Legos v. Travelers Casualty Company of Connecticut et al

Filing 14

MEMORANDUM (Order to follow as separate docket entry) re 3 MOTION to Dismiss.Signed by Honorable James M. Munley on 12/19/16. (sm)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
RONALD LEGOS,

:
No. 3:16cv1917
Plaintiff
:
:
(Judge Munley)
v.
:
:
TRAVELERS CASUALTY COMPANY OF
:
CONNECTICUT,
:
Defendant
:
:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
MEMORANDUM
Plaintiff Ronald Legos (hereinafter “plaintiff”) asserts a state law
underinsured motorist claim against his insurance company, Defendant
Travelers Casualty Company of Connecticut (hereinafter “Travelers”).
Before the court for disposition is Travelers’s motion to dismiss plaintiff’s
underinsured motorist claim pursuant to Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim upon which relief can be granted. For
the reasons that follow, the court will deny Travelers’s motion to dismiss.
Background
On April 29, 2003, plaintiff and Willard Grasavage (hereinafter
“Grasavage”) drove separate automobiles on Route 435 in Elmhurst
Township, Pennsylvania. (Doc. 1-13, Compl. (hereinafter (“Compl.”) ¶ 4).
While driving, Grasavage steered his automobile into plaintiff’s lane of
travel and collided with plaintiff’s automobile. (Id.) As a result of the

accident, plaintiff sustained significant bodily injuries to his shoulder, neck,
and back, including a right shoulder strain/sprain with exacerbation of
degenerative joint disease. (Id.)
Three years after the accident, plaintiff filed a negligence complaint
against Grasavage on July 17, 2006. (Id. ¶ 7). Soon thereafter, on
August 29, 2006, plaintiff filed an underinsured motorist (hereinafter
“UIM”) claim with Travelers. (Id. ¶ 8). In addition to filing his UIM claim
with Travelers, plaintiff also provided Travelers with his medical records
and income tax filings. (Id. ¶ 9). Travelers, however, failed to provide
plaintiff a good faith evaluation or written offer to settle his UIM claim. (Id.)
On March 7, 2012, plaintiff signed a document releasing Grasavage
from liability in exchange for $75,000. (Doc. 3-2, Ex. A, tortfeasor release
dated 3/7/12). Plaintiff provided Travelers with a copy of the signed
release on March 29, 2012. (Compl. ¶ 10). Plaintiff also requested
Travelers consent to settle and waive subrogation rights. (Id.)
No activity occurred on plaintiff’s UIM claim with Travelers until
December 2, 2014. (Id. ¶ 11). On this date, plaintiff, responding to a
Travelers inquiry, advised Travelers that he still sought UIM damages and
directed Travelers not to close their file. (Id.) Additionally, plaintiff

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provided Travelers with updated medical information. (Id.)
The parties next communicated on April 27, 2016, when plaintiff
received a letter from Travelers. (Id. ¶ 12). Travelers claimed that the
statute of limitations on plaintiff’s UIM claim had run. (Id.) Thus, Travelers
advised plaintiff that it closed his UIM file. (Id.)
Plaintiff immediately corresponded with Travelers on April 28, 2016,
asserting that the statute of limitations on plaintiff’s UIM claim had not run
and to not close plaintiff’s UIM file. (Id. ¶ 13). Plaintiff also filed a writ of
summons and petition to compel appointment of a neutral arbitrator in the
Lackawanna County Court of Common Pleas on April 28, 2016. (Id.
¶¶ 14-15).
On August 29, 2016, plaintiff filed a single-count complaint asserting
a state law breach of contract claim. (Doc. 1, Notice of Removal ¶ 8).
Travelers removed the case to this court on September 20, 2016.
Subsequent to removal, Travelers moved to dismiss plaintiff’s complaint
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The
parties have briefed their respective positions and the matter is ripe for
disposition.

