MIRACLE TEMPLE CHRISTIAN ACADEMY v. CHURCH MUTUAL INSURANCE COMAPNY
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE RONALD L. BUCKWALTER ON 4/16/12. 4/16/12 ENTERED AND COPIES E-MAILED.(kw, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
MIRACLE TEMPLE CHRISTIAN ACADEMY,
CHURCH MUTUAL INSURANCE COMPANY, :
BUCKWALTER, S. J.
April 16 , 2012
Currently pending before the Court is the Motion of Defendant Church Mutual Insurance
Company (“Church Mutual” or “Defendant”) to partially dismiss the Complaint of Plaintiff Miracle
Temple Christian Academy (“Miracle Temple” or “Plaintiff”). For the following reasons, the
Motion is granted.
FACTS AND PROCEDURAL HISTORY
This action stems from an insurance policy contract dispute between Plaintiff Miracle Temple
and Defendant Church Mutual. According to the facts set forth in Plaintiff’s Complaint,1 Miracle
Temple is a religious institution that provides cultural and religious services to the Philadelphia
community. (Compl. ¶ 1.) Church Mutual is a Wisconsin-based insurance company legally
Plaintiff originally filed its Complaint in the Court of Common Pleas in Philadelphia
County on January 24, 2012. On March 6, 2012, Defendant removed the action to federal court.
Therefore, all references herein to Plaintiff’s Complaint relate to the original Complaint filed in
the Court of Common Pleas.
authorized to operate within the Commonwealth of Pennsylvania. (Id. ¶ 2.) In June of 2008, the
parties entered into an insurance policy contract, under which Defendant was to provide insurance
coverage for Plaintiff’s business and personal property, as well as income protection for other losses
occurring on Plaintiff’s property. (Id. ¶ 5; Defs.’ Mot. Dismiss, Ex. A, Common Policy Declarations
Page (“the Insurance Policy”).) At all relevant times, Church Mutual provided general commercial
and casualty liability insurance to Miracle Temple. (Compl. ¶¶ 3, 5.)
On March 18, 2010, Miracle Temple suffered wind and water damage to one of its buildings.
(Id. ¶ 6.) Plaintiff reported the loss and forwarded all necessary information to Church Mutual,
including the estimated amount of loss. (Id. ¶¶ 7, 8.) Thereafter, Church Mutual informed Miracle
Temple that the amount of the estimated loss was not fully covered by the Insurance Policy. (Id. ¶
9.) Miracle Temple, however, maintains that the losses were fully covered by the Insurance Policy.
To date, Miracle Temple’s property remains damaged, and Church Mutual allegedly continues to
refuse to make any payments on the Insurance Policy claim.2
Plaintiff initiated the instant action by filing its Complaint on January 24, 2012, asserting
three counts against Defendant: (1) breach of contract (Count I); (2) bad faith in violation of 42 Pa.
C.S.A. § 8371 (Count II); and (3) common law fraud (Count III). On February 28, 2012, Defendant
filed the present partial Motion to Dismiss Counts II and III of Plaintiff’s Complaint. Plaintiff filed
a Response in Opposition on March 20, 2012, and Defendant replied on March 27, 2012. The Court
will now consider the merits of Defendant’s Motion.
On this point, Defendant asserts that it paid Miracle Temple $27,065.50 for a portion of
the claim covered by the Insurance Policy. (Def. Mot. Dismiss 3.) In support of this assertion,
Defendant attached a copy of a check in this amount, which Plaintiff accepted and cashed on July
13, 2011. (See id.; Ex. C, Church Mutual Check.)
STANDARD OF REVIEW
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant bears the burden of
demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. Civ.
P. 12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atl. Corp.
v. Twombly, 550 U.S. 544 (2007), the United States Supreme Court recognized that “a plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555.
It emphasized that it would not require a “heightened fact pleading of specifics, but only enough
facts to state a claim to relief that is plausible on its face.” Id. at 570.
In the subsequent case of Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), the Supreme Court
enunciated two fundamental principles applicable to a court’s review of a motion to dismiss for
failure to state a claim. First, it noted that “the tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 1949.
