Monck v. The Progressive Corporation et al
Filing
18
MEMORANDUM (Order to follow as separate docket entry) For the reasons discussed above, Defendants Motion to Dismiss (Doc. 5) is granted. Count Three for Good Faith and Fair Dealing, Count Four for Breach of Fiduciary Duty, Count Six for Unfair Trade Practices and Consumer Protection Law (UTPCPL), Count Seven for Negligence, and Count Eight for Vicarious Liability are dismissed. The UTPCPL claim (Count Six) is dismissed without prejudice; Counts Three, Four, Seven and Eight are dismissed with prejudice. Counts One, Two and Five go forward in their entirety. An appropriate Order is filed simultaneously with this action.re 5 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM Signed by Honorable Richard P. Conaboy on 4/13/15. (cc)
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
SHANNON MONCK,
:
:CIVIL ACTION NO. 3:15-CV-250
Plaintiff,
:
:(JUDGE CONABOY)
v.
:
:
THE PROGRESSIVE CORPORATION, :
THE PROGRESSIVE GROUP OF
:
INSURANCE COMPANIES, UNITED
:
FINANCIAL INSURANCE COMPANY, :
:
Defendants.
:
:
___________________________________________________________________
MEMORANDUM
Here we consider Defendants’ Motion to Dismiss (Doc. 5) filed
on February 11, 2015.
With this motion, Defendants seek dismissal
of several counts of Plaintiff’s eight-count Complaint (Doc. 1-1),
asserting that the counts for Underinsured Motorist Benefits (Count
One), Breach of Contract (Count Two), and Insurance Bad Faith
(Count Five) provide an adequate remedy for Plaintiff’s claim for
insurance benefits for any misconduct in relation to the handling
of her underinsured motorist’s claim.
(Doc. 5 at 2.)
For the
reasons discussed below, we conclude Defendants’ motion is properly
granted.
I. Background
This matter arises as a result of Plaintiff’s involvement in
an automobile accident on or about July 8, 2013.
9.)
(Doc. 1-1 ¶¶ 7-
Plaintiff was a passenger in a car driven by Christopher
O’Brien.
(Doc. 1–1 ¶ 9.)
The O’Brien vehicle failed to stop at a
stop sign and was struck by a vehicle operated by Joseph
Migatulski.
(Id.)
Plaintiff claims that she sustained serious
permanent injuries as a result of the collision.
(Doc. 1-1 ¶ 10.)
O’Brien had two third party liability automobile insurance
policies with a combined total of $80,000.
((Doc. 1-1 ¶ 22.)
The
full amount of liability coverage was tendered and disbursed among
seven parties who were injured as a result of the accident.
(Id.)
Plaintiff received $16,000 which she claims to be insufficient to
compensate her for her injuries.
(Id.)
On August 14, 2013, Plaintiff’s counsel requested that
Defendant United Financial Casualty Company open a claim for
underinsured motorist benefits and requested that an adjuster
contact Plaintiff’s counsel.1
(Doc. 1-1 ¶ 36; Doc. 6 at 2.)
Defendant issued a policy of insurance to Plaintiff’s aunt and
uncle, Mary Martin and Roland Marro, which was in effect at the
relevant time.
(Doc. 1-1 ¶ 14.)
Plaintiff asserts that she is an
insured under the policy which had $100,000 (stacked) in
underinsured motorist benefits available to her under the policy.
(Doc. 1-1 ¶ 21.)
With three vehicles insured under the policy,
Plaintiff claims that a total of $300,000 of coverage is available
to her.
(Id.)
Plaintiff maintains she is an insured under the
policy because she meets the definition of “relative” in that she
1
Defendants note that Plaintiff incorrectly identifies
United Financial Casualty Company as United Financial Insurance
Company. (Doc. 6 at 1.)
2
was living with Mary Martin and Roland Marro at the time of the
accident.
(Doc. 1-1 ¶¶ 16-20.)
Defendant disputed Plaintiff’s
residency claim and advised Plaintiff’s counsel on March 12, 2014,
that Plaintiff’s claim was being denied because she did not reside
at the policy address.
