Devine v. Geico General Insurance Company

Filing 13

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE JOHN M. GALLAGHER ON 1/6/22. 1/7/22 ENTERED AND COPIES E-MAILED.(dt)

Case 5:21-cv-02679-JMG Document 13 Filed 01/07/22 Page 1 of 6
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
__________________________________________
ANDREW DEVINE,

:
:
:
:
:
:
:

Plaintiff,
v.

Civil No. 5:21-cv-02679-JMG

GEICO GENERAL INSURANCE COMPANY,
Defendant.
__________________________________________

MEMORANDUM OPINION
GALLAGHER, J.
I.

January 6, 2022

OVERVIEW
On May 10, 2021, Plaintiff sued Defendant GEICO General Insurance Company in the Court of

Common Pleas of Philadelphia County, Pennsylvania, alleging breach of contract, bad faith, and violation
of the Unfair Trade Practice and Consumer Protection Law (“UTPCPL”). Compl. ¶¶ 21, 32, 35, 37, ECF
No. 1. On June 15, 2021, the case was removed to this Court. Defendant now moves to dismiss Plaintiff’s
complaint as being legally insufficient and barred by the statute of limitations. Motion to Dismiss (“MTD”)
4, 6-7, ECF No. 4-1. For the reasons that follow, the Court grants Defendant’s motion.
II.

FACTUAL BACKGROUND AND ALLEGATIONS
On September 5, 2015, Plaintiff suffered serious injuries in a motorcycle collision in Allentown,

Pennsylvania. Compl. ¶ 4. At that time, Plaintiff had a motor vehicle insurance policy with Defendant that
provided underinsured motorist insurance coverage of $50,000. Id. at ¶ 6(c). On September 29, 2015,
Plaintiff “notified Defendant that they should open an underinsured motorist claim.” Id. at ¶ 7. On October
19, 2015, Defendant denied this claim based on the “household vehicle exclusion,” stating that “[t]his
coverage does not apply to bodily injury while occupying or from being struck by a vehicle owned or leased
by you or a relative that is not insured for underinsured motorist coverage under this policy.” Id. at ¶ 8;
Compl. Exh. D. Defendant noted in this letter that the motorcycle was insured by Progressive and not
covered under Defendant’s underinsured motorist coverage policy. Id.

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Plaintiff took no further action until November 4, 2019, over four years later, when he contacted
Defendant “with a demand for underinsured motorist benefits in light of our Supreme Court’s decision in
Gallagher.” Compl. ¶ 12. On November 13, 2019, Defendant denied Plaintiff’s demand as time barred.
Compl. ¶ 14; Compl. Exh. H. On May 10, 2021, Plaintiff filed this lawsuit, arguing that he is entitled to
damages for breach of contract and bad faith, citing the Pennsylvania Supreme Court’s 2019 decision in
Gallagher which held that “the household vehicle exclusion violates the [Motor Vehicle Financial
Responsibility Law] therefore these exclusions are unenforceable as a matter of law.” Gallagher v. GEICO
Indemnity Company, 201 A.3d 131, 138 (Pa. 2019); Compl. ¶ 11.
III.

LEGAL STANDARD
A complaint may be dismissed for “failure to state a claim upon which relief can be granted.” FED.

R. CIV. P. 12(b)(6). “To 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 facially plausible
“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. (citing Twombly, 550 U.S. at 556). “Although the
plausibility standard does not impose a probability requirement, it does require a pleading to show more
than a sheer possibility that a defendant has acted unlawfully.” Connelly v. Lane Const. Corp., 809 F.3d
780, 786 (3d Cir. 2016) (internal quotation marks and citations omitted).
“While affirmative defenses should generally be raised in an answer to a complaint, the Third
Circuit permits a limitations defense to be raised by a motion under Rule 12(b)(6), but only if the time
alleged in the statement of a claim shows that the cause of action has not been brought within the statute of
limitations.” O’Brien v. GEICO Employees. Ins. Co., 2019 U.S. Dist. LEXIS 110914, at *4 (E.D. Pa. July
3, 2019) (internal quotation marks and citation omitted); see also Wisniewski v. Fisher, 857 F.3d 152, 157
(3d Cir. 2017) (citing Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014)) (“[a] complaint is subject to