Thus, although “[Federal] Rule [of Civil Procedure] 8 marks a notable and generous departure from
the hyper-technical, code-pleading regime of a prior era . . . it does not unlock the doors of discovery
for a plaintiff armed with nothing more than conclusions.” Id. at 1950. Second, the Supreme Court
emphasized that “only a complaint that states a plausible claim for relief survives a motion to
dismiss.” Id. “Determining whether a complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw on its judicial experience and common
Notwithstanding the foregoing, nothing in Twombly or Iqbal has altered some of the
fundamental underpinnings of the Rule 12(b)(6) standard of review. Arner v. PGT Trucking, Inc.,
No. Civ.A.09-0565, 2010 WL 1052953, at *2 (W.D. Pa. Mar. 22, 2010); Spence v. Brownsville Area
Sch. Dist., No. Civ.A.08-0626, 2008 WL 2779079, at *2 (W.D. Pa. July 15, 2008). Federal Rule of
Civil Procedure 8 requires only a short and plain statement of the claim showing that the pleader is
entitled to relief and need not contain detailed factual allegations. Fed. R. Civ. P. 8; Phillips v. Cnty.
of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Further, the court must “accept all factual
allegations in the complaint as true and view them in the light most favorable to the plaintiff.” Buck
v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006). Finally, the court must “determine
whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.”
Pinkerton v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002).
The Pennsylvania General Assembly has promulgated a statute under which insurers may be
held liable for their “bad faith” actions towards insureds.3 While the statute does not explicitly
define “bad faith,” both the Pennsylvania federal and state courts have recognized that, in the
insurance context, “bad faith” is synonymous with “frivolous or unfounded refusal to pay proceeds
of a policy.” Keefe v. Prudential Prop. & Cas. Ins. Co., 203 F.3d 218, 225 (3d Cir. 2000) (internal
The statute provides, in relevant part, that:
In an action arising under an insurance policy, if the court finds that the insurer has
acted in bad faith toward the insured, the court may take all of the following actions:
(1) Award 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 the interest plus 3%; (2) Award
punitive damages against the insurer; (3) Assess court costs and attorney fees against
42 Pa. Cons. Stat. Ann. § 8371.
citations and quotations omitted); Treadways, LLC v. Travelers Indem. Co., No. Civ.A.08-4751,
2011 WL 1672022, at *2–3 (E.D. Pa. May 4, 2011) (citing Terletsky v. Prudential Prop. & Cas. Ins.
Co., 649 A.2d 680, 688 (Pa. Super. Ct. 1994)) (further citation omitted); Atiyeh v. Nat’l Fire Ins.
Co., 742 F. Supp. 2d 591, 598 (E.D. Pa. 2010) (internal citations omitted). In order to prevail on a
bad faith claim, a claimant must show by clear and convincing evidence that: (1) the defendant
insurer did not have a reasonable basis for denying the policy benefits; and (2) that the insurer knew
or recklessly disregarded its lack of reasonable basis when it denied the claim. Keefe, 203 F.3d at
225 (3d Cir. 2000) (further citation omitted). The “clear and convincing” standard requires a
claimant to show that “the evidence is so clear, direct, weighty and convincing as to enable a clear
conviction, without hesitation, about whether or not the defendants acted in bad faith.” J.C. Penney
Life Ins. Co. v. Pilosi, 393 F.3d 356, 367 (3d Cir. 2004) (internal quotations and citation omitted).
Moreover, the claimant must show that the insurer acted in bad faith based on some motive of selfinterest or ill will. Atiyeh, 742 F. Supp. 2d at 598 (citing Brown v. Progressive Ins. Co., 860 A.2d
493, 501 (Pa. Super. Ct. 2004)). In doing so, a claimant need not show that the insurer’s conduct
was fraudulent, but mere negligence or bad judgment is insufficient to make out a claim based on
bad faith. Id.
In the instant case, Defendant asserts that Miracle Temple fails to allege facts sufficient to
establish that Church Mutual lacked a reasonable basis for denying benefits under the policy. (Def.
