United States District Court, M.D. Pennsylvania
PATRICK A. KLINE and SHARON L. KLINE, Plaintiffs,
PROGRESSIVE CORP., Defendant.
Jennifer P. Wilson, United States District Court Judge.
a breach of contract and bad faith action brought by two car
insurance policyholders against their insurance company.
Plaintiffs, Patrick A. Kline and Sharon L. Kline (“the
Klines” or “Plaintiffs”), bring claims for
breach of contract, bad faith, and unfair claim settlement
practices. Defendant, Progressive Specialty Insurance Company
(“Progressive”),  has filed a motion to dismiss
portions of the Plaintiffs' complaint pursuant to Federal
Rule of Civil Procedure 12(b)(6). For the reasons that
follow, the court will grant Progressive's motion to
Background and Procedural History
case was first filed in the Franklin County Court of Common
Pleas on March 20, 2019. (Doc. 1-2 at 6.) According to the
complaint, Progressive issued the Klines an auto insurance
policy on December 1, 2017, which provided that Progressive
would indemnify the Klines from certain losses. (Id.
¶¶ 8-9.) The policy was in effect on January 1,
2018, when Patrick Kline was involved in a collision caused
by Victor C. Mowen (“Mowen”). (Id.
¶¶ 10-13.) After the collision, the Klines settled
a claim with Mowen for the maximum amount that Mowen's
insurance company would pay under Mowen's auto insurance
policy. (Id. ¶ 15.) The Klines subsequently
filed a claim with Progressive for underinsured motorist
coverage, but Progressive refused to pay the Klines'
claim. (Id. ¶¶ 17- 19.)
Klines raise claims in their complaint for breach of
contract, bad faith, and unfair claim settlement practices.
The Klines allege that Progressive's conduct constitutes
bad faith because Progressive “delayed paying
Plaintiffs their policy proceeds for unknown reasons, ”
because Progressive forced the Klines to pursue litigation to
resolve their claim, because Progressive “engaged in
deceptive acts” with regard to the Klines' policy,
because Progressive “made false statements” to
the Klines “for the purposes of creating an apparent
reason” to deny the Klines' claim, and because
Progressive “made oppressive demands” of the
Klines to delay payment of the Klines' claim.
(Id. ¶ 31.)
removed the case to this court on April 19, 2019, and then
filed the instant motion to dismiss. (Docs. 1, 3.) The Klines
filed a brief in opposition to the motion on October 31,
2019, and Progressive filed a reply brief on November 3,
2019. (Docs. 9-10.)
court has jurisdiction under 28 U.S.C. § 1332, which
allows a district court to exercise subject matter
jurisdiction where the parties are citizens of different
states and the amount in controversy exceeds $75, 000.
order “[t]o 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 v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A claim is plausible on its face
“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.
(quoting Twombly, 550 U.S. at 556).
“Conclusory allegations of liability are
insufficient” to survive a motion to dismiss.
Garrett v. Wexford Health, 938 F.3d 69, 92 (3d Cir.
2019) (quoting Iqbal, 556 U.S. at 678-79). To
determine whether a complaint survives a motion to dismiss, a
court identifies “the elements a plaintiff must plead
to state a claim for relief, ” disregards the
allegations “that are no more than conclusions and thus
not entitled to the assumption of truth, ” and
determines whether the remaining factual allegations
“plausibly give rise to an entitlement to
relief.” Bistrian v. Levi, 696 F.3d 352, 365
(3d Cir. 2012).
motion to dismiss, Progressive argues that the Klines'
bad faith claim should be dismissed because the Klines fail
to plead sufficient facts to state a bad faith claim upon
which relief can be granted; that the Klines' claim for
unfair claim settlement practices should be dismissed because
neither Pennsylvania's Unfair Insurance Practices Act
(“UIPA”) nor Pennsylvania's regulations
governing unfair claim settlement practices allow for a
private cause of action; and that the Klines' breach of
contract claim should be dismissed to the extent that it
seeks attorneys' fees because such fees are not available
in a breach of contract action under Pennsylvania law. These
arguments are addressed seriatim.
The Complaint Fails to State a Bad Faith Claim Upon Which
Relief Can Be Granted.
first argues that the Klines' bad faith claim should be
dismissed pursuant to Federal Rule of Civil Procedure
12(b)(6) because the complaint does not allege sufficient
facts to state a bad faith claim upon which relief can be
granted. Bad faith claims under Pennsylvania law are governed
by 42 Pa.C.S. § 8371. To state a claim for bad faith
against an insurer under Pennsylvania law, a plaintiff must
allege “(1) that the insurer did not have a reasonable
basis for denying benefits under the policy and (2) that the
insurer knew of or recklessly disregarded its lack of a
reasonable basis.” Rancosky v. Washington Nat'l
Ins. Co., 170 A.3d 364, 365 (Pa. 2017) (citing
Terletsky v. Prudential Prop. & Cas. Ins. Co.,
649 A.2d 680 (Pa. Super. Ct. 1994)). “In other words,
‘bad faith is a frivolous or unfounded refusal to pay,
lack of investigation into the facts, or a failure to
communicate with the insured.'” NVR, Inc. v.
Motorists Mut. Ins. Co., 371 F.Supp.3d 233, 255 (W.D.
Pa. 2019) (quoting The Frog, Switch & Mfg. Co., Inc.
v. Travelers Ins. Co., 193 F.3d 742, 751 n.9 (3d Cir.
1999)). A complaint does not state a bad faith claim upon
which relief can be granted where the bad faith claim is
based only on “bare-bones conclusory allegations”