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dismissal for failure to state a claim on statute of limitations grounds only when the statute of limitations
defense is apparent on the face of the complaint.”)
IV. ANALYSIS
Defendant first requests that the Court dismiss this action because Plaintiff’s breach of contract and
bad faith claims are barred by the statute of limitations. The statute of limitations defense is apparent on the
face of Plaintiff’s complaint. In Pennsylvania, the statute of limitations for a breach of contract claim is
four years. 42 Pa. C.S.A. § 5525. “Ordinarily, a statute of limitations begins to run from the moment the
potential plaintiff has a ‘complete and present cause of action.’” Disabled in Action v. SEPTA., 539 F.3d
199, 209 (3d Cir. 2008) (quoting Bay Area Laundry & Dry-Cleaning Pension Trust Fund v. Ferbar
Corp., 522 U.S. 192, 195 (1997)). “For the purposes of uninsured or underinsured motorist claims, the
running of the statute of limitations is commenced upon an alleged breach, which . . . would be occasioned
by the insurer's denial of coverage.” O’Brien, 2019 U.S. Dist. LEXIS 110914, at *4-5 (internal quotation
marks and citations omitted); see also Erie Ins. Exch. v. Bristol, 174 A.3d 578 (Pa. 2017); Legos v.
Travelers Cas. Co. of Connecticut One of the Travelers Ins. Companies, 2018 WL 4928963, at *3 (M.D.
Pa. Oct. 11, 2018).
Defendant denied Plaintiff’s underinsured motorist claim on October 19, 2015. The statute of
limitations for this claim therefore expired four years later, on October 19, 2019. Plaintiff waited over a
year after the limitations period to file his Complaint on May 10, 2021. 42 Pa. C.S.A. § 5525; Compl. ¶ 8.
As a result, his breach of contract claim is time barred.
Plaintiff attempts to argue that the statute began running not when his claim was denied, but when
he ultimately demanded payment. However, he provides no pertinent support for this argument. Plaintiff
also tries to sidestep the statute of limitations by classifying Defendant’s denial as an “anticipatory breach”
but again cites no relevant case law to support this theory.
Next, Plaintiff alleges that Defendant “acted in bad faith and breached its [common law] contractual
duties of good faith and fair dealing.” Comp. ¶ 35. In Pennsylvania, the common law violation of good faith

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and fair dealing has been construed as a contractual claim with its four-year statute of limitations. See
Healthfleet Ambulance Inc. v. Markel Ins. Co. 2020 WL 4201618 at *3-4 (E.D. Pa. July 22, 2020)
(“[b]ecause Pennsylvania courts have held that the common law duty of good faith and fair dealing is
implied in every contract, such contractual bad faith claims are a species of a breach of contract claim and
cannot exist separate and apart from a breach of contract claim.”). For the same reason this Court dismissed
Plaintiff’s breach of contract claim, so too will this claim be denied.
Plaintiff next alleges a statutory bad faith claim. “Claims for bad faith under 42 Pa. C.S.A. § 8371
are subject to a two-year statute of limitation.” O’Brien, 2019 U.S. Dist. LEXIS 110914, at *7; see also
Healthfleet Ambulance Inc., 2020 WL 4201618, at *4 (“statutory bad faith claims are subject to a two-year
statue of limitations.”); Mail Quip, Inc. v. Allstate Ins. Co., 388 F. Supp. 3d 433 (E.D. Pa. 2019) (“[A]n
action under § 8371 is a statutorily-created tort action and [the Supreme Court of Pennsylvania has] h[e]ld
such an action is subject to the two-year statute of limitations.”) (citing Ash v. Cont'l Ins. Co., 593 Pa. 523,
536, (2007)). Thus, Plaintiff’s statutory bad faith claim expired on October 19, 2017. Plaintiff again
attempts to allege that the relevant date for the statute of limitations is his November 13, 2019 demand for
benefits. Compl. ¶ 17. And again, Plaintiff’s failure to timely challenge the 2015 denial of his benefits claim
does not allow him to challenge it “post-Gallagher.” See O’Brien, 2019 U.S. Dist. LEXIS 110914, at *7.
Even if Plaintiff’s statutory bad faith claim was not time-barred, it is legally inadequate. In the
insurance context, to survive a motion to dismiss, a plaintiff must plead specific facts and cannot simply
rely on conclusory statements to sustain a bad faith claim. See Smith v. State Farm Mut. Auto. Ins. Co., 506
F. App'x 133, 136 (3d Cir. 2012). The Third Circuit has “routinely dismissed bad faith claims reciting only
bare-bones conclusory allegations that are not accompanied by factual allegations sufficient to raise the
claims to a level of plausibility required to survive a Rule 12(b)(6) motion to dismiss.” Jones v. Allstate Ins.
Co., 2017 WL 2633472, at *2 (E.D. Pa. June 19, 2017); also see Eley v. State Farm Ins. Co., 2011 WL
294031, at *4 (E.D. Pa. Jan. 31, 2011) (granting motion to dismiss a bad faith claim that relied on “barebones” allegations devoid of factual specificity); Robbins v. Metro. Life Ins. Co. of Conn., 2008 WL

