Loughery v. Mid-Century Insurance Co.

          MEMORANDUM OPINION AND ORDER

          PATRICIA L. DODGE UNITED STATES MAGISTRATE JUDGE.

         Plaintiff Kirsti Loughery brings this action against Defendant Mid-Century Insurance Co. ("Mid-Century"), arising out of Mid-Century's handling of her claim for first party income loss benefits following a motor vehicle accident which occurred on October 24, 2016.

         The Complaint, which was originally filed in the Court of Common Pleas of Beaver County and then removed to this Court, alleges four causes of action against Mid-Century. In Count I, Plaintiff alleges that Mid-Century breached the terms of the insurance policy. Count II asserts that Mid-Century breached the duty of good faith and fair dealing and in Count III, Plaintiff claims that Mid-Century engaged in bad faith in violation of 42 Pa.C.SA § 8371. Finally, Count IV asserts a claim for violation of the Unfair Trade Practices and Consumer Protection Law, 73 P.S. §§ 201-1 to 201-9.3 ("UTPCPL").

         On April 19, 2019, Mid-Century filed a partial motion to dismiss (ECF No. 4), in which it contends that Counts II, III and IV of the Complaint should be dismissed. Its motion has been fully briefed and is ripe for adjudication. For the reasons that follow, Mid-Century's motion will be granted with respect to Count IV of the Complaint and denied with respect to Counts II and III.

         I. Relevant Factual Background

         Plaintiff purchased an automobile policy from Mid-Century^[1] which has first-party income loss benefits of $2, 500.00 per month and $50, 000.00 aggregate. According to Plaintiff, she paid an additional premium for the income loss benefits. (Compl. ¶¶ 5-8.)^[2] On October 24, 2016, Plaintiffs vehicle was struck from behind in a violent collision with a third party and she suffered serious and permanent injuries. (Compl. ¶¶ 9, 10.) The third party accepted liability for the accident and paid its policy limits. (Compl. ¶ 11.) At the time of the accident, Plaintiff owned and operated a home cleaning/maid service known as Maid in the USA, which cleaned both residential and commercial properties. She was the sole employee and her duties were very physical, requiring lifting, movements overhead, carrying objects and activities associated with heavy cleaning. (Compl. ¶¶ 9-14.)

         Because of the injuries she sustained in the accident, Plaintiff was required to undergo extensive medical treatment, including surgery. As a result, she missed several weeks of work and submitted lost benefit claims which were paid by Mid-Century. (Compl. ¶¶ 15-19.) In addition to medical authorizations, wage loss information, disability slips and other documents, Plaintiff submitted medical narrative reports from Dr. DeChellis and Dr. Myers, who rendered opinions that her continued work at Maid in the USA would aggravate the injuries sustained in the automobile accident. (Compl. ¶¶ 21, 22.) Plaintiff also provided Mid-Century with a disability slip from Dr. DeChellis. (Compl. ¶ 23.)

         According to the Complaint, however, when Plaintiff filed a timely claim with Mid-Century's claim handler, Jeffrey Silfies, for income loss benefits after she closed her business on September 1, 2018, Mid-Century did not pay her claim. Rather, it informed her that it was scheduling a physical examination with Dr. James C. Craig, Jr. and directed her to bring all x-rays, MRIs and medical records and to fill out a medical history and social history questionnaire. (Compl. ¶¶ 20-28 & Exs. 1-3.)

         After being asked by Plaintiffs counsel the purpose of the exam, Mr. Silfies responded in a letter dated November 20, 2018 that the purpose was to determine her disability for income loss benefits, stating "The policy states: a person claiming any coverage under this policy must also as required by Pennsylvania law, submit to physical examination at our expense by doctors we select as often as we may reasonably require." (Compl. ¶¶ 29-30 & Exs. 4-5.) Plaintiffs counsel responded by again furnishing the reports of Drs. DeChellis and Myers in support of her inability to return to her previous job with Maid in the USA. In a subsequent letter, counsel explained to Mr. Silfies that, under Pennsylvania law, an insured is only required to submit to a physical examination after "good cause is shown" and because Mid-Century had not provided good cause or obtained a court order, Plaintiff would not be submitting to a physical exam. (Compl. ¶¶ 31-32 & Exs. 6-7.) On November 30, 2018, counsel also sent to Mr. Silfies Plaintiffs tax information for the years 2016 and 2017, information that had previously been requested and sent on several occasions. (Compl. ¶ 33 & Ex. 8.)

         On December 5, 2018, Mr. Silfies indicated that he had received counsel's letters but was awaiting some undefined additional information regarding Plaintiffs income loss claim. (Compl. ¶ 34 & Ex. 9.) When subsequently asked what additional information was required, Mr. Silfies replied that Mid-Century was requesting an examination under oath. Plaintiff was again asked to provide her tax returns as well as a number of other documents, which she did, and the examination under oath eventually took place at the office of Defendant's counsel on February 5, 2019. (Compl. ¶¶ 35-44 & Exs. 10-16.)

         Plaintiff alleges that Mid-Century intentionally and without legal justification attempted to schedule a medical examination when it knew or should have known that she was not required to submit to such an examination without a court order based on good cause shown. She also claims that Mid-Century has a well-established business relationship with Dr. Craig and that the sole purpose of scheduling the exam was to "fashion[] a reason to delay or deny Plaintiffs claim for income loss benefits." (Compl. ¶¶ 50-51.)

         As of the date of the filing of the Complaint in February of 2019, Mid-Century had not provided Plaintiff with a decision regarding the payment of her income loss benefits. (Compl. ¶ 45.) Plaintiff contends that Mid-Century's failure to provide her with a decision as to her claim for income loss benefits constitutes a bad faith denial of the claim without a reasonable basis. (Compl. ¶¶ 46-49.)

         According to the Complaint, Plaintiff has been without income loss benefits since her last day of work on January 1, 2018, has sustained a loss of needed income and has incurred past and ongoing legal costs, fees and expenses associated with the attempt to obtain the benefits. (Compl. ¶¶ 55-57.)

         II. Standard of Review

         "Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting all well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court finds that plaintiffs claims lack facial plausibility." Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)). "This requires a plaintiff to plead "sufficient factual matter to show that the claim is facially plausible," thus enabling "the court to draw the reasonable inference that the defendant is liable for misconduct alleged." Id. (quoting Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)). While the complaint "does not need detailed factual allegations ... a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. See also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         The Court of Appeals has summarized the inquiry as follows:

To determine the sufficiency of a complaint, a court must take three steps. First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1947, 173 L.Ed.2d 868 (2009). Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 1950. Third, "whe[n] 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. 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).

         The Court of Appeals has explained that: "In deciding a Rule 12(b)(6) motion, a court must 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 these documents." Mayer v. Belichick,605 F.3d 223, 230 (3d Cir. 2010) (citation omitted). Therefore, the Court can consider the Complaint and the exhibits ...