Opinion
Civil Action No. 04-3611.
November 15, 2004
ORDER
AND NOW, this 15th day of November, 2004, upon consideration of defendant's motion to dismiss (docket entry # 9) and plaintiff's response thereto, and the Court finding that:
The Court may grant a motion to dismiss under Rule 12(b)(6) "only if, accepting all well pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). In other words, we will not grant such a motion "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir. 2000) (permitting dismissal "only if it appears that the [plaintiffs] could prove no set of facts that would entitle [them] to relief"). "The complaint will be deemed to have alleged sufficient facts if it adequately put the defendants on notice of the essential elements of the plaintiffs' cause of action." Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996).
Even if the allegations are insufficient by themselves, we will still deny a motion to dismiss so long as the allegations "in addition to inferences drawn from those allegations, provide a basis for recovery."Menkowitz v. Pottstown Mem'l Med. Ctr., 154 F.3d 113, 124-125 (3d Cir. 1998); see also Scheuer, 416 U.S. at 236 ("[T]he allegations of the complaint should be construed favorably to the pleader."); Emerson v. Thiel College, 296 F.3d 184, 188 (3d Cir. 2002) ("A complaint will withstand an attack under Federal Rule of Civil Procedure 12(b)(6) if the material facts as alleged, in addition to inferences drawn from those allegations, provide a basis for recovery.").
(a) On November 21, 2001, cars driven by Feddie King and Steve Brown, both of whom were uninsured, collided with Joyce Eubanks's car, which was stopped at a red light;
Freddie King owned the car that he was driving, but Steve Brown was driving a car that Terrell Brown owned.
(b) At the time of the accident, Eubanks was covered by an automobile insurance policy that Amica Mutual Insurance Company ("Amica") had issued to her;
(c) In Eubanks's policy, Amica promised to "pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury: (1) Sustained by an insured; and (2) caused by an accident," Am. Compl. Ex. A, at 6 (PP 00 01 06 98); Am. Compl. Ex. A, at 1 (PP 04 23 12 98);
(d) Although the policy originally indicated that "[a]ny judgment for damages arising out of a suit brought without [Amica's] written consent is not binding on [Amica]," Am. Compl. Ex. A, at 6 (PP 00 01 06 98), an endorsement to the policy deleted that language and recognized that "[n]o judgment for damages arising out of a suit brought against the owner or operator of an uninsured motor vehicle is binding on [Amica] unless [Amica]: (1) Received reasonable notice of the pendency of the suit resulting in the judgment; and (2) Had a reasonable opportunity to protect [Amica's] interests in the suit," Am. Compl. Ex. A, at 1 (PP 04 23 12 98);
(e) Moreover, the policy provides for arbitration of disputes about (1) "[w]hether that insured is legally entitled to recover damages . . . from the owner or operator of an uninsured motor vehicle" and (2) "[a]s to the amount of damages which are recoverable by that insured . . . from the owner or operator of an uninsured motor vehicle," Am. Compl. Ex. A, at 8 (PP 00 01 06 98); Am. Compl. Ex. A, at 3 (PP 04 23 12 98);
(f) On September 24, 2002, Eubanks filed a civil action against King, Steve Brown, and Terrell Brown in the Philadelphia County Court of Common Pleas, Am. Compl. ¶ 15;
(g) When Steve Brown and Terrell Brown failed to answer the complaint, the Court of Common Pleas entered default judgments against each of them in the amount of $50,000, Am. Compl. ¶ 19;
(h) On June 10, 2004, the Court of Common Pleas entered a directed verdict against Steve Brown and Terrell Brown in the amount of $250,000, Am. Compl. ¶ 37;
(i) After obtaining the directed verdict, Eubanks submitted an $100,000 claim to Amica, and she initiated this lawsuit when Amica declined to pay the claim;
Although the policy appears to provide $300,000 of uninsured motorist protection, see Am. Compl. Ex. A, at 2 (Declarations for Personal Auto Policy No. 920437-2205), Eubanks appears to have believed that the policy limit was $100,000, see Compl. Ex. Q.