(Doc. 1-1 ¶ 42.)
As a result of the failure to pay her claim for underinsured
motorist benefits, Plaintiff filed her Complaint in the Court of
Common Pleas of Lackawanna Count on or about January 15, 2015.
(Doc. 12 at 11.)
Defendants removed the case to this Court on
February 6, 2015.
(Doc. 1.)
As noted above, Defendants’ Motion to
Dismiss (Doc. 5) was filed on February 11, 2015.
motion was accompanied by a supporting brief.
Defendants’
(Doc. 6.)
Plaintiff
filed her opposition brief (Doc. 12) on March 17, 2015, after
requesting and being granted an extension of time within which to
do so (Docs. 8, 9).
With the filing of Defendants’ reply brief
(Doc. 17) on March 31, 2015, the motion was fully briefed and
became ripe for disposition.
II. Discussion
A.
Motion to Dismiss Standard
In a motion to dismiss for failure to state a claim, the
defendant bears the burden of showing that no claim has been
presented.
Hedges v. United States, 404 F.3d 744, 750 (3d Cir.
2005) (citing Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406,
1409 (3d Cir. 1991)).
Courts are directed to “accept all factual
3
allegations as true, construe the complaint in the light most
favorable to the plaintiff, and determine whether, under any
reasonable reading of the complaint, the plaintiff may be entitled
to relief.”
Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d
Cir. 2008).
When reviewing a complaint pursuant to a defendant’s motion to
dismiss for failure to state a claim filed under Federal Rule of
Civil Procedure 12(b)(6), the court does so in the context of the
requirement of Federal Rule of Civil Procedure 8(a)(2) which
requires only “a short and plain statement of the claims showing
that the pleader is entitled to relief.”
The “short and plain
statement” must be sufficient to “give the defendant fair notice of
what the plaintiff’s claim is and the grounds upon which it rests.”
Conley v. Gibson, 355 U.S. 41, 47 (1957), abrogated on other
grounds by Bell Atlantic Corp. v. Twombly, 550 U.S. 433 (2007).
Twombly confirmed that more is required than “labels and
conclusions, and a formulaic recitation of the elements of a cause
of action will not do.”
550 U.S. at 555 (citing Papasan v. Allain,
478 U.S. 265, 286 (1986) (on a motion to dismiss, courts “are not
bound to accept as true a legal conclusion couched as a factual
allegation”)).
“Factual allegations must be enough to raise a
right to relief above the speculative level on the assumption that
all allegations in the complaint are true (even if doubtful in
fact).”
550 U.S. at 555 (citations omitted).
4
In McTernan v. City of York, 577 F.3d 521, 530 (3d Cir. 2009),
the Third Circuit Court of Appeals set out the standard applicable
to a motion to dismiss in light of the United States Supreme
Court’s decisions in Twombly, 550 U.S. 433 (2007), and Ashcroft v.
Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009).
“[T]o survive a motion to dismiss, a
complaint must contain sufficient factual
matter, accepted as true to ‘state a claim
that relief is plausible on its face.’”
Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550
U.S. at 570). The Court emphasized that
“only a complaint that states a plausible
claim for relief survives a motion to
dismiss.” Id. at 1950.
McTernan, 577 F.3d at 530.
Iqbal explained that “[a] claim has
facial plausibility when the plaintiff pleads 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.
McTernan discussed the effects of Twombly and Iqbal in detail
and provided a road map for district courts presented with a motion
to dismiss for failure to state a claim in a case filed just a week
before McTernan, Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir.
2009).
