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Kunsman v. Metropolitan Direct Property and Casualty Insurance Co.

United States District Court, E.D. Pennsylvania

June 21, 2018



          SCHMEHI, J.

         Defendant Metropolitan Direct Property and Casualty Insurance Company ("MetLife") moves this Court to dismiss Plaintiff Carol Kunsman's bad faith claim (Count II) and strike any reference to the Unfair Insurance Practices Act ("UIPA"). Ms. Kunsman's Amended Complaint alleges one count breach of contract and one count bad faith. MetLife's argues Ms. Kunsman's Amended Complaint consists of threadbare allegations supported by mere conclusory statements and should therefore be dismissed. MetLife also argues Ms. Kunsman's reference to the UIPA should be stricken from the Amended Complaint as immaterial and not relevant to Ms. Kunsman's claim. For the reasons that follow, MetLife's Motion to Dismiss will be denied in part and granted in part.

         I. BACKGROUND

         Ms. Kunsman suffered "sudden and accidental direct physical loss" to her insured premises. (ECF Docket No. 8, ¶ 8.) Ms. Kunsman provided MetLife with a timely notice of covered loss and included all available information. (Id. at ¶ 7.) MetLife determined Ms. Kunsman suffered loss to property covered under the policy but did not completely indemnify Ms. Kunsman for the loss. (Id. at ¶ 9.) MetLife denied coverage for certain aspects of the claim. (Id.)

         Specifically, Ms. Kunsman suffered water damage containing human waste and "[MetLife's] estimate of repairs did not include payment for the removal and replacement of all porous material that came into contact with the contaminated water." (Id. at ¶¶ 15, 24.) Ms. Kunsman alleges MetLife's failure to include payment for removal and replacement of all areas affected by contaminated water did not comply with the standards acknowledged by the insurance and construction industries. (Id. at ¶¶ 23-24.) And, MetLife knew that its estimate of repairs and ultimate payment did not comply with the insurance and construction industries for damage caused by contaminated water. (Id. at ¶¶ 25-26.) Ms. Kunsman alleges MetLife grossly underestimated the extent of the damage and grossly underpaid Ms. Kunsman's claim and therefore committed bad faith. (Id. at ¶¶ 26-27.)


         "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.'" Ashcroft Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Ail. Corp. Twombly, 550 U.S. 544, 570 (2007)). A claim satisfies the plausibility standard when the facts alleged "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Burtch Millberg Factors, Inc., 662 F.3d 212, 220-21 (3d Cir. 2011) (citing Iqbal, 556 U.S. at 678). While the plausibility standard is not "akin to a 'probability requirement, '" there nevertheless must be more than a "sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief."' Id. (quoting Twombly, 550 U.S. at 557).

         The Court of Appeals requires us to apply a three-step analysis under a 12(b)(6) motion: (1) "it must 'tak[e] note of the elements [the] plaintiff must plead to state a claim;'" (2) "it should identify allegations that, 'because they are no more than conclusions, are not entitled to the assumption of truth;'" and, (3) "[w]hen there are well-pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief." Connelly Lane Construction Corp., 809 F.3d 780, 787 (3d Cir. 2016) (quoting Iqbal, 556 U.S. at 675, 679); see also Burtch, 662 F.3d at 221; Malleus George, 641 F.3d 560, 563 (3d Cir. 2011); Santiago Warminster Township, 629 F.3d 121, 130 (3d Cir. 2010).

         Also, under Federal Rule of Civil Procedure 12(f), "the court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Ci P. 12(0- In a Rule 12(f) motion, the court must view the pleadings in the light most favorable to the non-moving party. Darden-Munsell Dutch Maid Logistics, 2011 WL 3325863, at *4 (W.D. Pa. 2011); see also Tennis Ford Motor Co, 730 F.Supp.2d 437, 443 (W.D. Pa. 2010) quoting Natale Winthrop Resources Corp., 2008 WL 2758238, at *14 (E.D. Pa. 2008) ("Striking some or all of a pleading is [... ] considered a drastic remedy to be resorted to only when required for the purposes of justice."). "Motions to strike are not favored and usually will be denied unless the allegations have no possible relation to the controversy and may cause prejudice to one of the parties." Id. (citing Mclnerney Moyer Lumber & Hardware, 244 F.Supp.2d 393, 401 (E.D. Pa. 2002)).

         III. ANALYSIS

         a. Bad Faith in violation of 42 Pa.C.S.A. § 8371

         Under Pennsylvania bad faith, 42 Pa. Cons. Stat. § 8371, a plaintiff must show: "(1) that the insurer lacked a reasonable basis for denying benefits; and (2) that the insurer knew or recklessly disregarded its lack of reasonable basis." Terletsky Prudential Prop, and Cas. Ins. Co., 649 A.2d 680, 688 (1994); see also Verdetto State Farm Fire & Cas. Co., 837 F.Supp.2d 480, 484 (M.D. Pa. 2011) (quoting Klinger State Farm Mut. Auto. Ins. Co., 115 F.3d 230, 233 (3d Cir. 1997)); see also Rancosky v Wash. National Insurance Company, 170 A.3d 364 (Pa. 2017) (adopting the two-pronged test and holding that self-interest or ill will "is not a prerequisite to prevailing in a bad faith claim under Section 8371"). Our Circuit defines bad faith on the part of the insurer as:

[A]ny frivolous or unfounded refusal to pay proceeds of a policy [that need not] be fraudulent. For purposes of an action against an insurer for failure to pay a claim, such conduct imports a dishonest purpose and means a breach of a known duty (i.e., good faith and fair dealing), through some motive of self-interest or ill will; mere negligence or bad judgment is not bad faith.

Irving State Farm Mutual Automobile Insurance Co., 2017 WL 4404396, at *3 (E.D. Pa. 2017) (dismissing a bad faith claim as legally insufficient because the complaint did not contain any explanations or descriptions of the alleged bad faith conduct) (quoting Northwestern ...

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