JAMES v. STATE FARM

Filing 13

MEMORANDUM OPINION re: 3 MOTION to Dismiss filed by STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY. Signed by Judge William L. Standish on 3/1/2011. (md)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
WILLIAM E. JAMES,
Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. Civil Action No. 10-1482

MEMORANDUM OPINION

Pending before the Court is a motion to dismiss Count I of the Complaint, Insurance Civil filed by Defendant State ("State Farm") (Doc. Farm Mutual Automobile to Federal Dis.") denied Rule of

Company

pursuant No.3,

Procedure 12 (b) (6). discus below,

"Mot. is

For the without

reasons

Defendant's

motion

judice.
I. BACKGROUND

A.

Factual History According to the Complaint, William James had stopped ttsburgh, struck Pennsylvania, rear by

his

cle at a redlight in downtown 24, 2007, when his car was

on August

from the

another vehicle driven by Shauna Lynn McPherson. Ms. James' vehi e was covered by an automobile Farm pursuant to Pennsylvania

At the time, surance policy

issued by State

law i

the

policy

included under insured/uninsured motorist amount of $100,000. As a result of

("UIM") the

coverage in the Mr. James

accident,

sustained numerous injuries, some of which may be permanent. After obtaining State Farm's consent made a demand company r compensation the limits from of to settle, Ms. her Mr. James whose policy,

McPherson, automobile

insurance $25,000.

paid

Mr. James then sought compensation from State Farm for To date, State Farm has failed to

the remainder of his damages. provide that compensation. B. Procedural Background

Plaintiff filed suit in the Court of Common Pleas of Allegheny County on August 23, 2010, alleging in Count I that

State Farm had breached the contract of insurance by failing to compensate provisions wi thout a him of for his his injuries and in as Count requi II Pa. that Stat. by this Ann. the UIM

policy

refusal
§

reasonable basi s

violated 42

8371,

Pennsylvania Bad Fa Defendant October 8, 2010. received

h Statute. a copy of the complaint on or about

On November 5, 2010, State Farm timely removed
§§

case to this Court pursuant to 28 U.S.C. based on complete ater di versi ty than of the parties exclusive

1441 and 1446, an amount and

and of

controversy

$75,000,

interest

2

costs,

as

required

by

28

U.S.C.

§

1332. 1

Mr.

James

did

not

object to the removal. On November II, 2011, State Farm moved to dismiss Count I

of the Complaint, arguing that Plaintiff had failed to plead the breach of contract claim to the standard 544 established in Bell

Atlantic Corp. v. Twombly,

559 U.S.

(2007),

and its progeny. fed for

Plaintiff opposes the motion. their respective arguments,

The parties having fully br matter is ripe

consideration.

II.

JURISDICTION AND VENUE
As noted above, this Court has jurisdiction pursuant to 28

U.S.C. as a

§

1332.

Venue is appropriate in this District inasmuch part of the events g ng rise to the claim

substantial

occurred in this District.

28 U.S.C. § 1391 (a) (2).

III. STANDARD OF REVIEW
Federal Rule of Civil Procedure 8(a) requires contain. that a

pleading which (2) a short

"states a

claim for

relief must

and plain statement of the claim showing that the The Rule further provides that concise, Fed. R. and P. direct" 8(d). but "The

pleader is entitled to relief." "[e]ach allegation must be

simple,

"[n]o technical form is required."

Civ.

Defendant states, without objection from Plaintiff, that Mr. James is a citizen of Pennsylvania and State Farm is a corporation organized under the laws of the State of Illinois with its principal place of Notice of Removal, Doc. business located in Bloomington, Illinois. No. I, <Jl<Jl 9-10.

3

touchstone of Rule 8 (a) (2)

is whet

a complaint's statement of ief under the

facts is adequate to suggest an entitlement to

legal theory invoked and thereby put the defendant on notice of
the nature of the plaintiff's claim."

Antitrust Litig., *46, n.18 (3d

618 F.3d 300, 2010 U.S. App. LEXIS 17107, *45 Aug. 16, 2010)

)

Cir.

,

citing Twombly, 550 U.S. at 565, n.l0.

In the aftermath of Twombl 129 S. Ct. 1937, 173 L.

and 2d 868 (2009), and

U.S. the

interpretation of those two cases by the United States Court of the Appeals opinions, for the Third Ci standards t in a which series of precedential allow a complaint to

the

pleading

withstand a motion to dismiss pursuant to Procedure 12 (b) (6) have taken on slightly

ral Rule of Civil new parameters. (3d

Beginning in Phillips v. Cir. no 2008), longer

County of Allegheny,
r

515 F. 3d 224

the Court of Appeals not sufficient to allege mere e

'it is of a cause of

s cts

action;'

instead

'a

complaint must Phill

all 515

suggestive of
quo t in g

[the proscribed] Twombly,

conduct.'"

