CANIZARES et al v. HARTFORD INSURANCE COMPANY OF ILLINOIS
MEMORANDUM AND/OR OPINION SETTING FORTH THE REASONS WHY THE COURT IS GRANTING DEFENDANT'S MOTION TO DISMISS (DOCUMNET #6). AN APPROPRIATE ORDER FOLLOWS. SIGNED BY HONORABLE GENE E.K. PRATTER ON 5/27/16. 5/27/16 ENTERED AND COPIES E-MAILED.(rab, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
JOANNE CANIZARES et al.,
HARTFORD INSURANCE CO.,
MAY 27, 2016
Joanne and Robert Canizares sued Hartford Insurance Company of Illinois (“Hartford”)
in state court, alleging two counts. Count I alleges breach of contract, asserting that Hartford
failed to fulfill their contractual obligations by fully compensating the Canizareses for damage
caused to their home by a burst water pipe. Count II alleges a claim for bad faith under 42
Pa.C.S. § 8371. Having removed the case to this Court on the basis of diversity jurisdiction,
Hartford now moves to dismiss the Canizareses’ bad-faith claim pursuant to Federal Rule of
Civil Procedure 12(b)(6). 1 The Canizareses oppose the Motion.
For the reasons stated herein the Court will grant Hartford’s Motion as to Count II and
dismiss the bad-faith claim without prejudice.
ALLEGATIONS IN THE COMPLAINT 2
The Canizareses were insured by Hartford under a comprehensive homeowners policy.
The policy covered damages to the premises as well as damages to personal property. The
Hartford initially argued that both Counts should be dismissed because the Canizareses
had waived the claims by filing a previous action arising from the same transaction or
occurrence. However, Hartford has since withdrawn its waiver argument.
The factual summary is based on the allegations in the Complaint, which the Court
assumes to be true for purposes of this motion. See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
Canizareses paid all premiums when due and had satisfied all conditions of their policy. In
February 2015, the Canizareses discovered that frozen pipes within their home had burst and
caused extensive water damage to their home as well as to their personal property. These
damages were fully covered under the Canizareses’ insurance policy.
Following discovery of the damages, the Canizareses appropriately notified Hartford of
their claim and requested compensation for their losses. Hartford agreed to pay part of the
claimed losses but declined to provide all of the demanded compensation. The Canizareses
allege that the unpaid expenses associated with repairing the damages were $123,314.00 as of
February 19, 2016 when the Complaint was filed.
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the
sufficiency of a complaint. Although Federal Rule of Civil Procedure 8 requires only “a short
and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give
the defendant fair notice of what the . . . claim is and the grounds upon which it rests,” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations and internal quotation marks omitted)
(alteration in original), the plaintiff must provide “more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Id. (citation omitted).
To survive a motion to dismiss, the plaintiff must plead “factual content that allows the
court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678. Specifically, “[f]actual allegations must be enough to raise a right to
relief above the speculative level . . . .” Twombly, 550 U.S. at 555 (citations omitted). The
question is not whether the claimant will ultimately prevail, but whether the complaint is
“sufficient to cross the federal court’s threshold.” Skinner v. Switzer, 131 S. Ct. 1289, 1296
When deciding a Rule 12(b)(6) motion to dismiss, the Court may look only to the facts
alleged in the complaint and its attachments. See Jordan v. Fox, Rothschild, O’Brien & Frankel,
20 F.3d 1251, 1261 (3d Cir. 1994). The Court must accept as true all well-pleaded allegations in
the complaint and view them in the light most favorable to the plaintiff. Angelastro v.
Prudential-Bache Sec., Inc., 764 F.2d 939, 944 (3d Cir. 1985). Likewise, the Court must accept
as true all reasonable inferences that may be drawn from the allegations, and view those facts
and inferences in the light most favorable to the non-moving party. See Rocks v. City of Phila.,
868 F.2d 644, 645 (3d Cir. 1989). Nonetheless, the Court need not accept as true “unsupported
conclusions and unwarranted inferences,” Doug Grant, Inc. v. Greate Bay Casino Corp., 232
F.3d 173, 183-84 (3d Cir. 2000) (citations and internal quotation marks omitted), or the
plaintiff’s “bald assertions” or “legal conclusions,” Morse v. Lower Merion Sch. Dist., 132 F.3d
902, 906 (3d Cir. 1997) (citations and internal quotation marks omitted).