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5412087 (E.D. Pa. Dec. 24, 2008) (dismissing a bad faith claim that failed to provide sufficient facts to
suggest that insurer lacked a reasonable basis for the denial of the benefits).
Here, Plaintiff alleges no factual specificity indicating the lack of a reasonable basis for denying
the UIM coverage. Plaintiff simply enumerates a series of conclusory allegations such as: Defendant
“engaged in unreasonable, bad faith claims handling practices with respect to Plaintiff’s claim,” “engaged
in unreasonable, bad faith investigative practices with respect to Plaintiff’s income loss claim,” and “acted
with ill will, malicious intent, and self-motive in handling Plaintiff’s claim.” Compl. ¶ 35 (a-s), ¶ 37 (a-s).
“Such conclusory allegations are insufficient to state a plausible claim of good faith.” O’Brien, 2019 U.S.
Dist. LEXIS 110194, at *9.
Finally, Plaintiff claims a violation of the UTPCPL arguing that Defendant had an “affirmative
duty to notify” him of the changes in the law following the Gallagher decision. Compl. ¶ 24. There is “no
support in Pennsylvania law for such an extraordinary duty.” Yoder v. Am. Travellers Life Ins. Co., 2002
PA Super 398 at *P15 (2002) (finding no support under Pennsylvania law for proposition that insurer must
inform insured of statutory changes that affect her policy). Further, “the caselaw that is analogous is to the
contrary.” Id. Courts that have addressed the issue of whether a company has a duty to inform its customers
of a change in the law have uniformly held that no such duty exists. 1
IV.

CONCLUSION
Defendant’s motion to dismiss is granted. Plaintiff’s breach of contract and bad faith claims are

barred by the statute of limitations and his claim of violation of the UTPCPL fails because Defendant has
no affirmative duty to notify Plaintiff of changes in the law. This dismissal is with prejudice as further

For example, see Treski v. Kemper Nat'l Ins. Cos., 449 Pa. Super. 620, 674 A.2d 1106 (1996) (finding insurers had
no duty to inform Pennsylvania insureds that a New Jersey statute may limit full tort recovery); Kilmer v. Erie Ins.
Co. 407 Pa. Super. 245, 252-53 (1991) (holding that the insurers had no duty to explain to its insured the extent,
policy exclusions, and limits of coverage).
1

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amendments would be futile. See Phillips v. Cty. of Allegheny, 515 F.3d 224, 236 (3d Cir. 2008). An
appropriate order will follow.

BY THE COURT:
/s/ John M. Gallagher
JOHN M. GALLAGHER
United States District Court Judge

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