Davis v. Geico Gen. Ins. Co.
| Decision Date | 18 July 2013 |
| Docket Number | Civil Action No. 1:12–CV–2332. |
| Citation | 957 F.Supp.2d 544 |
| Parties | Michelle A. DAVIS, Plaintiff v. GEICO GENERAL INSURANCE COMPANY and Government Employees Insurance Company, Defendants. |
| Court | U.S. District Court — Middle District of Pennsylvania |
OPINION TEXT STARTS HERE
Kevin R. Lomupo, Gilardi, Cooper & Lomupo, Pittsburgh, PA, for Plaintiff.
Joseph A. Hudock, Jr., Summers McDonnell Hudock Guthrie & Skeel, Pittsburgh, PA, for Defendants.
AND NOW, this 18th day of July, 2013, upon consideration of the Report and Recommendation of United States Magistrate Judge Martin C. Carlson (Doc. 20), recommending that defendants' motion to dismiss (Doc. 13) be denied, and, following an independent review of the record, it appearing that neither party has objected to the magistrate judge's report and recommendation, and that there is no clear error on the face of the record,1see Nara v. Frank, 488 F.3d 187, 194 (3d Cir.2007) (), it is hereby ORDERED that:
1. The Report and Recommendation of Magistrate Judge Carlson (Doc. 20) are ADOPTED.
2. Defendants' motion to dismiss (Doc. 13) is DENIED. The Court finds that Pennsylvania law governs the plaintiff's bad-faith claim set forth in Count II of the complaint.
The above-captioned action is an insurance dispute over the defendant insurer's handling of the plaintiff's claim for underinsured motorist benefits for injuries sustained during an automobile accident in Altoona, Pennsylvania in 2009. The action comes before this Court on the basis of diversity of citizenship of the parties, as the amount in controversy exceeds $75,000, the plaintiff is a citizen of Pennsylvania and the defendants have their primary place of business in Maryland and Washington, D.C.
Defendants Geico General Insurance Company and Government Employees Insurance Company (“GEICO”) have moved to dismiss Count II of the complaint, in which the plaintiff brings a claim for bad faith pursuant to 42 Pa. Cons.Stat. Ann. § 8371. GEICO maintains that choice-of-law principles should compel this Court to conclude that the State of Delaware has a greater interest than the Commonwealth of Pennsylvania in seeing its laws enforced with respect to the pending insurance dispute between the parties. Noting that Delaware has no statutory cause of action for bad faith, GEICO insists that Delaware has the greatest interest in having its common law applied to the plaintiff's bad-faith claim, apparently because at the time of the accident, the injured motorist, and the plaintiff in this lawsuit, was a citizen of Delaware. Accordingly, GEICO argues that the plaintiff's claim for bad faith under Pennsylvania law should be dismissed, and that any bad faith claim should be limited to a claim under Delaware common law.
Ironically, the defendants make this argument, notwithstanding the fact that Delaware has no other meaningful connection to the events of this case, or the parties, and notwithstanding the fact that application of Delaware laws would potentially result in a diminished recovery for the only person in this lawsuit with any identified connection to the State of Delaware. GEICO also argues that Delaware has the predominant interest in this lawsuit, notwithstanding that the accident that forms the predicate for this lawsuit occurred in Altoona, Pennsylvania; that the plaintiff's claims for bad faith arose during negotiations that took place after the plaintiff moved to Pennsylvania; that the plaintiff's vehicles are presently garaged and registered in Pennsylvania; and that the bad-faith claim arises out of negotiations that were commenced in Pennsylvania through a Pennsylvania lawyer negotiating with a claims adjuster located in Virginia.
Because we believe that the undisputed facts of this case should cause the Court to find that the Commonwealth of Pennsylvania has the greater interest in seeing that its laws are applied to this insurance dispute involving one of its own citizens, and relating to an accident that occurred within the Commonwealth, we recommend that the Court deny GEICO's motion to dismiss on choice-of-law grounds.
The above-captioned action arises out of an automobile collision that occurred during the evening of June 13, 2009, in Altoona, Pennsylvania. While the plaintiff, Michelle Davis, was stopped at a traffic light, her vehicle was struck from behind by a vehicle driven by Dolores Verbonitz, a Pennsylvania resident. Ms. Davis sustained a number of serious injuries as a result of the collision.
The plaintiff settled her claim against the tortfeasor, who was insured by Erie Insurance Company; however, the tortfeasor's insurance coverage was allegedly insufficient to compensate the plaintiff adequately for the injuries she suffered.
At the time of the accident, the plaintiff was a resident of Delaware and was insured by GEICO. As part of her automobile policy, the plaintiff specifically elected to pay GEICO additional premiums in order to retain underinsured motorist (UIM) benefits. Sometime following the accident, but before she made a claim against GEICO under the policy, the plaintiff moved to the Commonwealth of Pennsylvania, where she is now domiciled.