Hartford argues that the Canizareses’ bad-faith claim should be dismissed for failing to
allege sufficient facts entitling them to relief. To establish a claim for bad faith under 42 Pa.C.S.
8371, “a plaintiff must demonstrate that the insurer (1) lacked a reasonable basis for denying
benefits and (2) knew or recklessly disregarded its lack of a reasonable basis.” Atiyeh v. Nat'l
Fire Ins. Co. of Hartford, 742 F. Supp. 2d 591, 598 (E.D. Pa. 2010) (citing Toy v. Metro. Life
Ins. Co., 928 A.2d 186, 193 (Pa. 2007)). Allegations of mere negligence or bad judgment will
not suffice, but rather, a plaintiff is required to “show that the insurer breached its duty of good
faith through some motive of self-interest or ill will.” Id. (quoting Brown v. Progressive Ins.
Co., 860 A.2d 493, 501 (Pa. Super. Ct. 2004)). Any claim for bad faith must be supported by
clear and convincing evidence. Terletsky v. Prudential Prop. & Cas. Ins. Co., 649 A.2d 680, 688
(Pa. Super. Ct. 1994).
The Complaint contains six, rudimentary allegations related to the bad-faith claim, all of
which contain legal conclusions which are not entitled to the assumption of truth. The closest
the Complaint comes to alleging a specific fact regarding Hartford’s handling of the claim is that
Hartford “fail[ed] to respond to Plaintiffs’ claim for benefits within a reasonable period of time.”
Compl. 6. The Canizareses, however, fail to include any specific dates detailing when the claim
was submitted and when Hartford responded. Conclusory allegations of this nature are not
sufficient for a bad-faith claim to survive a motion to dismiss. Compare Atiyeh 742 F. Supp. 2d
at 599 (dismissing bad-faith claim where the plaintiff alleged that the defendant “(a) fail[ed] to
conduct a reasonable investigation, (b) den[ied] benefits to plaintiff without a reasonable basis,
(c) knowingly or recklessly disregard[ed] the lack of a reasonable basis to deny plaintiff's claim,
or (d) assert[ed] policy defenses without a reasonable basis”), with Padilla v. State Farm Mut.
Auto. Ins. Co., 31 F. Supp. 3d 671, 676 (E.D. Pa. 2014) (concluding that the plaintiff’s bad-faith
claim should proceed when the complaint alleged specifically a delay of five months before the
defendant made an offer to settle the claim and also that the defendant ignored multiple
communications from the plaintiff).
While the Canizareses argue, somewhat incongruously, that Pennsylvania pleading rules
should apply in this case, state pleading rules do not apply in federal court. See W. Run Student
Hous. Associates, LLC v. Huntington Nat. Bank, 712 F.3d 165, 169 (3d Cir. 2013) (applying
federal pleading rules to state law claims alleged in a case removed to federal court); Atiyeh, 742
F. Supp. 2d at 598 (“However, in federal court, state pleading requirements do not apply”). 3
The Canizareses argue that, because Hartford dedicated five pages of its brief to a
discussion of the bad-faith claim, Hartford must have sufficiently been put on notice of the
claim. Such an argument fails under the standards set forth in Twombly and Iqbal. Ultimately,
the Canizareses have failed to provide “more than labels and conclusions,” and it is well
established that “a formulaic recitation of the elements of a cause of action will not do.”
Twombly, 550 U.S. at 555 (citations omitted).
It may well be that facts will develop that would support a bad-faith claim. Indeed,
discovery into the handling of this claim will certainly be among the next steps in the case, and it
may well be that the Canizareses will seek permission to resume the bad-faith claim. They will
be permitted to seek such permission if the facts so warrant.
For the foregoing reasons, the Court grants the Hartford’s Motion to Dismiss as to Count
II of the Complaint without prejudice, allowing the Canizareses to reassert the bad-faith claim in
the event that they acquire appropriate evidence of Hartford’s bad faith through discovery.
BY THE COURT:
S/Gene E.K. Pratter
GENE E.K. PRATTER
UNITED STATES DISTRICT JUDGE
It is also unclear how the application of the Pennsylvania pleading rules would improve
the Canizareses’ position. See Rivera v. Dealer Funding, LLC, No. CV 15-6590, 2016 WL
1535759, at *3 (E.D. Pa. Apr. 15, 2016) (noting a defendant’s confusion between “the stricter
fact-pleading standards of the Pennsylvania Rules of Civil Procedure [and] the liberal pleading
requirements of Rule 8(a)” (emphasis added)).
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?