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Ream v. Nationwide Property & Casualty Insurance Company, NAIC

United States District Court, W.D. Pennsylvania

September 9, 2019




         Plaintiffs Jason and Corinna Ream ("Plaintiffs") sued Defendant Nationwide Property and Casualty Insurance Company ("Defendant") for breach of contract and bad faith based on the handling of a claim for underinsured motorist ("UIM") benefits. Plaintiffs alleged three claims against Defendant: (1) breach of contract; (2) loss of care, companionship, and consortium; and (3) insurance bad faith under 42 Pa. C.S. § 8371. Defendant filed a partial Motion to Dismiss targeting Count III for failure to state a claim for which relief could be granted ("Defendant's Motion"). For the reasons that follow, Defendant's Motion will be granted, in part without prejudice, in part with prejudice.

         I. BACKGROUND

         A. Facts

         Here are the key facts, as alleged in the Complaint: On December 5, 2017, Jason Ream was driving on Pennsylvania State Route 51 when he was struck by another driver, Philip E. Lint. The accident resulted in various injuries and damages to Ream and his property. (Compl., ECF No. 1, Ex. A, ¶¶ 3, 6, 10-14, 28.) At the time of the accident, Plaintiffs were insured under a vehicular insurance policy issued by Defendant which provided $250, 000.00 in UIM coverage stacked by multiple vehicles.[1] (Id. ¶ 17.)

         Lint was insured by Nationwide Insurance Company with bodily injury liability protection limits in the amount of $25, 000.00. (Id. ¶ 15.) Plaintiffs settled their claim with the tortfeasor for his $25, 000.00 liability limits and with the consent of Defendant. (Id. ¶¶ 15, 32, 34.) However, according to the Complaint, Lint's policy limits were not adequate to compensate Plaintiffs for the injuries sustained as a result of the accident. (Id. ¶ 16.)

         Plaintiffs submitted a claim for UIM benefits to Defendant in January 2018. (Id. ¶ 26.) Since that time, Plaintiffs have provided various medical and economic reports and documents to Defendant for review. (Id. ¶ 27.) On March 26, 2019, Plaintiffs made a written demand for the stacked policy limits of UIM coverage due under the subject policies and have continued to demand payment since that date. (Id. ¶¶ 30, 31.)

         According to the Complaint, Defendant failed to "objectively and fairly evaluate Plaintiffs' claim," "promptly offer reasonable payment to the Plaintiffs," "reasonably and adequately [] investigate Plaintiffs' claim," among other things. (Id. ¶ 43.) Through its conduct, Defendant allegedly violated its obligations under the subject insurance policies, thereby breaching its contractual duties, in addition to committing insurance bad faith under 42 Pa. C.S. §8371.

         B. Procedural History

         Plaintiffs initiated this lawsuit in the Court of Common Pleas in Fayette County, Pennsylvania. (Compl., ECF No. 1, Ex. A.) On the basis of diversity jurisdiction, Defendant removed the lawsuit to this Court on June 28, 2019. (Def.'s Notice of Removal, ECF No. 1.) Defendant filed the pending Motion and Plaintiffs filed a Response. (Def.'s Mot. to Dismiss, ECF No. 2; Pis.' Resp. to Def.'s Mot. to Dismiss, ECF No. 10.) The Court has reviewed the Motion, Response, and all briefing in support therein, and the matter is ripe for disposition.[2]


         A. Rule 12(b)(6) Motions

         Federal Rule of Civil Procedure 12(b)(6) allows dismissal of a claim for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). Complaints therefore must allege facts "sufficient to show that the plaintiff has a 'plausible claim for relief" Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). When determining whether dismissal is appropriate, the Court must: "(1) identify[] the elements of the claim, (2) review[] the complaint to strike conclusory allegations, and then (3) look[] at the well-pleaded components of the complaint and evaluat[e] 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). The Court should "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Blanyar v. Genova Prods. Inc., 861 F.3d 426, 431 (3d Cir. 2017) (citing Fowler, 578 F.3d 203). The Court may consider "only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon [those] documents." Wayne Land & Mineral Grp. LLC v. Del. River Basin Comm 'n, 894 F.3d 509, 527 (3d Cir. 2018) (quoting Hartig Drug Co. v. Senju Pharm. Co., 836 F.3d 261, 268 (3d Cir. 2016)).

         B. Rule 12(f) Motions

         A court may strike from a pleading "any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed.R.Civ.P. 12(f). Under Rule 12(f), the "purpose of a motion to strike is to clean up the pleadings, streamline litigation, and avoid unnecessary forays into immaterial maters." Hildebrand v. Allegheny Cty., No. 12-cv-l 122, 2012 WL 6093798, at *7 (W.D. Pa. Dec. 7, 2012). The standard for striking portions of a complaint is strict and "only allegations that are so unrelated to the plaintiffs' claims as to be unworthy of any consideration should be stricken." Miller v. Allstate Fire & Cas. Ins. Co., No. 07-cv-260, 2009 WL 577964, at *2 (W.D. Pa. Mar. 5, 2009). While motions to strike are generally disfavored, allegations that "confuse the issues" may be struck for clarity's sake. See LabMD, Inc. v. Tiversa Holding Corp., No. 15-cv-92, 2017 WL 9532618, at *1 (W.D. Pa. May 26, 2017). "Motions to strike are decided on the pleadings alone." Miller, 2009 WL 577964, at *2.


         At issue is Count III of the Complaint. First, Defendant argues that Plaintiffs' bad faith claim should be dismissed because Plaintiffs fail to plead sufficient facts to state a claim under the Pennsylvania bad faith statute considered in the context of federal pleading standards. Next, Defendant argues that Plaintiffs' allegations that Defendant owed and/or breached a fiduciary duty in those regards should be dismissed because no such duty is owed in the UIM context. Lastly, Defendant argues that Plaintiffs' demands for compensatory damages for bad faith should be dismissed because such damages are not recoverable under the bad faith statute. The Court will address each argument below.

         A. Plaintiffs' Bad Faith Claim

         In an action arising under an insurance policy, Pennsylvania's bad faith statute provides certain remedies if the insurer has acted in bad faith toward the insured: (1) "interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%"; (2) "punitive damages against the insurer"; and (3) "court costs and attorney fees against the insurer." 42 Pa. C.S. § 8371.

         The statute does not define "bad faith," or otherwise "set forth the manner in which a party" must prove bad faith. Rancosky v. Wash. Nat'l Ins. Co., 170 A.3d 364, 373 (Pa. 2017). However, the Pennsylvania Supreme ...

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