Holovich v. Progressive Specialty Ins. Co.

• Decision Date: 28 April 2022
• Docket Number: CIVIL ACTION NO. 22-1107
• Citation: 600 F.Supp.3d 572
• Parties: James HOLOVICH, Plaintiff, v. PROGRESSIVE SPECIALTY INSURANCE CO., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

600 F.Supp.3d 572

James HOLOVICH, Plaintiff,

v.PROGRESSIVE SPECIALTY INSURANCE CO., Defendant.

CIVIL ACTION NO. 22-1107

United States District Court, E.D. Pennsylvania.

Signed April 28, 2022

Louis S. Schwartz, Law Offices of Louis S. Schwartz, Philadelphia, PA, for Plaintiff.

Kathleen Patricia Dapper, Daniel J. Twilla, Burns White LLC, Pittsburgh, PA, for Defendant.

MEMORANDUM OPINION

Smith, District Judge The plaintiff's vehicle was legally parked when it was struck and damaged by another vehicle, whose operator had acted negligently. Both the plaintiff and the tortfeasor had automobile insurance policies with the defendant insurer. The plaintiff initially submitted a claim under the tortfeasor's policy with the insurer, and the insurer paid for the repairs to the plaintiff's vehicle and for the plaintiff to use a rental car while his vehicle was out of commission. The plaintiff then submitted another claim to the insurer where he attempted to obtain additional compensation for the diminished value of the vehicle. The insurer denied the claim, asserting that there was "no such thing" as diminished value.

Undeterred, the plaintiff then attempted to obtain compensation for the diminished value of his vehicle by submitting a claim for underinsured motorist benefits under his own policy with the insurer. The insurer again denied the claim because "no such thing" existed. Based on this denial, the plaintiff obtained counsel, who sent a letter to the insurer pointing out that diminution-in-value damages were recoverable under Pennsylvania law and attaching an expert report supporting the plaintiff's diminution-in-value claim. The insurer responded to this letter by again denying the claim, but this time informing the plaintiff that the denial was based on his failure to prove that the vehicle diminished in value.

Having been unsuccessful in his claims with the insurer, the plaintiff filed an action in state court against the insurer, asserting causes of action for (1) breach of contract related to the tortfeasor's policy, (2) breach of contract related to his policy, (3) unjust enrichment, and (4) violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law. The defendant removed the matter to this court, and it has now moved to dismiss the complaint in its entirety, arguing that the plaintiff has failed to state any claim upon which relief may be granted. The plaintiff, for reasons unknown, has decided not to respond to the motion to dismiss. Despite this failure, the court has reviewed the merits of the motion and will grant in part and deny in part the motion to dismiss.

The court will grant the part of the motion to dismiss (1) to the extent that the plaintiff attempts to bring a breach of contract claim under the tortfeasor's policy, because he lacks standing to bring such a claim, (2) as to the unjust enrichment claim, because the existence of a valid insurance agreement between the parties is not in dispute in this case, and (3) as to the Unfair Trade Practices and Consumer Protection Law claim, because this law only applies to the sale of an insurance policy and not to insurance claims handling, and the crux of the allegations in the complaint relate to the insurer's claims handling. The court will deny the part of the motion seeking dismissal of the plaintiff's breach of contract claim relating to his own policy with the insurer because the defendant bases its argument on an exclusion in the insurance policy and neither party has provided the court with a copy of the policy. In addition, while the insurer claims that Pennsylvania law does not recognize first party claims for diminution of value, it has not provided sufficient legal support for this argument at this time.

I. ALLEGATIONS AND PROCEDURAL HISTORY

On February 20, 2022, the plaintiff, James Holovich ("Holovich"), filed a complaint against the defendant, Progressive Specialty Insurance Co. ("Progressive") in the Court of Common Pleas of Philadelphia County. See Compl. at ECF pp. 2, 3, Doc. No. 1-5. In the complaint, Holovich alleges that his 2017 Tesla X (the "Vehicle") was involved in a motor vehicle accident on May 22, 2021. See id. at ¶ 5. On that date, a vehicle operated by Allison Zimmerman ("Zimmerman"), who was insured by Progressive, struck the Vehicle while it was legally parked. See id. Holovich also maintains automobile insurance through Progressive. See id. at ¶ 6.