F. 3 d at 2 33 ,

550 U.S. at 563, n.8

(alteration in original.)

Because

"[c]ontext matters in notice pleading," that "some complaints will require at least

Court held some factual

allegations to make out a to relief,

'showing that the pI

r is entitled

in order to give the defendant
4

ir notice of what

the .

. claim is and the grounds upon which it rests.'" 550 U.S. at 555;

Id. ,

quoting Twombly,

see also McTernan v.

City of

York, 564 F.3d 636, In the Fowler v. of

646 (3d Cir. 2009). UPMC Shadyside, noted that 578 F.3d 203 (3d Cir. and 2009) Iqbal,

Court

Appeals

following that

Twombly "the

conclusory

"bare-bones"

allegations

defendant

unlawfully harmed me" no longer suffice.

A civil complaint must

now include "sufficient factual matter to show that the claim is facially plausible." 550 U. S. at and 555, Fowler, 578 F.3d at 210; a complaint formulaic

see also Twombly,
which offers of only the

holding

that or "a

"labels

conclusions"

recitation

elements of a cause of action will not do." Thus, a motion the current formulation of the standard of review for to dismiss under Rule 12(b) (6) asks the court to

determine if the plaintiff's claims are "plausible." has facial plausibility when the plaintiff pleads

"A claim factual

content that allows the court to draw the reasonable inference that Iqbal, Auto. the defendant Ct. at 583 is liable for the misconduct State 2009) ; alleged. " Farm Mut. Mayer v.

129 S. Ins.

1949; F.3d 230

see also Gelman v.
187, 190 (3d Cir.

Co. ,

Belichick, 20-1615, 2010) .