[D]istrict courts should conduct a two-part
analysis. First, the factual and legal
elements of a claim should be separated. The
District Court must accept all of the
complaint’s well-pleaded facts as true, but
may disregard any legal conclusions. [Iqbal,
129 S. Ct. at 1949.] Second, a District
Court must then determine whether the facts
5
alleged in the complaint are sufficient to
show that the plaintiff has a “plausible
claim for relief.” Id. at 1950. In other
words, a complaint must do more than allege a
plaintiff’s entitlement to relief. A
complaint has to “show” such an entitlement
with its facts. See Philips [v. Co. of
Alleghany], 515 F.3d [224,] 234-35 [(3d
Cir.2008 )]. As the Supreme Court instructed
in Iqbal, “[w]here the well-pleaded facts do
not permit the court to infer more than the
mere possibility of misconduct, the complaint
has alleged--but it has not ‘show[n]’--‘that
the pleader is entitled to relief.’” Iqbal,
129 S. Ct. at 1949. This “plausibility”
determination will be “a context-specific
task that requires the reviewing court to
draw on its judicial experience and common
sense.” Id.
Fowler, 578 F.3d at 210-11.
The Circuit Court’s guidance makes clear that legal
conclusions are not entitled to the same deference as well-pled
facts.
As noted above, “the court is ‘not bound to accept as true
a legal conclusion couched as a factual allegation.’” Guirguis v.
Movers Specialty Services, Inc., No. 09-1104, 2009 WL 3041992, at
*2 (3d Cir. Sept. 24, 2009) (quoting Twombly, 550 U.S. at 555) (not
precedential).
Finally, the district court must extend the plaintiff an
opportunity to amend before dismissing a complaint unless amendment
would be inequitable or futile.
See Grayson v. Mayview State
Hosp., 293 F.3d 103, 108 (3d Cir. 2002).
B.
Defendants’ Motion
With their Motion to Dismiss, Defendant’s seek dismissal of
6
five counts contained in Plaintiff’s eight-count complaint: Count
Three for “Good Faith and Fair Dealing,” Count Four for “Breach of
Fiduciary Duty,” Count Six for “Unfair Trade Practices and Consumer
Protection Law” (“UTPCPL”), Count Seven for “Negligence,” and Count
Eight for “Vicarious Liability.”
(Doc. 5 at 2.)
The remaining
counts are Count One for Underinsured Motorist Benefits, Count Two
for Breach of Contract, and Count Five for Insurance Bad Faith.
(Id.)
For the reasons discussed below, we conclude Defendants’
motion is properly granted.
1.
Good Faith and Fair Dealing
Defendants assert that Plaintiff’s claim for Breach of Duty of
Good Faith and Fair Dealing (Count Three) should be stricken
because it is redundant to her Count Two Breach of Contract Claim
and Count Five Bad Faith Claim.
(Doc. 6 at 5-6.)
We agree.
As recently discussed in Cicon v. State Farm Mutual Automobile
Insurance Co., Civ. A. No. 3:14-CV-2187, 2015 WL 926148, at *2-3
(M.D. Pa. Mar. 4, 2015), an independent claim for breach of the
covenant of good faith and fair dealing is properly dismissed where
the plaintiff brings a claim for first party insurance benefits and
the complaint includes claims for breach of contract and bad faith.
In response to Defendants’ argument that the claim for Breach
of Duty of Good Faith and Fair Dealing should be stricken as
redundant, Plaintiff argues that “Federal District Courts have
recognized the existence of a cause of action for breach of the
7
implied covenant of good faith and fair dealings in both third
party and first party insurance claims.”
(Doc. 12 at 13 (citing
Zaloga v. Provident Life And Accident Insurance Co. of America, 671
F. Supp. 2d 623, 629 (M.D. Pa. 2009); Smith v. Allstate Insurance
Co., 904 F. Supp. 2d 5151, 521-22 (W.D. Pa. 2012)).)
Plaintiff
also urges the Court to follow Guthrie Clinic, Ltd. v. Travelers
Indem. Co. of Illinois, Civ. A. No. 3:00-CV-1173, 2000 WL 1853044
(M.D. Pa. Dec. 18, 2000), asserting the case recognized that the
breach of the duty of good faith and fair dealing is a valid cause
of action in this district.
(Doc. 12 at 15.)
In Cicon, this Court clearly discounted reliance on Zaloga for
the proposition again presented here.2
See 2015 WL 926148, at *3.
Smith offers no support for Plaintiffs’ position that a separate
claim based on the duty of good faith and fair dealing implied in a
contract exists here.