The plaintiff first put GEICO on notice of her potential UIM claim in November, 2011, after she had moved to Pennsylvania. Thereafter, negotiations about the UIM dispute took place between the plaintiff's counsel, a Pennsylvania lawyer, and GEICO's adjuster, who was located in Fredericksburg, Virginia. Also following the accident, the plaintiff represents that she underwent rotator cuff surgery for injuries sustained as a result of the automobile accident, which was performed by an orthopedic specialist located in Altoona, Pennsylvania.
The plaintiff initiated this action on August 15, 2012, by filing a complaint for UIM benefits, and asserting a claim for bad faith under 42 Pa. Cons.Stat. Ann. § 8371. At the time she filed the complaint, and at all times through the filing of this report, the plaintiff was a resident of Alexandria, Pennsylvania.
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated, Hedges v. United States, 404 F.3d 744, 750 (3d Cir.2005), and dismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead “enough facts to state a claim to relief that is plausible on its face,” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (). The facts alleged must be sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955. This requirement “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence” of necessary elements of the plaintiff's cause of action. Id. at 556, 127 S.Ct. 1955. Furthermore, in order to satisfy federal pleading requirements, the plaintiff must “provide the grounds of his entitlement to relief,” which “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir.2008) (brackets and quotations marks omitted) (quoting Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955).
The defendants argue that the Court should conclude that Delaware law applies to the bad-faith claim asserted in this case. On the basis of this argument, the defendants move to dismiss the plaintiff's bad-faith claim on the grounds that Pennsylvania law is inapplicable to this case, and because Delaware law does not provide for a statutory cause of action for bad faith. It appears that the defendants are, in effect, attempting to foreclose the plaintiff from recovering attorney's fees as part of her bad-faith claim, and to make it more difficult for her to recover punitive damages.
Under Pennsylvania law, an insured that carries its burden of proof on a bad-faith claim against an insurer may recover interest, court costs, attorney's fees, and punitive damages. See42 Pa. Cons.Stat. Ann. § 8371. In contrast, Delaware does not provide a statutory cause of action for bad faith; instead, an insurer who fails to investigate a claim or delays payment to an insured “is in breach of the implied obligations of good faith and fair dealing underlying all contractual obligations.” Tackett v. State Farm Fire & Cas. Ins. Co., 653 A.2d 254, 264 (Del.1995). If a plaintiff bringing a bad-faith claim under Delaware law carries her burden of proof, she may recover general contract remedies, E.I. DuPont de Nemours & Co. v. Pressman, 679 A.2d 436, 446 (Del.1996), but generally may not recover attorney's fees, Casson v. Nationwide Ins. Co., 455 A.2d 361, 370 (Del.Super.Ct.1982).
Given this dissonance in the way in which Pennsylvania and Delaware treat bad-faith insurance claims, the parties agree that there is a conflict of laws that must be resolved in determining which state's law should apply to the plaintiff's claims in this case. The parties' briefs are, however, somewhat cursory in their review of the applicable law in this field, and we thus pause to summarize legal guidelines that govern this choice-of-law conflict.
In diversity cases, federal courts follow the conflict-of-laws rules of the State in which the court sits. Klaxon v. Stentor, 313 U.S. 487, 496, 61 S.Ct. 1020, 85...
To continue reading
Request your trial
-
Schwartz v. Accuratus Corp.
...its resident defendants, and California also had an interest because its rule protected its resident plaintiff); Davis v. Geico Gen. Ins. Co., 957 F.Supp.2d 544 (M.D.Pa.2013) (explaining that if all states were understood to have a general interest in seeing their law applied, the true/fals......
-
Schwartz v. Accuratus Corp.
...defendants, and California also had an interest because its rule protected its resident plaintiff); Davis v. Geico Gen. Ins. Co., 957 F.Supp.2d 544 (M.D.Pa.2013) (explaining that if all states were understood to have a general interest in seeing their law applied, the true/false conflict an......
-
NEEDREPLACE
...its resident defendants, and California also had an interest because its rule protected its resident plaintiff); Davis v. Geico Gen. Ins. Co., 957 F.Supp.2d 544 (M.D.Pa.2013) (explaining that if all states were understood to have a general interest in seeing their law applied, the true/fals......
-
CM Regent Ins. Co. v. CAMaster, Inc.
...Liability In diversity cases, federal courts follow the law of the State in which the court sits. Davis v. Geico Gen. Ins. Co., 957 F.Supp.2d 544, 548 (M.D. Pa. 2013). Thus, we are guided by Pennsylvania law in addressing this dispute. Pennsylvania has adopted the strict products liability ......