Doe v. Provident Life and Acc. Ins. Co.

• Decision Date: 15 August 1996
• Docket Number: Civil Action No. 96-3951.
• Parties: John DOE, a fictitious name, Plaintiff, v. PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

936 F. Supp. 302

John DOE, a fictitious name, Plaintiff, v. PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.

Civil Action No. 96-3951.

United States District Court, E.D. Pennsylvania.

August 15, 1996.

Ronald H. Surkin, Media, PA, L. Keith Lipman, Richard, DiSanti, Gallagher, Schoenfeld & Surkin, P.C., Media, PA, for plaintiff.

Richard L. McMonigle, Jr., McKissock & Hoffman, P.C., Philadelphia, PA, for Defendant.

MEMORANDUM

LOWELL A. REED, Jr., District Judge.

Plaintiff John Doe¹ has brought this action against defendant Provident Life and Accident Insurance Company alleging that defendant has improperly and in bad faith refused to pay benefits owed to plaintiff under three disability policies issued by defendant. This Court has jurisdiction pursuant to 28 U.S.C. § 1332 as the parties are of diverse citizenship and the amount in controversy is in excess of $50,000, exclusive of interest and costs.

Currently before the Court is the motion by defendants to dismiss Count I of the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)") and to strike a portion of Count II pursuant to Federal Rule of Civil Procedure 12(f) ("Rule 12(f)"). (Document No. 9) For the following reasons, the motion will be granted.

I. FACTUAL BACKGROUND

The following facts are based upon the well-pleaded allegations of the complaint. See Miree v. DeKalb County, 433 U.S. 25, 27 n. 2, 97 S.Ct. 2490, 2492 n. 2, 53 L.Ed.2d 557 (1977).

In the late 1980's, plaintiff purchased three "own occupation, non-cancellable" disability insurance policies issued by defendant. At the time, plaintiff was employed as a trial lawyer and had been so employed for many years. Plaintiff has consistently paid all of the premiums due under these policies.

On November 17, 1993, plaintiff became disabled when he sustained serious injuries in an automobile accident. After reviewing information submitted by plaintiff and his treating physician, defendant agreed that plaintiff was totally disabled, as defined in the policies, from performing the duties of a trial attorney due to the physical injuries suffered in that accident. Defendant therefore paid plaintiff the benefits owed to him under the policies from the date of the accident to July 1994.

In July 1994, plaintiff applied to have his benefits continued due to the fact that he remained totally disabled from performing his duties as a trial lawyer because of the severe clinical depression that he was experiencing in the wake of the automobile accident. After reviewing the information submitted by plaintiff and his treating psychiatrist, Jan W. Doeff, M.D., defendant agreed that plaintiff continued to be totally disabled from performing his duties as a trial lawyer and therefore continued to pay plaintiff the benefits owed to him under the policies.

Shortly thereafter, defendant began requiring plaintiff to submit on a monthly basis a new application for benefits and a new report from Dr. Doeff. Plaintiff and Dr. Doeff complied with these requirements and continue to do so. Then, in August 1995, defendant requested that plaintiff submit to a psychiatric examination by a doctor chosen by defendant, Robert M. Toborowsky, M.D. Dr. Toborowsky examined plaintiff on September 14, 1995 and submitted his report to defendant on November 7, 1995; in that report, Dr. Toborowsky concluded that plaintiff was no longer disabled from performing his occupation as a trial attorney. Based on this report, defendant terminated the disability benefits of plaintiff effective November 8, 1995.

Just before plaintiff received the letter informing him of the termination of his disability benefits, he was admitted to a hospital suffering from classic heart attack symptoms. Plaintiff was instructed to have a heart catheterization procedure, but his further treatment was complicated by the sudden and unanticipated termination of his disability benefits as this termination caused plaintiff great stress and anxiety. He was eventually able to have the procedure after defendant agreed to restore his disability benefits, although defendant paid these benefits under a full reservation of rights and continued to require plaintiff to submit benefit applications and reports from his treating physicians on a monthly basis. Plaintiff then underwent a balloon angioplasty operation and was ultimately diagnosed as having coronary artery disease.

In April 1996, still relying upon the report of Dr. Toborowsky, defendant again terminated the disability benefits of plaintiff effective March 26, 1996. Communication continued between counsel for plaintiff and defendant after this date, however, and in May 1996 plaintiff sent defendant a report by a new medical specialist who concluded that plaintiff remained totally disabled and unable to perform his duties as a trial lawyer. Defendant refused, however, to restore the disability benefits owed to plaintiff. In addition, defendant demanded that plaintiff resume paying the premiums on the three policies; the premiums had been waived as a policy benefit during the time when defendant had agreed that plaintiff was totally disabled. Faced with both the denial of his benefits and the demand for premium payments, plaintiff filed the instant action.