Rather, Smith acknowledged that “in
Pennsylvania, a duty of good faith and fair dealing is implicit in
an insurance contract,” 904 F. Supp. 2d at 521 (listing cases), and
noted that the defendant correctly argued that “claims for breach
of the contractual duty of good faith and fair dealing have been
dismissed where [the plaintiff] also asserts a claim for breach of
contract and [the plaintiff’s] claims for breach of the duty of
good faith and fair dealing is redundant,” id. at 522 (citing inter
2
Counsel for the plaintiffs is the same in both cases and
Cicon was decided before Plaintiffs’ filed their opposition brief
here. Plaintiffs make no argument that Cicon is distinguishable.
8
alia Simmons v. Nationwide Mut. Fire Ins. Co., 788 F. Supp. 2d 404,
409 (W.D. Pa. 2011) (explaining that where plaintiff alleges
defendant breached “duty of good faith and fair dealing by denying
first party benefits under an insurance policy, said claim is
subsumed by the plaintiff’s breach of insurance contract claim
premised on the same conduct”)).
In Smith, the plaintiff did not assert a separate claim for
breach of contract, nor had she previously settled a claim for
breach of contract.
904 F. Supp. 2d at 522.
Here Plaintiff
asserts a claim for breach of contract (Count Two) within which she
alleges that the conduct complained of constitutes a breach of the
policy’s implied covenant of good faith and fair dealing (Doc. 1-1
¶ 69) and Count Three for “Good Faith and Fair Dealing” relies upon
the same conduct (id. ¶ 73).
Therefore, under the facts of this
case, Plaintiff’s claim for good faith and fair dealing is subsumed
into her breach of contract claim.
While Plaintiff urges that the
Court rely on Guthrie, 2000 WL 1853044, we decline to do so as
Plaintiff has not presented any argument to undermine the more
recent Zaloga and Smith and the cases relied upon therein.
Further, as noted in Bukofski v. USAA Casualty Insurance Company,
Civ. A. No. 3:08-CV-1779, 2009 WL 1609402, at *5 (M.D. Pa. June 9,
2009), Guthrie dealt with third party claims and was decided many
years prior to relevant Pennsylvania court decisions.
2.
Unfair Trade Practices and Consumer Protection Law
Defendants next assert that Plaintiff’s claim for a violation
9
of Pennsylvania’s Unfair Trade Practices and Consumer Protection
Law (“UTPCPL”) should be dismissed on three bases: Plaintiff failed
to allege facts to support justifiable reliance on Defendants’
alleged misconduct; a UPTCPL claim is barred by the economic loss
doctrine; and there are no facts to support a claim for
misfeasance.
(Doc. 6 at 5-13.)
Noting that she brings her claim
under UTPCPL’s “catch-all provision,” 73 P.S. § 201-2(4)(xxi),
Plaintiff maintains that Defendants’ arguments are without merit
and her UTPCPL claim is not subject to dismissal.
(Doc. 12 at 17-
30.)
The UTPCPL provides that “[u]nfair methods of competition and
unfair or deceptive acts or practices in the conduct of any trade
or commerce as defined by . . . this act . . . are hereby declared
unlawful.”
73 P.S. § 201-3.
The Supreme Court of Pennsylvania has
stated that “the UTPCPL is to be liberally construed to effectuate
its objective of protecting the consumers of this Commonwealth from
fraud and unfair or deceptive business practices.”
Continental Ins. Co., 932 A.2d 877, 881 (Pa. 2007).
Ash v.
As explained
in Gardner v. State Farm Fire and Cas. Co., 544 F.3d 553 (3d Cir.
2008),
the UTPCPL is designed to protect the public
from fraud and deceptive business practices.
Pirozzi v. Penskie Olds-Cadillac-GMC, Inc.,
413 Pa. Super. 308, 605 A.2d 373, 375 (1992).
The statute provides a private right of
action for “[a]ny person who purchases . . .
goods or services primarily for personal,
family or household purposes and thereby
10
suffers any ascertainable loss of money or
property” on account of the seller’s unfair
or deceptive practices. 73 P.S. § 2019.2(a).
