RHOADES et al v. MID-CENTURY INSURANCE COMPANY et al

Filing 9

MEMORANDUM SIGNED BY HONORABLE JAN E. DUBOIS ON 7/27/18. 7/31/18 ENTERED AND COPIES E-MAILED. (va, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
GEORGE RHOADES and
JENNIFER RHOADES,
Plaintiffs,

CIVIL ACTION

v.
NO. 18-722
MID-CENTURY INSURANCE
COMPANY, and FARMERS INSURANCE
GROUP, INC.,
Defendants.
DuBois, J.

July 27, 2018
MEMORANDUM

I.

INTRODUCTION
This insurance dispute arises out of a motor vehicle accident involving plaintiff George

Rhoades (―plaintiff‖)1 and a third-party tortfeasor. Plaintiffs seek damages from defendants
Mid-Century Insurance Company (―Mid-Century‖) and Farmers Insurance Group, Inc.
(―Farmers‖) stemming from their refusal to pay underinsured motorist benefits to plaintiffs.
Presently before the Court is Defendants‘ Motion to Dismiss. For the reasons that follow, the
Motion is granted in part and denied in part.
II.

BACKGROUND
The facts as alleged in Plaintiffs‘ Complaint are as follows. On May 6, 2014, plaintiff

was employed as a captain in the Upper Darby Policy Department. Compl. ¶ 8. While in the
scope of his employment, plaintiff was involved in an automobile accident at the intersection of
Lansdowne and Huey Avenues in Drexel Hill, Pennsylvania. Compl. ¶ 9. At that time, a thirdparty tortfeasor drove into the intersection, ignoring a red traffic light, and struck plaintiff‘s
police vehicle. Compl. ¶ 10. As a result of the accident, plaintiff suffered injuries including, but
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The Court notes that Jennifer Rhoades, George Rhoades‘ wife, is also named as a plaintiff in the case. There is no
reference to Jennifer Rhoades in this Memorandum.

not limited to, traumatic brain injury, severe spinal injuries, and chronic cognitive dysfunction,
and will never work again as a police officer. Compl. ¶¶ 19, 28.
On February 23, 2014, plaintiff obtained automobile insurance from Mid-Century and/or
Farmers. Compl. ¶ 33. Plaintiff selected an insurance policy that included
uninsured/underinsured motorist coverage. Compl. ¶ 34. The policy limit for
uninsured/underinsured motorist coverage was $200,000. Compl. ¶ 35, Ex. A. Despite multiple
attempts by plaintiff, the parties have been unable to agree on the amount of underinsured
motorist benefits that plaintiff is entitled to recover. Compl. ¶¶ 41, 50.
Plaintiffs filed the Complaint in the Court of Common Pleas of Delaware County on
January 31, 2018, asserting the following claims: Count I) violation of Pennsylvania Unfair
Insurance Practices Act, 40 Pa. Stat. § 1171.1, et seq. (―UIPA‖); Count II) bad faith; Count III)
breach of contract/breach of fiduciary duty; Count IV) underinsured motorist claim; Count V)
violation of Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Stat.
§ 201.1, et seq. (―UTPCPL‖); and Count VI) loss of consortium.
Defendants filed a Notice of Removal on February 20, 2018, and a Motion to Dismiss on
February 22, 2018. Plaintiffs responded on March 8, 2018. The Motion is thus ripe for review.
For the reasons that follow, Defendants‘ Motion to Dismiss is granted in part and denied in part.
III.

APPLICABLE LAW
Rule 12(b)(6) of the Federal Rules of Civil Procedure provides that, in response to a

pleading, a defense of ―failure to state a claim upon which relief can be granted‖ may be raised
by motion to dismiss. To survive a motion to dismiss, the complaint must allege facts that
―‗raise a right to relief above the speculative level.‘‖ Victaulic Co. v. Tieman, 499 F.3d 227, 234
(3d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A complaint

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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 Twombly, 550 U.S.
at 570). A district court first identifies those factual allegations that constitute nothing more than
―legal conclusions‖ or ―naked assertions.‖ Twombly, 550 U.S. at 555, 557. Such allegations are
―not entitled to the assumption of truth‖ and must be disregarded. Iqbal, 556 U.S. at 679. The
court then assesses the remaining ―‗nub‘ of the plaintiff[‘s] complaint—the well-pleaded,
nonconclusory factual allegation[s]‖—to determine whether the complaint states a plausible
claim for relief. Id.
IV.