Mot. Dismiss 12.) The Court agrees. In its Complaint, Miracle Temple conclusively states that:
“Defendant has refused to provide coverage pursuant to said claim of damages[.]” (Compl. ¶ 20.)
Plaintiff further avers that “Defendant’s failure to accept the claim of damages . . . involves that of
bad faith as there is no legitimate and reasonable basis by which to deny the clear and convincing
evidence of harm evidenced on Plaintiff’s property” and that such “actions constitute those
compensable . . . [under] Section 8371.” (Id. ¶¶ 22, 23.) These averments, however, are nothing
more than mere conclusory legal statements. The law is clear that “all civil complaints must [ ] set
out ‘sufficient factual matter’ to show that the claim is facially plausible,” and that “threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1948–49 (2009). Here, “[c]ompletely absent from the
complaint are any facts that describe who, what, where, when, and how the alleged bad faith conduct
occurred.” Blasetti v. Allstate Ins. Co., No. Civ.A.11-6920, 2012 WL 177419, at *4 (E.D. Pa. Jan.
23, 2012) (quoting Liberty Ins. Corp. v. PGT Trucking, Inc., No. Civ.A. 11-151, 2011 WL 2552531,
at *4 (W.D. Pa. June 27, 2011)) (internal quotation marks and alterations omitted). Miracle Temple
has provided no factual allegations indicating that Church Mutual lacked a reasonable basis for
denying the policy benefits, or that it knew or recklessly disregarded a lack of reasonable basis when
it did so. Nor has Miracle Temple alleged any facts that would support a finding that Church Mutual
acted for a “dishonest purpose” or that its actions were motivated by self-interest or ill will.
Therefore, given the lack of sufficient factual averments, Defendant’s Motion to Dismiss Plaintiff’s
claim of bad faith is granted.
Common Law Fraud
Rule 9(b) of the Federal Rules of Civil Procedure provides that, when alleging a cause of
action based on fraud, “a party must state with particularity the circumstances constituting fraud[.]”
Fed. R. Civ. P. 9(b) (emphasis added). Rule 9(b) applies with equal force to fraud actions under
federal statutes as to those actions that are based on state law but brought in federal court. See
Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007); Christidis v. First Pa. Mortg. Trust, 717
F.2d 96, 99 (3d Cir. 1983). Under Pennsylvania law, the six elements of a common law fraud action
are: (1) a misrepresentation; (2) material to the transaction; (3) made falsely; (4) with the intent of
misleading another to rely on it; (5) justifiable reliance resulted; and (6) injury was proximately
caused by reliance. Santana Prods., Inc. v. Bobrick Washroom Equip., Inc., 401 F.3d 123, 136 (3d
Cir. 2005) (citing Viguers v. Philip Morris USA, Inc., 837 A.2d 534 (Pa. Super. Ct. 2003)). In order
to survive a motion to dismiss, the plaintiff’s complaint must “plead or allege the date, time and
place of the alleged fraud[,] or otherwise inject precision or some measure of substantiation into a
fraud allegation.” Frederico, 507 F.3d at 200 (citing Lum v. Bank of Am., 361 F.3d 217, 224 (3d
Here, Plaintiff has once again failed to sufficiently state a claim upon which relief can be
granted. At no point in its Complaint does Miracle Temple point to any factual allegations
supporting a valid fraud claim, let alone state with any reasonable particularity any circumstances
indicating fraud on Church Mutual’s part. Nor does the Complaint make any reference to any facts
supporting any of the elements of common law fraud under Pennsylvania law. Rather, Miracle
Temple merely baldly states that “Defendant’s actions, schemes, misrepresentations and failure to
pay said claim constitutes common law fraud,” without ever providing a date, time, or place for
when such alleged “schemes” and “misrepresentations” occurred. Such “bare bones” conclusory
statements are insufficient to satisfy the pleading requirements of the Federal Rules of Civil
Procedure. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). As such, Plaintiff’s
claim based on a common law fraud action is likewise dismissed.
For the aforementioned reasons, Defendant’s Motion to Dismiss Counts II and III of
Plaintiff’s Complaint is granted.
An appropriate Order follows.
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