Guessford v. Pa. Nat'l Mut. Cas. Ins. Co.

• Decision Date: 16 January 2013
• Docket Number: No. 1:12CV260.,1:12CV260.
• Citation: 918 F.Supp.2d 453
• Parties: Lawrence D. GUESSFORD, Jr., Plaintiff, v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Middle District of North Carolina

918 F.Supp.2d 453

Lawrence D. GUESSFORD, Jr., Plaintiff,

v.PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY, Defendant.

No. 1:12CV260.

United States District Court, M.D. North Carolina.

Jan. 16, 2013.

Kathryn C. Setzer, Michael Doran, Doran, Shelby, Pethel and Hudson, PA, Salisbury, NC, J. David Stradley, White & Stradley, LLP, Robert Peel Holmes, IV, White & Stradley, PLLC, Raleigh, NC, for Plaintiff.

John R. Fonda, Bailey and Thomas, Winston–Salem, NC, Robert Tayloe Ross, Diane U. Montgomery, Midkiff, Muncie & Ross, P.C., Richmond, VA, for Defendant.

MEMORANDUM OPINION AND ORDER

BEATY, District Judge.

This matter is before the Court on Defendant Pennsylvania National Mutual Casualty Insurance Company's (“Defendant”) Motion to Dismiss and/or Motion for Judgment on the Pleadings [Doc. # 21] as to all claims by Plaintiff Lawrence D. Guessford, Jr. (“Plaintiff”). Also before the Court is Plaintiff's Motion to Strike Defendant's Affirmative Defenses and/or Motion for Partial Judgment on the Pleadings [Doc. # 28]. These Motions have been fully briefed and were argued at a Motion hearing before the Court on December 11, 2012. For the reasons discussed below, the Court will grant Defendant's Motion for Judgment on the Pleadings as to Plaintiff's breach of contract claim but deny Defendant's Motion for Judgment on the Pleadings as to Plaintiff's unfair or deceptive trade practices and refusal to settle in good faith claims. Further, the Court will grant in part and deny in part Plaintiff's Motion to Strike various affirmative defenses asserted in Defendant's Answer.

I. FACTUAL BACKGROUND

This case involves various claims surrounding an automobile liability insurance policy issued by Defendant to Plaintiff's employer, Waggoner Manufacturing, Inc. (“Waggoner”). The event underlying the case is a motor vehicle accident on July 6, 2007, in which Plaintiff was traveling on Highway 29 in Salisbury, North Carolina in a vehicle owned by his employer, Waggoner. A vehicle owned and operated by Rebecca Moore Corriher (“Ms. Corriher”) turned left onto Highway 29, directly in front of Plaintiff's oncoming vehicle, causing a collision between Plaintiff's vehicle and Ms. Corriher's vehicle. This collision caused Plaintiff to suffer various injuries and required hospitalization, rehabilitation, and physical therapy.

At the time of the collision, Ms. Corriher carried a liability insurance policy issued by Nationwide Mutual Insurance Company (“Nationwide”) with liability insurance coverage limits of $100,000 per person injured. After the collision, Nationwide tendered $100,000, the limits of its liability coverage, to Plaintiff in exchange for a covenant not to enforce judgment. Additionally, because the crash occurred while Plaintiff was in the scope of his employment, Plaintiff was entitled to workers' compensation benefits, which he received through his employer's workers' compensation insurer, the Hartford.

Though the collision occurred on July 6, 2007, Plaintiff did not discover the insurance policy issued by Defendant providing coverage for Waggoner's vehicle at the time of the collision until March of 2009. This policy contained underinsured motorist liability (“UIM”) coverage up to $1,000,000. On March 9, 2009, Defendant sent Plaintiff correspondence acknowledging Defendant's receipt of a Claim Report concerning Plaintiff's accident and asking Plaintiff to complete a Medical/Wage Release Authorization. On March 16, 2009, Defendant received a letter from Plaintiff's counsel notifying Defendant that Nationwide, Ms. Corriher's insurer, had tendered its liability limits to Plaintiff. After receiving this notification, Defendant notified Plaintiff via a letter dated April 20, 2009 that Defendant elected not to advance Nationwide's tender, choosing instead to “waive its subrogation rights” against Ms. Corriher. (Am. Compl. ¶ 8). This correspondence also included a request to interview Plaintiff regarding the facts and circumstances surrounding the accident and a request for copies of all medical bills and records.

On July 14, 2009, Plaintiff's counsel sent Defendant a disc containing copies of Plaintiff's preliminary billing statements, medical records, and medical bills totaling $457,258.60 for treatment received by Plaintiff as a result of the crash. Plaintiff alleges that this disc contained over 1,100 pages of medical records and bills. The letter also requested that Defendant advise Plaintiff's counsel “as to Penn National's settlement position in this matter.” (Am. Compl., Ex. A [Doc # 18–1] ).

