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Foss v. Phoenix Insurance Co.

United States District Court, M.D. Pennsylvania

November 30, 2017




         Before the court for disposition is Defendant Phoenix Insurance Company's (hereinafter “defendant”) motion to dismiss Count II of Plaintiffs' Martin and Susan Foss (hereinafter “plaintiffs”) complaint. The motion has been fully briefed and the matter is ripe for disposition.


         Plaintiffs insured their home with defendant. (Doc. 1-1, compl. ¶ 3). The homeowners' policy included basic coverage as well as a value added policy, the latter providing additional coverage. (Id. ¶ 7). Losses covered by the value added policy included coverage up to $58, 000.00 for “ordinance law” coverage. (Id. ¶ 8). A damaged sewer pipe resulted in a loss at plaintiff's property on January 13, 2017. (Id. ¶ 9, 14).[1]

         In the ensuing excavation the fresh water supply pipe leading to plaintiffs' home was found to be actually running through the sewer pipe, in violation of building and construction codes. (Id. ¶ 14). In addition to separating the sewer and water pipes, the homeowners' insurance claim necessitated: removing concrete stairs in front of the home (Id. ¶ 16); damage repair inside the home, (Id. ¶ 21); and electrical work inside the home, (Id. ¶ 19). This extra work is required in order to comply with ordinances and laws.[2]

         Defendant has denied all coverage necessitated by the ordinance and law upgrade expenses. (Id. ¶ 20). The sewer pipe remains exposed as a result. (Id. ¶ 23). The complaint alleges defendants payments are well below the loss, defendants failed to honor the policy terms, along with wrongfully denying claims under the value added policy mentioned above, resulting in desperate need for repairs and a home in “complete disarray.” (Id. ¶ 25-28).

         In response, plaintiffs filed their complaint on August 29, 2017 in the Court of Common Pleas for Schuylkill County, Pennsylvania alleging the following: Count I alleges breach of contract; and Count II alleges Breach of Duty of Good Faith and Fair Dealing under 42 Pa.C.S.A. § 8371. Defendant timely filed a notice of removal to this court on September 28, 2017, followed by the instant motion to dismiss on October 3, 2017, relative to Count II only, thus bringing the case to its current posture.


         Plaintiffs are citizens of Pottsville, Pennsylvania. (Doc. 1, notice of removal). Defendant is a citizen of Connecticut. (Id. ¶ 8). Plaintiffs seek in excess of $75, 000 in damages. (Id. ¶ 9).

         Thus, because the parties are citizens of different states this court has diversity jurisdiction pursuant to 28 U.S.C. § 1332. See 28 U.S.C. § 1332(a)(1) (“The 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”). The substantive law of Pennsylvania shall apply to the instant case because the court is sitting in diversity. Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d. Cir. 2000), citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938).

         Standard of review

         Defendant filed its motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The court tests the sufficiency of the complaint's allegations when considering a Rule 12(b)(6) motion. All well-pleaded allegations of the complaint must be viewed as true and in the light most favorable to the non-movant to determine whether, “‘under any reasonable reading of the pleadings, the plaintiff may be entitled to relief.'” Colburn v. Upper Darby Twp., 838 F.2d 663, 665-66 (3d Cir. 1988) (quoting Estate of Bailey by Oare v. Cnty. of York, 768 F.2d 503, 506 (3d Cir. 1985)). The plaintiff must 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. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). Moreover, the plaintiff must allege facts that “justify moving the case beyond the pleadings to the next stage of litigation.” Phillips, 515 F.3d at 234-35. In evaluating the sufficiency of a complaint the court may also consider “matters of public record, orders, exhibits attached to the complaint and items appearing in the record of the case.” Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 n.2 (3d Cir. 1994) (citations omitted). The court does not have to accept legal conclusions or unwarranted factual inferences. See Curay-Cramer v. Ursuline Acad. of Wilmington, Del., Inc., 450 F.3d 130, 133 (3d Cir. 2006) (citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997)).

         The federal rules require only that plaintiff provide “a short and plain statement of the claim showing that the pleader is entitled to relief, ” a standard which “does not require detailed factual allegations, ” but a plaintiff must make “a showing, rather than a blanket assertion, of entitlement to relief that rises above the speculative level.” McTernan v. N.Y.C., 564 F.3d 636, 646 (3d Cir. 2009) (citations and internal quotations and quotation marks omitted). The “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 Twombly, 550 U.S. at 570). Such “facial plausibility” exists “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. (citing Twombly, 550 U.S. at 556). “[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 ...

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