complaint in its entirety,
which is now ripe for disposition.
Robert W. Toner is the son of Robert and Diann Toner (the
“Toners”), who live in Huntingdon Valley,
Pennsylvania. (Doc. No. 4-1 at ¶ 1.) Defendant GEICO
Insurance Company (“GEICO”) is a corporation that
issues insurance policies in Pennsylvania. It has its
principal place of business in Fredericksburg, Virginia.
(Id. at ¶ 2.) Plaintiff's parents purchased
automobile insurance from Defendant. (Id. at ¶
3.) The policy issued was effective from November 13, 2014
through May 13, 2015 and insured three vehicles: a 2008
Lexus, a 2006 BMW, and a 2015 GMC Sierra. (Id. at
¶ 4.) The underinsured motorist coverage under the
policy was $300, 000, and this coverage stacked for all three
vehicles, resulting in a total coverage of $900, 000.
(Id.) Plaintiff alleges that he was insured under
the GEICO policy because he was a member of the Toners'
Huntingdon Valley household. (Id. at ¶ 3.)
March 25, 2015, during the life of the policy, Plaintiff was
operating a motorcycle in Palm Beach County, Florida.
(Id. at ¶ 5.) He was driving westbound on Carol
Avenue near the intersection of South Congress Avenue.
(Id.) At the same time, Giovanni Aguilar was
operating an automobile eastbound on Carol Avenue.
(Id.) At the intersection, Aguilar attempted to make
a left turn from Carol Avenue onto South Congress Avenue.
(Id.) Aguilar cut across Plaintiff's lane of
traffic and collided with Plaintiff. (Id.)
result of the collision, Plaintiff sustained severe injuries,
including head injuries and damage to his nervous system.
(Id. at ¶ 11.) The injuries have restricted
Plaintiff's ability to perform the usual tasks of daily
life. (Id.) Plaintiff's medical expenses have
exceeded $3, 000, 000. (Doc. No. 5 at 2.) Aguilar was cited
for his failure to yield at the intersection, and the
accident occurred solely due to his negligence. (Doc. No. 4-1
at ¶ 6.) Plaintiff recovered $12, 000 under
Aguilar's insurance policy. (Id. at ¶ 17.)
the accident, Plaintiff submitted an underinsured motorist
claim to Defendant seeking the maximum stacked coverage
amount of $900, 000. (Id. at ¶¶ 21-22.) To
date, Defendant has not paid Plaintiff in connection with his
underinsured motorist claim. (Id. at ¶ 23.)
January 16, 2017, Plaintiff initiated this action against
Defendant in the Montgomery County Court of Common Pleas.
(Id.) On January 31, 2017, Defendant removed the
action to this Court on the basis of diversity of citizenship
jurisdiction. (Doc. No. 1.) On February 8, 2017,
Defendant filed a Motion to Dismiss. (Doc. No. 3.) Plaintiff
subsequently filed a Response in Opposition. (Doc. No. 5.)
STANDARD OF REVIEW
motion to dismiss standard under Federal Rule of Civil
Procedure 12(b)(6) is set forth in Ashcroft v.
Iqbal, 556 U.S. 662 (2009). After Iqbal it is
clear that “threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements do
not suffice” to defeat a Rule 12(b)(6) motion to
dismiss. Id. at 663; see also Bell Atl. Corp. v.
Twombly, 550 U.S. 544 (2007). “To survive a motion
to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ethypharm S.A. France v.
Abbott Labs., 707 F.3d 223, 231 n.14 (3d Cir. 2013)
(citing Sheridan v. NGK Metals Corp., 609 F.3d 239,
262 n.27 (3d Cir. 2010)). “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.”
Id. Applying the principles of Iqbal and
Twombly, the Third Circuit in Santiago v.
Warminster Twp., 629 F.3d 121 (3d Cir. 2010), set forth
a three-part analysis that a district court in this Circuit
must conduct in evaluating whether allegations in a complaint
survive a 12(b)(6) motion to dismiss:
First, the court must “tak[e] note of the elements a
plaintiff must plead to state a claim.” Second, the
court should identify allegations that, “because they
are no more than conclusions, are not entitled to the
assumption of truth.” Finally, “where there are
well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise
to an entitlement for relief.”
Id. at 130 (quoting Iqbal, 556 U.S. at 675,
679). “This means that our inquiry is normally broken
into three parts: (1) identifying the elements of the claim,
(2) reviewing the complaint to strike conclusory allegations,
and then (3) looking at the well-pleaded components of the
complaint and evaluating whether all of the elements
identified in part one of the inquiry are sufficiently
alleged.” Malleus v. George, 641 F.3d 560, 563
(3d Cir. 2011).
complaint must do more than allege a plaintiff's
entitlement to relief, it must “show” such an
entitlement with its facts. Fowler v. UPMC
Shadyside, 578 F.3d 203, 210-11 (citing Phillips v.
Cnty. of Allegheny, 515 F.3d 224, 234-35 (3d Cir.
2008)). “[W]here the well-pleaded facts do not permit
the court to infer more than the mere possibility of
misconduct, the complaint has alleged - but it has not
‘shown' - ‘that the pleader is entitled to
relief.'” Iqbal, 556 U.S. at 679. The
“plausibility” determination is a
“context-specific task that requires the reviewing
court to draw on its judicial experience and common
moves to dismiss the Complaint in its entirety pursuant to
Federal Rule of Civil Procedure 12(b)(6). Regarding the
breach of contract claim, Defendant first argues that
Plaintiff was not a resident of his parents' household
and for this reason was not covered under the GEICO insurance
policy. (Doc. No. 3 at ¶ 13.) Defendant also argues that
the language of the insurance policy specifically excludes
Plaintiff's underinsured motorist claim. (Id. at
¶ 58.) Finally, Defendant argues that Plaintiff has
failed to state a plausible bad faith claim. (Id. at
¶ 74.) The Court will address each argument in turn.
Plaintiff Has Plausibly Alleged a Breach of Contract
Plaintiff May Have Been an Insured
Count I of the Complaint, Plaintiff raises a breach of
contract claim against Defendant. Specifically, Plaintiff
claims that Defendant breached the insurance contract between
itself and the Toners by refusing to pay Plaintiff's
underinsured motorist claim. (Doc. No. 4-1 at ¶¶
24-30.) Plaintiff claims that he is insured under his
parents' GEICO insurance policy because he is a member of
their Huntingdon Valley household. (Id. at ¶
3.) Defendant contends that Plaintiff resided in Palm Beach
County, Florida at the time of the accident and should not be
considered a member of the Toners' Huntingdon Valley
household. (Doc. No. 3 at ¶¶ 52-55.) Viewing the
facts in the light most favorable to Plaintiff, this issue
cannot be resolved in favor of Defendant at this stage.
Pennsylvania law,  a breach of contract claim requires that a
plaintiff establish: “(1) the existence of a contract,
including its essential terms, (2) a breach of a duty imposed
by the contract[, ] and (3) resultant damages.”
Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d