DISCUSSION
Defendants present two arguments in support of their Motion to Dismiss: (1) the Court

should dismiss Counts I and V of the Complaint because plaintiffs fail to allege that defendants
made a fraudulent representation; and (2) the Court should dismiss all claims against Farmers
because it did not issue the insurance policy and because it is a federally registered service mark
and not a legal entity that can be sued. The Court addresses each argument in turn.
A. Count I and V of the Complaint
Defendants argue that the Court should dismiss Counts I and V of the Complaint because
an insurance company can be liable under the UTPCPL only if a plaintiff shows that the
insurance company made a fraudulent representation and plaintiff relied on such representation.
On this issue, plaintiffs no not aver in the Complaint that defendants made any false
representations relating to the purchase of the insurance policy.
In Count I of the Complaint, plaintiffs assert a claim under the UIPA. Despite arguing
that the Court should dismiss Count I, defendants do not argue in their Motion to Dismiss that
plaintiffs failed to a state claim under the UIPA. Rather, defendants contend that plaintiffs failed

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to state a claim under the UTPCPL, asserted in Count V. Accordingly, the Court denies that part
of defendants‘ Motion seeking dismissal of plaintiffs‘ UIPA claim in Count I. The Court now
addresses plaintiffs‘ UTPCPL claim in Count V.
―Under Pennsylvania law, an insurer can be held liable under the [UTPCPL] . . . only if
there are fraudulent misrepresentations in order to sell a policy.‖ Fisher v. Aetna Life Ins.
& Annuity Co., 39 F.Supp.2d 508, 511 n.1 (M.D. Pa. 1998) (citing Aetna Cas. & Sur. Co. v.
Ericksen, 903 F.Supp. 836, 841 (M.D. Pa. 1995)). More specifically, a plaintiff alleging that an
insurer violated the UTPCPL must prove the five elements of a misrepresentation claim, which
are:
(1) a false representation of an existing fact or a non-privileged failure to disclose;
(2) materiality, unless the misrepresentation is intentional or involves a nonprivileged failure to disclose; (3) scienter, which may be either actual knowledge
or reckless indifference to the truth; (4) justifiable reliance on the
misrepresentation, so that the exercise of common prudence or diligence could not
have ascertained the truth; and (5) damage as a proximate result.
Id. at 511 (quoting Wittkekamp v. Gulf & Western, Inc., 991 F.2d 1137, 1142 (3d Cir.
1993)).
Plaintiffs do not aver that defendants made any false representations that induced
plaintiffs to purchase the insurance policy. Rather, plaintiffs assert claims predicated on
defendants‘ failure ―to pay Plaintiffs‘ Underinsured Motorist claim according to terms
and conditions of the Policy.‖ Compl. ¶ 67. The Court thus concludes that plaintiffs fail
to state a claim under the UTPCPL and grants without prejudice that part of defendants‘
Motion seeking dismissal of that claim in Count V of the Complaint.
B. Claims against Farmers
Defendants argue that all claims against Farmers should be dismissed because
Farmers did not issue the insurance policy and because Farmers is a federally registered
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service mark and not a legal entity that can be sued. Defendants cite to plaintiffs‘
insurance policy in support of their argument that Farmers did not issue the policy.
Compl. Ex. A; Defs.‘ Mot. to Dismiss Ex. B. The Farmers logo appears throughout the
policy. Compl. Ex. A; Defs.‘ Mot. to Dismiss Ex. B. The Court thus concludes that the
insurance policy does not establish that Farmers is not a proper party to this action.
Furthermore, defendants‘ argument that Farmers is not a legal entity that can be sued is
considered an affirmative defense improper for adjudication on a motion to dismiss for
failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). See
Rycoline Products, Inc. v. C&W Unlimited, 109 F.3d 883, 886 (3d Cir. 1997).2
Accordingly, the Court denies without prejudice that part of defendants‘ Motion seeking
dismissal of all claims against Farmers.
V.

CONCLUSION
For the foregoing reasons, Defendants‘ Motion to Dismiss is granted in part and denied in

part. The Court denies that part of defendants‘ Motion seeking dismissal of plaintiffs‘ UIPA
claim in Count I of the Complaint. The Court denies that part of defendants‘ Motion seeking
dismissal of all claims against Farmers without prejudice. The Court grants that part of
defendants‘ Motion seeking dismissal of plaintiffs‘ UTPCPL claim in Count V of the Complaint
without prejudice.
An appropriate order follows.

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The Court notes that United States District Judge William C. Conner in Country Rock Cafe, Inc. v. Truck
Insurance Exchange, 417 F.Supp.2d 399, 401–02 (S.D.N.Y. 2006) dismissed all claims against Farmers based on
documentary evidence that established it was a registered service mark, not a corporation licensed to transact
business.

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