In addition to sending Defendant the medical bills in July of 2009, beginning April 16, 2009, Plaintiff sent Defendant periodic updates detailing the amount of medical expenses that had been paid to Plaintiff by the Hartford as a proximate result of the accident. By November 23, 2009, the Hartford had paid Plaintiff's medical expenses in the amount of $590,620.66, and this information was provided to Defendant via correspondence on January 29, 2010.

On February 16, 2010, Plaintiff's counsel had a phone conversation with Defendant's representative wherein Defendant stated it would not consider evaluating Plaintiff's claim until Plaintiff reached maximum medical improvement. Following this phone conversation, on March 1, 2010, Plaintiff's counsel sent a letter to Defendant requesting mediation in March or April of 2010. On March 12, 2010, Defendant responded that the medical information received in July of 2009 was incomplete and Plaintiff's claim could not be evaluated until Defendant received more information. Specifically, Defendant stated that Plaintiff had provided “incomplete notes regarding his care after discharge from the hospital on August 13, 2007 ... no records from his rehab stay, incomplete office and clinic visit information up to and including July of 2008, and no records thereafter.” (Am. Compl., Ex. B [Doc # 18–2] ). Further, the letter acknowledged that Defendant and Plaintiff discussed a potential voluntary mediation “if the Worker's Compensation carrier was in agreement and in a position to resolve their lien.” (Am. Compl., Ex. B [Doc # 18–2] ).

On March 15, 2010, after receiving Defendant's March 12, 2010 correspondence, Plaintiff's counsel sent a letter to Defendant acknowledging that while more documents regarding the nature and extent of Plaintiff's treatment were available, such additional documentation was not necessary to fairly evaluate the extent of Plaintiff's damages. (Answer, Ex. N [Doc. # 20–14] ). Further, the letter requested that Defendant forward a medical release authorization for Plaintiff to sign to give Defendant direct access to Plaintiff's medical information. Finally, the letter included a formal demand for arbitration and designated Plaintiff's arbitrator.

Plaintiff alleges that even after initiating arbitration proceedings with Defendant prior to the expiration of the statute of limitations against the tort-feasor, Ms. Corriher, Defendant required Plaintiff to file a civil action against Ms. Corriher to toll the statute of limitations. Shortly after Plaintiff filed this civil tort action, Defendant served Plaintiff with a set of discovery requests and Plaintiff provided formal discovery responses on September 3, 2010. Plaintiff alleges that these discovery responses contained materials detailing accident related medical expenses totaling $727,753.32.

Following the discovery requests relating to the pending tort action, an arbitration hearing between Plaintiff and Defendant under the insurance contract was set for January 18, 2011. Before arbitration, on January 12, 2011, Defendant made its first settlement offer to Plaintiff of $525,000. The offer contained no explanation of how it was calculated. Plaintiff rejected this offer and proceeded to arbitration on January 18, 2011. On January 31, 2011, the arbitration panel determined the value of Plaintiff's claim to be $2,500,000.

After the award from the arbitration panel, Defendant tendered payment of $900,000 ¹ to Plaintiff. This payment also contained a release for Plaintiff to sign in order to release all potential claims against Defendant. In response to this release, Plaintiff's counsel notified Defendant that the check would not be deposited until an agreement was reached allowing Plaintiff to accept the check without signing the release and without prejudice to pursuing any claims against Defendant arising out of Defendant's handling of Plaintiff's claim.

Following the $900,000 payment, Plaintiff filed this action in Superior Court in Rowan County, North Carolina, on February 14, 2012 alleging three separate counts: breach of contract, unfair and deceptive trade practices, and refusal to settlein good faith. Thereafter, Defendant removed the case based on diversity jurisdiction.² After removal, Defendant filed its present Motion to Dismiss and/or Motion for Judgment on the Pleadings [Doc. # 21]. Plaintiff then filed his present Motion to Strike Defendant's Affirmative Defenses and/or Motion for Partial Judgment on the Pleadings [Doc. # 28].

II. DEFENDANT'S MOTION TO DISMISS AND/OR MOTION FOR JUDGMENT ON THE PLEADINGS

Defendant has filed a Motion to Dismiss and/or Motion for Judgment on the Pleadings [Doc. # 21] as to each of Plaintiff's claims for breach of contract, unfair and deceptive trade practices, and refusal to settle in good faith. Because Defendant filed its Motion contemporaneously with its Answer, it is appropriate to address the requested relief as seeking a judgment on the pleadings under Rule 12(c). See Burbach Broad. Co. of Delaware v. Elkins Radio Corp., 278 F.3d 401, 405 (4th Cir.2002) (finding that because the defendant filed his motion to dismiss, or in the alterative, motion for judgment on the pleadings, after filing his answer, the court would “construe the motion as one for judgment on the pleadings”).

A motion for judgment on the pleadings under Rule 12(c) is governed by the same...