544 F.3d at 564.
“To bring a private cause of action under the
UTPCPL, a plaintiff must show that he justifiably relied on the
defendant’s wrongful conduct or representation and that he suffered
harm as a result of that reliance.”
Yocca v. Pittsburgh Steelers
Sports, Inc., 854 A.2d 425, 438 (Pa. 2004); see also Hunt v. U.S.
Tobacco Co., 538 F.3d 217, 221 (3d Cir. 2008).
In a private
action, a plaintiff must show that she suffered “an ascertainable
loss as a result of the defendant’s prohibited action.”
v. Sun Co., Inc., 777 A.2d 442, 446 (Pa. 2001).
Weinberg
The catch-all
provision of the UTPCPL defines as an unfair or deceptive practice
“[e]ngaging in any other fraudulent or deceptive conduct which
creates a likelihood of confusion or misunderstanding.”
73 P.S. §
201-2(4)(xxi).
a.
Justifiable Reliance
Defendant first argues that Plaintiff’s UTPCPL claim fails
because she cannot establish that she relied on Progressive’s
alleged misconduct and that she suffered damage as a result of that
reliance, and there are no set of facts under which she could
establish the requisite element because the alleged misconduct
occurred after the purchase of the policy at issue.
7.)
(Doc. 6 at 6-
Plaintiff asserts that justifiable reliance is no longer a
required element of a UTPCPL claim, and even if justifiable
11
reliance is required, she has sufficiently pled the element.
(Doc.
12 at 17-23.)
Relying on Pennsylvania law, the Court of Appeals for the
Third Circuit has repeatedly found that a private plaintiff
pursuing a claim under the UTPCPL must prove justifiable reliance.
Smith v. State Farm Mut. Auto. Ins. Co., 506 F. App’x 133, 137 (3d
Cir. 2012) (not precedential) (citing Hunt v. U.S. Tobacco Co., 538
F.3d 217, 221, 224 (3d Cir. 2008)).
“This requirement derives from
the statutory requirement that a plaintiff suffer loss ‘as a result
of’ the defendant’s deception.”
Smith v. State Farm Mut. Auto.
Ins. Co., Civ. A. No. 11-7589, 2012 WL 508445, at *4 (E.D. Pa. Feb.
16, 2012).
Because justifiable reliance is a necessary element for
standing under the UTPCPL’s private-plaintiff standing provision,
and reliance cannot be presumed,” dismissal of a UTPCPL claim is
proper if the plaintiff does not allege actions pursued on the
basis of the alleged wrongful conduct.
Smith, 506 F. App’x at 136
(citing Hunt, 538 F.3d at 227).
Plaintiff argues that a plaintiff bringing a claim under the
catch-all provision no longer need prove the elements of common law
fraud, including justifiable reliance.
(Doc. 12 at 17-18 (citing
Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d
145, 151 (Pa. Super. Ct. 2012); Fazio v. Guardian Life Ins. Co. of
America, 62 A.3d 396, 409-10 (Pa. Super. Ct. 2012)).)
While the issue of the need to allege justifiable reliance
12
when asserting a defendant engaged in deceptive conduct under the
UTPCPL’s catch-all provision, 73 P.S. § 201-2(4)(xxi), has been
debated in the Superior Court of Pennsylvania, a recent decision of
that court clarifies that a plaintiff must always allege
justifiable reliance in a UTPCPL private cause of action, including
when a plaintiff alleges deceptive conduct.
Kern v. Lehigh valley
Hospital, Inc., 108 A.3d 1281, 1288-89 (Pa. Super. Ct. 2015)
(discussing post-1996 UTPCPL amendment history on issue of
justifiable reliance).
Kern explained that
the element of justifiable reliance under the
UTPCPL is the product of both (a) the
Legislature’s intent not to do away with
traditional elements of reliance and
causation under the UTPCPL, and (b) the
express provision under 201-9.2 that requires
a private action plaintiff to prove an
“ascertainable loss . . . as a result of the
use or employment by any person of a method,
act or practice declared unlawful” under
Section 201-3 [of] the UTPCPL. 83 P.S. §
201-9.2(a) (emphasis added). See also
Weinberg, Schwartz [v. Rockey, 932 A.2d 885
(Pa. 2007)], supra. Accordingly, the element
of justifiable reliance always was a part of
private actions under the statutory language
of the UTPCPL. Amendments in 1996 that added
deceptive conduct to the catchall provision
simply included other conduct that did not
require proof of all elements of common-law
fraud. See Bennett, supra.