Holovich presented a claim to Progressive through Zimmerman's policy on May 25, 2021.¹ See id. at ¶ 7. Progressive investigated the claim and determined that the estimate to repair the damage to the Vehicle was $12,617.27. See id. at ¶ 8, Ex. 1. The Vehicle was then sent to a repair company, which completed all repairs in July 2021. See id. at ¶ 9. While the Vehicle was being repaired, Progressive paid for a rental car for Holovich's use. See id. at ¶ 10.

In addition to the repair costs, Holovich and/or his husband, presented additional requests for compensation for the diminished value of the Vehicle to Progressive. See id. at ¶ 12. In response to these requests, a Progressive claims representative indicated that "there is ‘no such thing’ as diminished value." Id. at ¶¶ 13, 14.

After Holovich was unsuccessful in seeking compensation for the diminished value of the Vehicle on his claim through Zimmerman's Progressive policy, he submitted a claim for underinsured motorist benefits through his own Progressive automobile insurance policy. See id. at ¶ 15. In presenting this claim, Holovich spoke to the same Progressive claims representative who refused his diminished value claim under Zimmerman's policy, and this claims representative again stated that there was "no such thing" as diminished value and refused to allow Holovich or his husband to speak to a supervisor. See id.

Due to the denials of his diminished value claim, Holovich engaged legal counsel, who sent a letter to Progressive which also contained an expert report supporting Holovich's requested amount of compensation for the diminished value of the Vehicle.² See id. at ¶¶ 16, 17, Exs. 3, 4. After receipt of the attorney's letter, Progressive "switched gears, no longer claiming that there is no such thing as diminished value." Id. at ¶ 18. Instead, Progressive asserted that Holovich had not proven his claim and the expert's report was only an "opinion." Id. at ¶ 19, Ex. 5. Holovich claims that Progressive's "stonewalling," which went from denying that diminished value existed to then stating that his expert had just given an opinion, "is baffling at best." Id. at ¶ 22.

Holovich asserts that "[e]very single person who is involved in the car industry, including insurance companies, knows that people will pay more for vehicles that have not been in a collision." Id. at ¶ 20. In other words, "everyone values less a vehicle that has been involved in a collision that sustains significant damage requiring over ten thousand dollars in repairs." Id. at ¶ 21.

Based on these allegations, Holovich asserts the following claims against Progressive: (1) breach of contract (under the Zimmerman policy); (2) breach of contract (under his Progressive policy); (3) unjust enrichment; and (4) violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-9.2, et seq. ("UTPCPL"). See id. at 5–8. For relief, Holovich seeks equitable relief, compensatory damages, and attorney's fees and costs. See id.

On March 22, 2022, Progressive removed the matter from the Court of Common Pleas to this court. See Doc. No. 1. Seven days later, Progressive filed a motion to dismiss all causes of action in the complaint. The plaintiff has neither filed a response to the motion to dismiss nor filed an amended complaint. The motion is therefore ripe for disposition.³

II. DISCUSSION

A. Standard of Review – Motions to Dismiss Under Fed. R. Civ. P. 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) allows a party to move for dismissal of a complaint or a portion of a complaint for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6) ("[A] party may assert the following defenses by motion: ... (6) failure to state a claim upon which relief can be granted[.]"). A motion to dismiss under Rule 12(b)(6) tests "the sufficiency of the allegations contained in the complaint." Kost v. Kozakiewicz , 1 F.3d 176, 183 (3d Cir. 1993) (citation omitted). As the moving party, "[t]he defendant bears the burden of showing that no claim has been presented." Hedges v. United States , 404 F.3d 744, 750 (3d Cir. 2005) (citation omitted).

In general, a complaint is legally sufficient if it contains "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "The touchstone of [this] pleading standard is plausibility." Bistrian v. Levi , 696 F.3d 352, 365 (3d Cir. 2012). Although Rule 8(a)(2) does "not require heightened fact pleading of specifics," it does require the recitation of "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted). In other words, "[t]he plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quotation omitted). "In ruling on a 12(b)(6) motion, courts can and should reject legal conclusions, unsupported conclusions, unwarranted references, unwarranted deductions, footless conclusions of law, and sweeping legal conclusions in the form of actual allegations." Bright v. Westmoreland Cnty. , 380 F.3d 729, 735 (3d Cir. 2004) (citation and internal quotation...