Greenwich Ins. Co. v. BBU Servs., Inc.
Decision Date | 04 June 2013 |
Docket Number | Civil Action No. 12-291 |
Parties | GREENWICH INSURANCE COMPANY, Plaintiff, v. BBU SERVICES, INC., et al., Defendants. |
Court | U.S. District Court — Western District of Pennsylvania |
ORDER
Plaintiff's Motion to Dismiss (Doc. 46) the Chesapeake-Defendants' Amended Counterclaim for bad faith will be denied, and the BBU-Defendants' Motion (Doc. 59) for leave to amend their Counterclaim will be granted.1
Chesapeake's Amended Counterclaim (Doc. 44) alleges, among other things, that Plaintiff initially agreed in writing, on May 12, 2011, to defend Chesapeake "[without] issuing a Reservation of Rights Letter." Id. at ¶ 18 ( ). 165 days later, on October 24, 2011, Plaintiff reversed course and issued a reservation of rights letter. See id. at ¶ 19. Chesapeake claims to have detrimentally relied on Plaintiff's initial assurance of coverage, and it claims to have been prejudiced by Plaintiff's reversal of position. See generally Chesapeake's Am. Counterclaim at ¶¶ 23(I)-(J), 24 ( ).
Numerous courts2 have recognized that an insurer's delay in issuing a reservation of rights letter may, under certain circumstances, support a claim for bad faith or estoppel. See, e.g., Gibney v. State Farm Fire & Cas. Co., 897 F. Supp.2d 618, 630-31 (S.D. Ohio 2012) ( )(citation to quoted source omitted); Specialty Surplus Ins. Co. v. Second Chance, Inc., 412 F. Supp.2d 1152, 1168 (W.D. Wash. 2006) ( ); Coregis Ins. Co. v. McCollum, 961 F. Supp. 1572, 1578 (M.D. Fla. 1997) ( )(citation to quoted source omitted); N'western Nat'l Ins. Co. v. R.S. Armstrong & Bros. Co., 627 F. Supp. 951, 956 (D. S.C. 1985) ( )(citation omitted).3 And while Plaintiff may challenge Chesapeake's ability to carry its burdens of proof regarding purported detrimental reliance, prejudice and/or bad motive, these issues cannot properly be resolved at this stage of the litigation. See, e.g., Scottsdale Ins. Co. v. City of Hazleton, 2010 WL 4375911, *2 (3d Cir. Nov. 5, 2010) ( ); American Capital Homes, Inc. v. Greenwich Ins. Co., 2010 WL 3430495, *4-5 (W.D. Wash. Aug. 30, 2010) ( ); Lextron, Inc. v. Travelers Cas. & Sur. Co. of Amer., 267 F. Supp.2d 1041, 1048 (D. Colo. Jun. 18, 2003) ( ); see also, e.g., Gibney v. State Farm Fire & Cas. Co., 2012 WL 6015961, *4-5 (S.D. Ohio Dec. 3, 2012) ( )(emphasis added).
In light of the foregoing, Plaintiff has failed to demonstrate its entitlement to dismissal of Chesapeake's Counterclaim. In reaching this conclusion, the undersigned finds distinguishable the cases cited in Plaintiff's brief, including the recent decisions of this Court that have rejected, at the 12(b)(6) stage, "conclusory," "bare-bones" and "boilerplate" allegations of bad faith. See, e.g., Timothy v. State Farm Fire & Cas. Co., 2012 WL 3648454, *5-6 (W.D. Pa. Aug. 23, 2012) andPalmisano v. State Farm Fire & Cas. Co., 2012 WL 3595276, *12-15 (W.D. Pa. Aug. 20, 2012). While some of Chesapeake's bad faith allegations may be susceptible todismissal under the aforementioned decisions, Chesapeake's claims regarding Plaintiff's change in position, detrimental reliance and prejudice are not.
Consistent with these conclusions, moreover, BBU's request for leave to amend their Counterclaim will be granted. The analyses above apply with equal force to BBU's putative claims of bad faith/estoppel. Given that materially similar allegations already have been leveled by Chesapeake in this case, Plaintiff will not be unduly prejudiced by BBU's assertion of the same. See BBU's proposed am. counterclaim (filed under Doc. 59-1) at ¶¶ 26, 28, 38, 49, 51 & 56 (advancing claims materially similar to Chesapeake's).
Finally, the Court declines to reach Plaintiff's arguments regarding the types of damages that may or may not be available under Defendants' Counterclaims. See, e.g., Pl.'s Br. (Doc. 47) at 14-18 ( ). Unless and until a thorough choice-of-law analysis is presented to the Court, it would not be a good use of judicial resources to survey the laws of Pennsylvania, Ohio ...
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