108 A.3d at 1289.
Having established that Plaintiff is required to show
justifiable reliance in relation to her UTPCPL claim, we now
proceed to the question of whether she has sufficiently pled this
13
element.
Defendant argues that Plaintiff cannot establish any set
of facts under which Plaintiff can establish this element because
Progressive’s alleged misconduct could only occur after the
purchase of the insurance policy at issue.
(Doc. 6 at 7.)
Plaintiff asserts that she has properly pled justifiable reliance:
1) her Complaint alleges not only misconduct related to Defendants’
handling and investigation of her claim, but also contains numerous
other allegations of wrongdoing, including that Defendants made
false or fraudulent statements related to the application for
insurance; and 2) her Complaint contains allegations that she
justifiably relied on the promises made by Defendants to pay
underinsured motorist benefits.
(Doc. 12 at 21-22.)
First, we note that Plaintiff could not justifiably have
relied on the way Defendants handled her claim.
“On ‘issues such
as liability, damages, coverage or even procedure, [UIM] claims . .
. are inherently and unavoidably arm’s length and adversarial.’”
Smith, 2012 WL 508445, at *4.
Regarding Plaintiff’s other allegations of UTPCPL wrongdoing,
we conclude the conduct cited by Plaintiff (Doc. 12 at 21) lacks
the specificity required to survive Defendants’ motion to dismiss.
Plaintiff presents only conclusory allegations of alleged
wrongdoing and her related reliance.
(See Doc. 12 at 21-22.)
For
example, Plaintiff does not identify the false or fraudulent
statements allegedly made related to the application for insurance
14
or how she relied upon them; she does not identify how confusion
was created, how advertising was misleading, or how Defendants
failed to comply with the written terms of a guarantee or how she
relied upon any of this allegedly wrongful conduct.
(Id.)
Because
Plaintiff has not alleged actions pursued on the basis of the
allegedly wrongful conduct and this is a necessary element of her
UTPCPL claim, this claim is properly dismissed.
506 F. App’x at 137.
See, e.g., Smith,
Furthermore, contrary to Plaintiff’s
assertion that justifiable reliance is presumed in cases such as
hers, Smith specifically stated that “reliance cannot be presumed”
in a UTPCPL private plaintiff action.
506 F. App’x at 137.
Plaintiff has not satisfied the Twombly/Iqbal standard of
pleading, and therefore her UTPCPL claim is properly dismissed.
However, because we cannot say that Plaintiff can produce no set of
facts related to pre-investigation conduct which could support a
UTPCPL claim, we will allow her an opportunity to amend her
Complaint as to this claim.3
b.
Economic Loss Doctrine
Defendants next argue that Plaintiff’s UTPCPL claim must be
dismissed because it is barred by the economic loss doctrine
“‘which prohibits plaintiffs from recovering in tort economic
3
We further note that to the extent Plaintiff alleges that
Defendants engaged in fraudulent conduct (see, e.g., Doc. 1-1 ¶
60(jjj); Doc. 12 at 21), she is under a heightened burden to allege
with particularity the circumstances constituting fraud pursuant to
Federal Rule of Civil Procedure 9(b).
15
losses to which their entitlement flows only from a contract.’”
(Doc. 6 at 9 (quoting Werwinski, v. Ford Motor Co., 286 F.3d 661,
664 (3d Cir. 2002)).)
Plaintiff asserts that her UTPCPL claim is
not barred by the doctrine: the Pennsylvania Supreme Court has not
decided the issue; the economic loss doctrine applies only to
claims involving purely economic losses and Plaintiff also alleges
physical and emotional injuries; the Pennsylvania Superior Court
has expressly rejected the application of the doctrine to UTPCPL
claims; and Federal Courts have questioned the application of the
doctrine to UTPCPL claims.