(j) Pennsylvania law requires insurance companies to provide uninsured motorist coverage, 40 Pa. Stat. Ann. § 2000(a) (2004), but it also permits an insurance company to limit its uninsured motorist liability in a case where its insured "prosecute[s] to judgment" the uninsured motorist to the amount to which the company consents in writing, 40 Pa. Stat. Ann. § 2000(e)(2) (2004);
(k) Although Amica argues that its option to include written consent limitations in its policies required Eubanks to obtain its written consent before "prosecut[ing] to judgment" her case against Steve Brown and Terrell Brown, see Def.'s Br. at 5, it is clear that the statute does not prevent Amica from writing policies "more favorable to its insured[s]" than the statute requires, 40 Pa. Stat. Ann. § 2000(f) (2004), and nothing in Eubanks's policy, as amended by the endorsements, required her to obtain Amica's written consent before prosecuting her case against Steve Brown and Terrell Brown to judgment, see supra ¶ (d);
(l) Thus, Eubanks's failure to obtain Amica's written consent to her suit against Steve Brown and Terrell Brown has no effect on Amica's alleged liability to Eubanks;
(m) Amica also requests that we dismiss this case because Eubanks allegedly agreed, in the policy, to arbitrate disputes over the "amount of damages," see supra ¶ (e), and Amica insists that it need not pay the $250,000 judgment that Eubanks obtained against Steve Brown and Terrell Brown;
Additionally, Amica suggests that, regardless of the language in the policy, Eubanks agreed to arbitrate this dispute. Am. Compl. ¶ 31. Because Eubanks rescinded her agreement to arbitrate the dispute, id. ¶ 39, and no statute or contract denied her the power to rescind it, Eubanks's conduct does not require us to dismiss this case.
(n) Amica and Eubanks clearly have a dispute as to what effect, if any, the Court of Common Pleas's judgment has on Amica's liability to Eubanks, but the arbitration agreement in the policy only covers disputes about the amount of damages that an insured could recover "from the owner or operator of an uninsured motor vehicle," Am. Compl. Ex. A, at 8 (PP 00 01 06 98); Am. Compl. Ex. A, at 3 (PP 04 23 12 98);
Indeed, Amica's motion to dismiss focuses principally on the reasons why we should not give that judgment preclusive effect here. Even if we accepted Amica's argument that it should not be bound to satisfy the $250,000 judgment against Steve Brown and Terrell Brown, we could not dismiss this case because we still would have to determine what amount Amica does owe to Eubanks.
(o) Because there is no dispute that Eubanks can recover $250,000 from Steve Brown and Terrell Brown, this case does not involve the type of dispute about which Eubanks and Amica agreed to arbitrate;
(p) We, therefore, shall not require Eubanks to arbitrate this case; and
(q) Finally, Amica contends that we should dismiss the bad faith claim that Eubanks asserts pursuant to 42 Pa. Cons. Stat. § 8371, but we decline to do so now because discovery may reveal evidence from which a reasonable jury could conclude that Amica acted in bad faith, see MGA Ins. Co. v. Bakos, 699 A.2d 751, 754 (Pa.Super.Ct. 1997) (explaining that a § 8371 claim requires "a showing by the insured that the insurer did not have a reasonable basis for denying benefits under the policy and that the insurer knew of or recklessly disregarded its lack of a reasonable basis in denying the claim");
It is hereby ORDERED that
1. Defendant's motion to dismiss is DENIED; and
2. By November 19, 2004, plaintiff shall FILE a hard copy of an appendix to the amended complaint and that appendix shall consist of the exhibits referenced in the amended complaint, separated by lettered tabs for our ease of reference; and
3. By December 1, 2004, defendant shall FILE an answer to the amended complaint.