605 F.3d 223, 2010 U.S. App.

(3d Cir. 2010) ; and Bob v. Kuo, No. 14965,

LEXIS to

*

4 a

(3d

Cir. to

July

20,

"[W]hat

suffices

withstand

motion

dismiss

necessarily depends

on substantive law and the elements of the
5

specific claim asserted." LEXIS 17107, *46, n.18. factual less. 2010), detail to satis

~~~~~----~~~~

Broke

Antitrust,

2010 U.S.

App.

Some claims will demand relatively more this standard, Doe, whi others require (2d Cir.

See Arista Records LLC v.

604 F.3d 110, 120

stating that although the Supreme Court's recent Rule 8 did not heighten complaints to render alteration a pleading requirements, ctual Twombl y and

decisions Iqbal [where] quotation

held

that

"require claim in the

amplification ( Internal "Determining f will .

needed

plausible." original.)

omitted;

whether a complaint states a plausible claim for reI

. be a context-specific task that requires the reviewing court to draw on its
j udic

I

experience and common sense." App. LEXIS 17170 at *177,

Brokerage

Antitrust,

2010

U.S.

quoting Iqbal,

id.; McTernan, 577 F.3d at 530 (same.) In sum, the court must take three steps in determining the it must (1) note "the elements a identify allegations

sufficiency of the complaint:

plaintiff must plead to state a claim;" (2)

that "are no more than conclusions" and thus "are not entitled to the assumption of truth," and (3) assume the veracity if Sant of

well

leaded

factual

allegations

and

determine

they v. quoting

"plausibly give rise to an ent Warminster Iqbal, 129 S.Ct. 629 at F.3d, 1947.

lement for relief." 130 (3d Cir.

121,

2010),

"A complaint may not ly that the p
6

be dismissed

merely because it appears unli

intiff can prove

those

facts

or

will

ultimately

prevail

on

the

merits.

The

Supreme Court's formulation of the pleading standard in Twombly does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." omitted. ) determine McTernan, At if this 564 stage has F.3d of at the 646 (internal the his quotations Court claims, 213; must not

litigation, pled

Plaintiff

sufficiently Fowler, 578

whether he can prove them. Servo of Del. Valley, No.

F.3d at App.

Culinary

09-4182,

2010 u.S.

LEXIS 13485,

*10 (3d Cir. June 30, 2010).

IV.

DISCUSSION
As the the of a a parties agree, must to state a claim to for show: terms; (3) breach (1) of the (2) a

contract, existence breach of

plaintiff contract,

plead

facts its

including by the

essential and

duty

imposed

contract;

damages

resul ting from that breach. Motion to Dismiss, Doc. No.4,

(State

Farm's Brief in Support of Plaintiff's Doc. No.

"Def.'s Brief," at 4;

Brief in Opposition to State Farm's Motion to Dismiss, 12, at 3, both citing Pennsy. A.2d Bank, 1999).) 595, N.A. 600 v. Supply Inc. (Pa. Super. 723 v.

American Recycling 2006) , 1053,
quoting

Corp. ,

895

Ct. A.2d

Corestates Super. Ct.

Cutillo,

1058

(Pa.

The parties do not dispute that there was a

7

valid and en

rceable contract of insurance between themselves,

thus the first element is satisfied. Plaintiff also alleges that there is no question that Ms. McPherson $25,000 was her liable insurance the company juries paid to to him and that the the prior James

him,

with

approval of State Farm,

was inadequate to compensate Mr. s he sustained.

for the severe and permanent injur
<j[<j[

(Complaint,

7,

16,

19.)

The insurance poli cy 2 in effect at the date of uninsured motor vehicle coverage in the

the

accident

provides

amount of $100,000

for each person, (see

as evidenced by the letter Mot. of Dis., the Exh. A, at and 2.) is

"u" on the Declarations Page
This coverage is an essential

term

contract

adequately pled in Paragraph 3 of 8 through 15 of the Complaint, injuries, together with the

Complaint.

In Paragraphs

Plaintiff described his physical consequential damages he will

In deciding a motion to dismiss under Rule 12(b) (6), a court may generally consider only the complaint, exhibits attached thereto, and matters of public record. See Consolo Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). An exception to this rule is that the court may also consider "an undisputedly authentic document that a defendant attaches as an exhibit to dismiss if the plaintiff's claims are based on the document." rd. Defendant has attached to the motion to dismiss a copy of the policy issued to Mr. James, number 95 0835-B09-35A. This policy appears to cover the period January 22 through August 9, 2006, which does not include the date on which the accident occurred. However, a State Farm custodian of records certified that "[t]he policy was in effect on the loss date of August 24, 2007." (See Mot. Dis., Exh. A, at 1.) Plaintiff does not object to this exhibit and the Court will therefore consider its contents without converting the pending motion to a motion for summary judgment.

8

continue earning care. from

to capa

experience, y,

e.g.,

pain,

expense, and

diminution ongoing

of

physical

limitations,

medical

He has also alleged that he sought and received consent State Farm to accept the
err

$25,000 16), as

from

Ms.

McPherson's letter

insurance

company 18,

(Complaint, 2010,

evidenced by a a State

dated August

from Beverly Raker,

Farm Claim

representative, attached as Exhibit A to the Complaint. Plaintiff dr i ving damages an further alleges vehicle he that and was because because able to Ms. the McPherson value of was his her,

underinsured the

exceeds

$25,000

recover

from

State Farm has a duty to compensate him for those damages, up to the limit he to of the policy, i.e., $100,000. August thus 23, As 2010, its of the date on had the

which failed

filed

his

complaint, him and

Defendant duty under

compensate

breached

contract.

(Complaint, crrcrr 19-20.)

These factual allegations are pled in sufficient detail to satisfy the eading Auto. standards Ins.
Co.,

of

Twombly.

Compare

Rubin

v.

State Farm Mut. LEXIS motion 1613, to

CA No. Pa.

10 1651, Jan. 7,

2011 U.S. 2011), under

Dist.

*3-*6,

*11-*14 the

(W.O. of

denying similar

dismiss

breach

contract

claim

facts and argument. State Farm cites to the provisions of the insurance policy which provide that the insured and the company must agree on two issues, fault and amount, before State Farm is
9

required to pay

damages

r bodily injury to an insured.

(Mot.

Dis.,

~

4.)

The

same section provides that if either party does not consent to arbitrate or if the arbitrators s ected by the parties cannot

agree on a third arbitrator, the insured shall file suit against the uninsured mot amount of damages and not st and State Farm "to have a jury decide the that he is entitled to recover t from the

tort feasor , contract."

whether

State

Farm breached

insurance

(Def.'s Brief at 4.)

Defendant states that while at In by to

"was still obta 3), Mr. James State Farm

ng relevant information on the claim" led su alleging that Mr. breach James the of contract. the gun"

short,

argues

"j umped s

alleging

breach

of

contract

before

part

had

agreed

disagree on the fault and amount of damages. As the Court of Appeals concluded in a case involving

almost identical language from a State Farm insurance contract, the arbitration clause is the not triggered unless there is a to

disagreement

involving

insured's

legal

entitlement

collect damages or the amount of the damages. Auto. Ins. Co. v. Coviello, 233 F.3d 710, ul t 717

State Farm Mut. (3d Cir. 2000).

There appears both parties

to be no question of agree that Ms.

in this case because at a fault; neither over

McPherson there Thus,

was is

rty has

alleged or argued that James' damages.

disagreement

the amount of Mr.

at this point in the

10

litigation,

the Court cannot

termine if

arbitration clause

must be invoked. Plaintiff Whether that has properly alleged a breach terms of contract. insurance

claim is precluded by the

of the

contract or whether there are conditions precedent which must be satisfied before he may recover on that cIa the insurance policy to are matters is yet under the terms of to be determined. without

Defendant's

motion

dismiss

therefore

denied

prejudice and the argument may be raised aga time in the future. An appropriate Order follows.

at an appropriate

March

2011

jt&~ /J4u;{J;j " - - _
William L. Standish United States District Judge

I

11