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MBMJ Properties, LLC v. Millville Mutual Insurance Co.

United States District Court, E.D. Pennsylvania

August 5, 2019

MBMJ PROPERTIES, LLC, et al, Plaintiffs,
v.
MILLVILLE MUTUAL INSURANCE COMPANY, Defendant.

          OPINION

          Slomsky, J.

         I. INTRODUCTION

         On November 20, 2018, Plaintiff MBMJ Properties, LLC (“MBMJ”) and 4450 Sherwood Lane, LLC (“Sherwood”) (collectively, “Plaintiffs”) filed a Complaint against their insurer, Defendant Millville Mutual Insurance Company (“Defendant”), alleging breach of contract (Count I) and bad faith (Count II), stemming from Defendant's refusal to pay an insurance claim made by Plaintiffs for losses incurred at their real property located at 232-234 North Broad Street, Waynesboro, Pennsylvania.

         On January 1, 2019, Defendant filed a Motion to Dismiss Count II of the Complaint. On April 16, 2019, the Court granted the Motion and dismissed Plaintiffs' bad faith claim in Count II, but allowed Plaintiffs leave to amend the claim. On May 7, 2019, Plaintiffs filed an Amended Complaint. Before the Court is Defendant's Motion to Dismiss Count II of the Amended Complaint under Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, the Court will grant Defendant's Motion.

         II. BACKGROUND

         MBMJ and Sherwood are corporate entities that together own the real property located at 232-234 North Broad Street, Waynesboro, Pennsylvania (the “Property”). (Doc. No. 12 ¶¶ 1-2.) At all times relevant to this case, Plaintiffs insured the Property with Defendant pursuant to Policy Number 1186396 (the “Policy”). (Id. ¶¶ 6-7; id. at Ex. A.)

         On November 24, 2017, the Property incurred “direct physical loss and damage.” (Id. ¶ 7.) Plaintiffs allege that the loss was the “result of a peril insured against under the Policy, ” but the Complaint does not specify what caused the loss and damage, nor does it explain the nature of the peril. (Id.) After incurring this loss, Plaintiffs gave notice of the damage to Defendant and demanded coverage under the terms of the Policy in a “prompt and timely manner.” (Id. ¶¶ 8-9.) Plaintiffs allege that Defendant “has refused, without legal justification or cause, and continues to refuse to pay to Plaintiff monies owed for the damage suffered as a result of the Loss.” (Id. ¶ 9.)

         On November 18, 2018, as result of Defendant's refusal to pay, Plaintiffs filed a two-count Complaint against Defendant, alleging breach of contract (Count I) and bad faith denial of their insurance claim (Count II). (Doc. No. 5.) Plaintiffs alleged in the Complaint that Defendant's denial of coverage was in bad faith because Defendant had engaged in the following conduct:

a. by sending correspondence falsely representing that Plaintiff's loss caused by a peril insured against under the Policy was not entitled to benefits due and owing under the Policy;
b. in failing to complete a prompt and thorough investigation of Plaintiff's claim before representing that such a claim is not covered under the Policy;
c. in failing to pay Plaintiff's covered loss in a prompt and timely manner;
d. in failing to objectively and fairly evaluate Plaintiff's claim;
e. in conducting an unfair and unreasonable investigation of Plaintiff's claim;
f. in asserting Policy defenses without a reasonable basis in fact;
g. in flatly misrepresenting pertinent facts or policy provisions relating to coverages at issue and placing unduly restrictive interpretations on the Policy and/or claim forms;
h. in failing to keep Plaintiff or its representatives fairly and adequately advised as to the status of the claim;
i. in unreasonably valuing the loss and failing to fairly negotiate the amount of the loss with Plaintiff or their representatives;
j. in failing to promptly provide a reasonable factual explanation of the basis for the denial of Plaintiff's claim;
k. in unreasonably withholding policy benefits;
l. in acting unreasonably and unfairly in response to Plaintiff's claim;
m. in unnecessarily and unreasonably compelling Plaintiff to institute this lawsuit to obtain policy benefits for a covered loss, that Defendant should have paid promptly and without the necessity of litigation.

(Doc. No. 1 ¶ 18.)

         On January 29, 2019, Defendant responded by filing a Motion to Dismiss Count II on the ground that it failed to state a claim. (Doc. No. 5.) On April 16, 2019, the Court issued an Opinion (Doc. No. 9) and entered an Order (Doc. No. 10) granting the Motion and dismissing Plaintiffs' bad faith claim in Count II. The Court held that the allegations of bad faith in the original Complaint failed to state a claim under Rule 12(b)(6) because they were impermissibly vague and conclusory, thus rendering the bad faith claim implausible. (Doc. No. 9.) Even so, the Court dismissed the bad faith claim without prejudice and afforded Plaintiffs the opportunity to file an Amended Complaint pursuant to Federal Rule of Civil Procedure 15(a). (Id. at 10-11.) The Court cautioned, however, that “[i]f Plaintiffs are unable to allege plausible facts underlying their various claims of bad faith, then the Complaint should not be amended.” (Id. at 11.)

         Subsequently, on May 7, 2019, Plaintiffs filed an Amended Complaint, again alleging breach of contract (Count I) and bad faith (Count II). In support of their amended bad faith claim, Plaintiffs alleged this time that Defendant had engaged in the following conduct:

a. in purposefully and unreasonably delaying the adjustments of Plaintiff's claim and in participating in the misrepresentation as to the cause of loss and the cost to repair Plaintiff's damaged property;
b. in failing to promptly respond to Plaintiff's request for information, and specifically, requiring Plaintiff to send numerous;
c. in failing to acknowledge pertinent communications within ten (10) working days in violation of the Pennsylvania ...

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