(Doc. 12 at 22-27 (citations omitted).)
Despite the parties’ extensive discussion of this issue, we
decline to further address the application of the economic loss
doctrine to Plaintiff’s UTPCPL claim at this time as we have
determined that the claim is properly dismissed.
In Puggi v.
Allstate Property and Casualty Insurance Co., Civ. A. No. 11-2996,
2011 WL 2982990, at *3 n.4 (E.D. Pa. July 22, 2011), the court
followed this approach in the context of a UTPCPL claim based on
failure to pay UIM benefits where the court had determined the
claim was properly dismissed but granted an opportunity to amend.
The court did so because it was unclear whether the plaintiff would
be able to aver a sufficient UTPCPL claim and “there is a
suggestion from some courts that the nature of the intentional
misconduct at issue in the UTPCPL may be determinative of whether
the economic loss doctrine applies.
16
Id. (citing Martin v. Ford
Motor Co., 765 F. Supp. 2d 673, 684 (E.D. Pa. Feb. 15, 2011)).)
c.
Misfeasance
Defendants assert that a UTPCPL claim requires a party to
allege malfeasance (the improper performance of a contractual
obligation) while Plaintiff has alleged only nonfeasance (an
insurer’s refusal to pay a claim).
omitted).)
(Doc. 6 at 11-13 (citations
misfeasance.
Plaintiff asserts that she has sufficiently alleged
(Doc. 12 at 27-30.)
Because we grant Defendants’
motion to dismiss Plaintiff’s UTPCPL claim and allow her an
opportunity to amend, further discussion of this issue is not
appropriate at this time as any determination must be based on the
contours of the specific claim asserted.
3.
Gist of the Action Doctrine
Defendants next argue that Plaintiff’s claims for Breach of
Fiduciary Duty (Count Four) and Negligence (Count Seven) are barred
by the gist of the action doctrine in that they are wholly
dependent on the terms of the insurance policy.
(Doc. 6 at 13.)
Plaintiff maintains that the gist of the action doctrine does not
bar these claims.
(Doc. 12 at 30-34.)
The gist of the action doctrine has been described as follows:
[P]ersuasive authority interpreting
Pennsylvania law has restated the gist of the
action doctrine in a number of similar ways.
These courts have held that the doctrine bars
tort claims: (1) arising solely from a
contract between the parties; (2) where the
duties allegedly breached were created and
grounded in the contract itself; (3) where
17
the liability stems from a contract; or (4)
where the tort claim essentially duplicates a
breach of contract claim or the success of
which is wholly dependent on the terms of the
contract.
eToll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10, 19 (Pa.
Super. Ct. 2002) (internal quotations and citations omitted).
As recently decided by this Court in Cicon v. State Farm Mut.
Auto. Ins. Co., Civ. A. No. 3:14-CV-2187, 2015 WL 926148 (M.D. Pa.
Mar. 4, 2015), the gist of the action doctrine barred a plaintiff’s
negligence claim in the context of the plaintiff’s request for UIM
benefits where the plaintiff’s complaint included allegations of
improper investigation and handling of the claim.
2015 WL 926148,
at *3-4; see also Bukofski v. USAA Casualty Insurance Company, Civ.
A. No. 3:08-CV-1779, 2009 WL 1609402, at *6 (M.D. Pa. June 9,
2009).
Plaintiff’s counsel having made the same argument in Cicon,
Plaintiff does not distinguish this case from that decision, nor
does Plaintiff point to facts in this case which differ from those
found relevant in Cicon.
distinguish the cases.
We find no basis upon which to
Therefore, consistent with our Cicon
decision, we conclude Plaintiff’s Negligence claim (Count Seven) is
properly dismissed.4
4
Pennsylvania courts have recognized that the gist of the
action doctrine may not apply to claims for fraud in the
inducement. eToll, 811 A.2d at 17 & n.7; see also Advanced Tubular
Products, Inc. v. Solar Atmosphere, Inc., 149 F. App’x 81, 85 (3d
Cir. 2005) (not precedential); McWalters v. State Farm Mut Auto.
