Sylvester v. Depositors Ins. Co.
| Decision Date | 24 August 2020 |
| Docket Number | CIVIL ACTION NO. 20-1322 |
| Citation | 481 F.Supp.3d 412 |
| Parties | Salvatore SYLVESTER, et al., Plaintiffs, v. DEPOSITORS INSURANCE COMPANY et al., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Edmund A. Normand, Normand PLLC, Orlando, FL, Jonathan Shub, Kevin Laukaitis, Shub Law Firm LLC, Haddonfield, NJ, Aarthi Manohar, Kohn, Swift & Graf, P.C., Philadelphia, PA, for Plaintiffs.
Mark L. Hanover, Kathleen V. Kinsella, Dentons US LLP, Chicago, IL, Pamela A. Carlos, James P. Shay, Bennett, Bricklin & Saltzburg LLC, Philadelphia, PA, for Defendants.
Plaintiffs bring a putative class action alleging one count of breach of contract because Defendants, in paying Plaintiffs’ claims of total loss resulting from motor vehicle collisions, did not pay for fees associated with replacing a vehicle in Pennsylvania. But the insurance policies at issue do not promise to pay for the replacement of the damaged vehicle. Thus, the motion to dismiss will be granted.
Depositors Insurance Company, Nationwide Property & Casualty Insurance Company, and Nationwide Mutual Insurance Company provide passenger auto insurance to Salvatore Sylvester, Alicia Edwards-Gutzman, and Eunice Hill, respectively. Plaintiffs were involved in motor vehicle collisions and their cars were determined by Defendants to be total losses. Defendants paid Plaintiffs’ claims for the total losses of their vehicles, but these payments did not include the fees associated with replacing a car (such as title fees). The parties estimate that these fees, which a person replacing a car in Pennsylvania must pay, amount to about $105. Plaintiffs do not plead that they incurred these fees by replacing their cars.
The three insurance policies at issue are almost identical. They all provide that the insurer will pay for "loss" to the covered vehicle.1 They all limit liability to "the actual cash value" of the vehicle.2 And they all refer to payment for loss as separate and distinct from replacing the vehicle.3
Plaintiffs brought suit on behalf of themselves and all others similarly situated, alleging that Defendants owe them the replacement fees under the policies. Defendants now move to dismiss, arguing that Plaintiffs do not have standing and that Plaintiffs fail to state a claim.
To challenge a plaintiff's standing to sue, a defendant may move to dismiss "pursuant to Rule 12(b)(1), because standing is a jurisdictional matter." Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007) ). The standard of review for a 12(b)(1) motion depends on "whether a Rule 12(b)(1) motion presents a ‘facial’ attack or a ‘factual’ attack on the claim at issue." Constitution Party of Pennsylvania v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014). When the attack is a facial attack, "the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." Id. at 358 (quoting In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012) ). When the attack is a factual attack, "the District Court may look beyond the pleadings to ascertain the facts" relevant to jurisdiction. Id. And to determine whether the motion is a facial attack or a factual attack, the Court looks to whether the motion challenges the pleadings or instead challenges the facts beyond the pleadings. Kamal v. J. Crew Grp., Inc., 918 F.3d 102, 109 (3d Cir. 2019).
A party may move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). When considering such a motion, the Court must "accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party." DeBenedictis v. Merrill Lynch & Co., 492 F.3d 209, 215 (3d Cir. 2007) (). To withstand a motion to dismiss, the complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. Although a plaintiff is entitled to all reasonable inferences from the facts alleged, a plaintiff's legal conclusions are not entitled to deference, and the Court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986).
The pleadings must contain sufficient factual allegations so as to state a facially plausible claim for relief. See, e.g., Gelman v. State Farm Mut. Auto. Ins. Co., 583 F.3d 187, 190 (3d Cir. 2009). " ‘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.’ " Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) ). In deciding a Rule 12(b)(6) motion, the Court limits its inquiry to the facts alleged in the complaint and its attachments, matters of public record, and undisputedly authentic documents if the complainant's claims are based upon these documents. See Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994) ; Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993).
The motion to dismiss will be granted because the language in the policies is clear and unambiguous that Defendants have a duty to pay for the loss to the auto in the case of a collision, and they do not have a duty to pay the replacement costs.
The motion is a facial attack on the facts as asserted in the pleadings. As a threshold matter, Plaintiffs have standing because they have an interest in the $105 that they allege Defendants owe them to cover fees for replacing their cars. Defendants argue that the complaint does not allege that Plaintiffs incurred the fees associated with replacing their cars. But whether these fees were incurred is irrelevant because a breach of contract claim accrued as soon as Defendants paid the total loss claim without including the replacement fees. And this accrual of the breach of contract claim gives Plaintiffs standing to sue.
To establish standing, "[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ).4 The injury in fact element requires the plaintiff to "show that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’ " Id. (quoting Lujan, 504 U.S. at 560, 112 S.Ct. 2130 ).
An interest in damages resulting from a breach of contract is sufficient to confer standing to sue to recover those damages. In general, when the injury alleged "has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts," this supports a finding that the injury satisfies the injury in fact requirement. Id. (citing Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 775–777, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000) ). And "[m]onetary harm is a classic form of injury-in-fact." Danvers Motor Co. v. Ford Motor Co., 432 F.3d 286, 293 (3d Cir. 2005). Thus, a plaintiff seeking to recover money she lost due to the breach of a contract to which she was a party has standing because monetary injuries ordinarily constitute an injury in fact and there is a common law basis for recovery for an injury arising from a breach of contract. See Takeda Pharm. U.S.A., Inc. v. Spireas, 400 F. Supp. 3d 185, 205 (E.D. Pa. 2019) .
Defendants argue that the alleged injury is too speculative to be an injury in fact because the complaint fails to allege that Plaintiffs have purchased replacement cars and incurred the replacement fees. But this argument fails because the injury is not the financial burden of having to pay replacement fees; rather, the injury is receiving a lower payment than what is owed for a total loss under the policies.5 Defendants in essence assert that Plaintiffs must purchase a replacement car before being entitled to the full amount of the insurance benefit, but this is not a condition in the agreement.6
In sum, Plaintiffs have adequately alleged that they suffered concrete injuries in that Defendants did not pay them what they are owed under the insurance policies.7
Plaintiffs fail to state a claim because the policies unambiguously provide that the insurers must pay for the loss to the vehicle, not the replacement cost or the "actual cash value." And even if the collision results in a total loss, by the plain meaning of the terms of the contract, Defendants are not obligated to pay for the replacement of the vehicle. Thus, there is no plausible breach of contract claim.
The contract does not create an obligation for Defendants to pay the replacement costs. Instea...
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