II. DISCUSSION

The complaint consists of two counts. In Count I, plaintiff asserts a claim in equity and seeks to have this Court declare that plaintiff is totally and permanently disabled under the policies and to require defendant to pay all past and future benefits owed without requiring plaintiff to submit monthly statements of claim and physician's statements. In Count II, plaintiff alleges that defendant acted in bad faith in denying his claims in violation of 42 Pa.Cons.Stat.Ann. § 8371.

In the instant motion, defendant seeks to have this Court dismiss Count I pursuant to Rule 12(b)(6) as improperly seeking equitable relief and so failing to state a claim upon which relief can be granted. In deciding a motion to dismiss made pursuant to Rule 12(b)(6), a court must take all well-pleaded factual allegations in the complaint as true; dismissal is only appropriate if the plaintiff could prove no set of facts that would entitle him to the relief requested. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232-33, 81 L.Ed.2d 59 (1984); Miree, 433 U.S. at 27 n. 2, 97 S.Ct. at 2492 n. 2. Defendant also seeks pursuant to Rule 12(f) to have this Court strike a statement made in section (2) of the "Wherefore" clause of Count II relating to the amount of punitive damages that plaintiff thinks he should be awarded if defendant is found liability under Count II. See complaint at 14-15.

A. Count I

Defendant argues that plaintiff has an adequate remedy at law and so injunctive relief is inappropriate under Count I. Plaintiff responds that he does not have an adequate remedy of law and so his request for injunctive relief is appropriate. This debate is more than a matter of legal semantics, as not only does the legal versus equitable classification of the cause of action asserted by plaintiff determine the type of relief available, it may also determine whether the claim by plaintiff should be ultimately determined by a jury or a non-jury trial.²

Under Pennsylvania law,³ "equitable relief is not appropriate where a party has an adequate legal or statutory remedy." Tudor Dev. Group v. U.S. Fidelity & Guaranty Co., 968 F.2d 357, 364 (3d Cir.1992) (citing Clark v. Pennsylvania State Police, 496 Pa. 310, 436 A.2d 1383, 1385 (1981)). The legal remedy must be both adequate and complete; equitable relief is available "despite the existence of a legal remedy when, from the nature and complications of a given case, justice can best be reached by means of equity's flexible machinery." Hill v. Nationwide Ins. Co., 391 Pa.Super. 184, 570 A.2d 574, 576 (citation omitted), appeal denied, 525 Pa. 647, 581 A.2d 573 (1990). "A plaintiff has no adequate remedy at law if the injury is of a repeated or continuing character or where monetary damages are difficult to ascertain or are inadequate." Louis W. Epstein Family Partnership v. Kmart Corp., 828 F.Supp. 328, 337 (E.D.Pa.1993); see also Stuart v. Gimbel Brothers, Inc., 285 Pa. 102, 131 A. 728, 730 (1926) (holding that an injunction may issue "to prevent wrongs of a repeated and continuing character, or which occasion damages which are estimable only by conjecture and not by any accurate standard"). But equitable relief remains an "extraordinary remedy,"⁴ and so is not available if the improper future actions that are sought to be enjoined are merely speculative. See Philadelphia Ass'n of School Administrators v. School Dist., 80 Pa.Cmwlth. 242, 471 A.2d 581, 584 (1984).

Plaintiff argues that the instant case is a classic situation for the provision of equitable relief. While acknowledging that he has an adequate remedy at law for obtaining the past benefits allegedly owed to him, plaintiff argues that no action at law could prevent defendant from denying plaintiff future benefits after a verdict is rendered in this Court. Such a denial would then require plaintiff to file another lawsuit, thus raising the specter of plaintiff being forced to file lawsuit after lawsuit in order to enforce his rights under the policies.

In support of this argument, plaintiff relies on two lines of cases. First, plaintiff correctly notes that the Court of Appeals for the Third Circuit and other courts of appeals have held that equitable relief is available in the context of insurance coverage claims made pursuant to section 502(a)(3)(B) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(3)(B). See In re Unisys Corp. Retiree Medical Benefit "ERISA" Litig., 57 F.3d 1255, 1269 (3d Cir. 1995), cert. denied sub nom. Unisys Corp. v. Pickering, ___ U.S. ___, 116 S.Ct. 1316, 134 L.Ed.2d 470 (1996); Curcio v. John Hancock Mut. Life Ins. Co., 33 F.3d 226, 235 (3d Cir.1994); Howe v....