Ins. Co., Civ. A. No. 10-4289, 2011 WL 2937417, at *4 (E.D. Pa.
July 21, 2011); Lombardi v. Allstate Insurance Co., Civ. A. No. 0818
Similarly, Plaintiff’s Breach of Fiduciary Duty claim is
dependent on the insurance contract and is subject to dismissal
because it is redundant of the breach of contract claim.
Tippett
v. Ameriprise Ins. Co., Civ. A. No. 14-4710, 2015 WL 1345442, at *7
(E.D. Pa. Mar. 25, 2015) (citing Tubman v. USAA Casualty Ins. Co.,
943 F. Supp. 2d 525, 531 (E.D. Pa. Apr. 30, 2013)); see also
Bukofski, 2009 WL 1609402, at *6.
Having determined that
Plaintiff’s Breach of Fiduciary Duty claim is properly dismissed,
we need not decide whether an insurer owes a fiduciary duty to an
insured in the context of a UIM claim though several district
courts have addressed this issue and found that an insurer does not
assume a fiduciary duty toward an insured for UIM claims.
See,
e.g., Tubman, 943 F. Supp. 2d at 528.
4.
Vicarious Liability
Defendants last argument is that Plaintiff’s claim for
Vicarious Liability should be dismissed because Defendants’ agents
and employees cannot be liable to Plaintiff.
(Doc. 6 at 16.)
Plaintiff responds that she has sufficiently pled a claim for
vicarious liability
Asserting that “[i]n Pennsylvania, ‘an employer is vicariously
liable for the negligent acts of his employee which cause injuries
to a third-party, provided that such acts were committed during the
949, 2009 WL 1811540, at *8 (W.D. Pa. June 23, 2009).
Plaintiff has not sufficiently pled such fraud.
19
However,
course of and within the scope of the employment,’” (Doc. 12 at 36
(quoting Valles v. Albert Einstein Medical Center, 758 A.2d 1238,
1244 (Pa. Super. Ct. 2000)), Plaintiff maintains that Defendants
are responsible for the actions of their agents including Mary
Kennedy, the person to whom Plaintiff’s UIM claim was assigned
(Doc. 12 at 36; Doc. 1-1 ¶ 36).
Plaintiff avers that “regardless
of the existence of a contractual relationship between Plaintiff
and Defendants [sic] agents and or employees, the Defendants remain
liable for the gross, negligent, intentional, fraudulent, and
deceitful conduct of its agents and employees.”
(Doc. 12 at 36.)
Having determined that Plaintiff has not presented facts which
would give rise to an independent claim for negligence, Plaintiff’s
claim for vicarious liability is properly dismissed.
Plaintiff’s
contract related claims are based on allegations of wrongdoing by
Defendants’ agents and or employees, and Defendants are liable for
the wrongdoing of these individuals under contract theory.
See
Cicon, 2015 WL 926148, at *4 n.4; see also Tippett, 2015 WL
1345442, at *5.
Because there is no authority supporting an
independent relationship between an insurer’s agents and or
employees and an insured, no vicarious liability can be found.
2015 WL 1345442, at *5; see also Hudock v. Donegal Mut. Ins. Co.,
264 A.2d 668 (Pa. 1970).
III. Conclusion
For the reasons discussed above, Defendants’ Motion to Dismiss
20
(Doc. 5) is granted.
Count Three for “Good Faith and Fair
Dealing,” Count Four for “Breach of Fiduciary Duty,” Count Six for
“Unfair Trade Practices and Consumer Protection Law” (“UTPCPL”),
Count Seven for “Negligence,” and Count Eight for “Vicarious
Liability” are dismissed.
The UTPCPL claim (Count Six) is
dismissed without prejudice; Counts Three, Four, Seven and Eight
are dismissed with prejudice.
in their entirety.
Counts One, Two and Five go forward
An appropriate Order is filed simultaneously
with this action.
S/Richard P. Conaboy
RICHARD P. CONABOY
United States District Judge
DATED: April 13, 2015
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