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Jurisdiction
The court has jurisdiction pursuant to the diversity statute, 28 U.S.C.
§ 1332. Plaintiff Ronald Legos is a citizen of Pennsylvania. (Compl. ¶ 1).
Defendant Travelers Casualty Company of Connecticut is incorporated
under the laws of the State of Connecticut with its principal place of
business in Connecticut. (Doc. 1, Notice of Removal ¶ 13). Additionally,
the amount in controversy exceeds $75,000. Because complete diversity
of citizenship exists among the parties and the amount in controversy
exceeds $75,000, the court has jurisdiction over the case. See 28 U.S.C.
§ 1332 (“district courts shall have original jurisdiction of all civil actions
where the matter in controversy exceeds the sum or value of $75,000,
exclusive of interest and costs, and is between . . . citizens of different
States[.]”); 28 U.S.C. § 1441 (stating that a defendant can generally
remove a state court civil action to federal court if the federal court would
have had original jurisdiction to address the matter pursuant to the
diversity jurisdiction statute). As a federal court sitting in diversity, the
substantive law of Pennsylvania applies to the instant case. Chamberlain
v. Giampapa, 210 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v.
Tompkins, 304 U.S. 64, 78 (1938)).

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Legal Standard
Travelers filed a motion to dismiss plaintiff’s complaint under Federal
Rule of Civil Procedure 12(b)(6). The court tests the sufficiency of the
complaint’s allegations when considering a Rule 12(b)(6) motion. All wellpleaded allegations of the complaint must be viewed as true and in the
light most favorable to the non-movant to determine whether, “‘under any
reasonable reading of the pleadings, the plaintiff may be entitled to relief.’”
Colburn v. Upper Darby Twp., 838 F.2d 663, 665-66 (3d Cir. 1988)
(quoting Estate of Bailey by Oare v. Cnty. of York, 768 F.2d 503, 506 (3d
Cir. 1985)). The plaintiff must describe “‘enough facts to raise a
reasonable expectation that discovery will reveal evidence of’ [each]
necessary element” of the claims alleged in the complaint. Phillips v.
Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 556 (2007)). Moreover, the plaintiff must
allege facts that “justify moving the case beyond the pleadings to the next
stage of litigation.” Id. at 234-35. In evaluating the sufficiency of a
complaint, the court may also consider “matters of public record, orders,
exhibits attached to the complaint and items appearing in the record of the
case.” Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384

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n.2 (3d Cir. 1994) (citations omitted). The court need not accept legal
conclusions or unwarranted factual inferences. See Curay-Cramer v.
Ursuline Acad. of Wilmington, Del., Inc., 450 F.3d 130, 133 (3d Cir. 2006)
(citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.
1997)).
Discussion
Travelers moves to dismiss plaintiff’s UIM claim, contending
Pennsylvania’s four-year statute of limitations precludes this claim.
Plaintiff avers he commenced his UIM claim within the limitations period.
At this juncture, prior to the development of a full factual record and
viewing plaintiff’s allegations as true, we agree with the plaintiff that he
may have filed his UIM claim within the limitations period.
Pennsylvania law provides a four (4) year statute of limitations on all
UIM claims. 42 PA. CONS. STAT. ANN. § 5525. The Pennsylvania
Supreme Court, however, has not determined when the four-year statute
of limitations begins to run on UIM claims. Predicting how the
Pennsylvania Supreme Court would rule, the Third Circuit Court of
Appeals held that the four-year statute of limitations on UIM claims
“begins to run when the insured settles his claim or obtains an award from

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the underinsured driver.” State Farm Mut. Ins. Co. v. Rosenthal, 484 F.3d
251, 254 (3d Cir. 2007). The Pennsylvania Superior Court adopted
Rosenthal’s holding in a subsequent case, stating that “the four-year
statute of limitations on underinsured motorist claims begins to run when
the insured settles with, or secures a judgment against, the underinsured
owner or operator.” Hopkins v. Erie Ins. Co., 65 A.3d 452, 459 (Pa.
Super. Ct. 2013).
Both the Third Circuit and Superior Court noted that this holding
“harmonizes the law with respect to the statute of limitations involving
uninsured and underinsured claims.” Rosenthal, 484 F.3d at 257;
Hopkins, 65 A.3d at 458. Specifically, “regardless of whether the adverse
driver is uninsured or underinsured, the date on which the statute begins
to run is essentially the same, i.e. the date on which the insured
definitively ascertains the deficient insured status of the adverse driver.”
Rosenthal, 484 F.3d at 257; Hopkins, 65 A.3d at 458 (emphasis added).
At issue in the instant matter is when plaintiff definitively ascertained
the deficient insured status of the adverse driver. Plaintiff avers that,
given the release’s language and the timing of the settlement payment, he
definitively ascertained the deficient status of the adverse driver on or

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about April 30, 2012. (Compl. ¶¶ 10-11, 13, 22). Specifically, plaintiff’s
complaint and brief in opposition to Travelers’s motion to dismiss, while
not models of clarity, aver the statute of limitation began on April 30, 2012,
or soon thereafter, when plaintiff received the settlement monies. (Id.
¶¶ 10, 13, 22; Doc. 7, Pl.’s Br. in Opp’n at 11). As such, plaintiff timely
commenced this action within the four-year limitations period on April 28,
2016 by filing a writ of summons and petition to compel appointment of a
neutral arbitrator in the Lackawanna County Court of Common Pleas.
Travelers argues plaintiff ascertained the deficient insured status of
the adverse driver on March 7, 2012–the date plaintiff signed the release
to “settle” with Willard Grasavage. Plaintiff, therefore, had four (4) years,
until March 7, 2016, to file a UIM action. Because plaintiff filed this case
on April 28, 2016, fifty-two (52) days after the limitations period expired on
March 7, 2016, plaintiff’s UIM claim is untimely.
To support its position that the UIM limitations period begins to run
from the date an insured “settles” with an adverse driver, Travelers cites to
Rosenthal and Hopkins. In Rosenthal, the parties agreed that the case
“settled” on June 9, 2003. 484 F.3d at 252, 257. Similarly, in Hopkins, the
parties agreed that the case “settled” on December 4, 2004. 65 A.3d at

8

459. Thus, the date on which the insured definitively ascertained the
deficient insured status of the adverse driver in these cases was the
agreed-upon “settled” date.
Unlike Rosenthal and Hopkins, however, the parties in the instant
matter disagree on when the case “settled”. As previously stated,
Travelers asserts the case “settled” on the date plaintiff signed the
tortfeasor release–March 7, 2012. Plaintiff contends the case “settled”
when he received the settlement check–on or about April 30, 2012. That
is, plaintiff definitively ascertained the deficient insured status of the
adverse driver, and therefore “settled” his case, on the date he received
the settlement monies.
At this early stage of litigation, the court finds that plaintiff has made
sufficient allegations supporting his contention that he definitively
ascertained the deficient insured status of the adverse driver on or about
April 30, 2012. Thus, Travelers’s motion to dismiss plaintiff’s complaint
will be denied.1
1

Travelers also cites to Wilson v. Great American Insurance Group,
No. 12-cv-5700, 2013 WL 5786180 (E.D. Pa. Oct. 28, 2013) for the
proposition that settlement occurs when the release is signed. (Doc. 9,
Def.’s Br. in Supp. at 8-9). Wilson, however, addressed the issues of
when a case “settles” for the purposes of commencing the statute of
limitations on a UIM claim at summary judgment. As such, the court in
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Conclusion
For the above-stated reasons, the court will deny Travelers’s motion
to dismiss plaintiff’s complaint. An appropriate order follows.

Date: 12/19/2016

s/ James M. Munley
JUDGE JAMES M. MUNLEY
United States District Court

Wilson had the benefit of a full factual record to determine the date on
which the insured definitively ascertained the deficient insured status of
the adverse driver. Thus, Travelers may raise this issue again at the
conclusion of discovery in a motion for summary judgment.
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