Toner v. GEICO Ins. Co., CIVIL ACTION NO. 17–0458

• Decision Date: 06 July 2017
• Docket Number: CIVIL ACTION NO. 17–0458
• Citation: 262 F.Supp.3d 200
• Parties: Robert W. TONER, Plaintiff, v. GEICO INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

262 F.Supp.3d 200

Robert W. TONER, Plaintiff,

v.GEICO INSURANCE COMPANY, Defendant.

CIVIL ACTION NO. 17–0458

United States District Court, E.D. Pennsylvania.

Filed July 6, 2017

Bradley R. Cornett, Sagot Brooke Cornett PC, Bensalem, PA, for Plaintiff.

Scott J. Tredwell, McCormick & Priore, P.C., Philadelphia, PA, for Defendant.

OPINION

Slomsky, District Judge

I. INTRODUCTION

This case originates from an underinsured motorist claim submitted after a motorcycle accident. Plaintiff Robert W. Toner brings this suit against his own insurer, Defendant GEICO Insurance Company, alleging breach of contract and bad faith.

In Count I of the Complaint, Plaintiff alleges breach of contract because Defendant has not offered to pay his underinsured motorist claim. In Count II, Plaintiff alleges that Defendant acted in bad faith, in violation of 42 Pa. Cons. Stat. Ann. § 8371, by engaging in a variety of abusive claim handling practices. In response, Defendant has filed a Motion to Dismiss the Complaint in its entirety, which is now ripe for disposition.

II. BACKGROUND

Plaintiff Robert W. Toner is the son of Robert and Diann Toner (the "Toners"), who live in Huntingdon Valley, Pennsylvania. (Doc. No. 4–1 at ¶ 1.) Defendant GEICO Insurance Company ("GEICO") is a corporation that issues insurance policies in Pennsylvania. It has its principal place of business in Fredericksburg, Virginia. (Id. at ¶ 2.) Plaintiff's parents purchased automobile insurance from Defendant. (Id. at ¶ 3.) The policy issued was effective from November 13, 2014 through May 13, 2015 and insured three vehicles: a 2008 Lexus, a 2006 BMW, and a 2015 GMC Sierra. (Id. at ¶ 4.) The underinsured motorist coverage under the policy was $300,000, and this coverage stacked for all three vehicles, resulting in a total coverage of $900,000. (Id. ) Plaintiff alleges that he was insured under the GEICO policy because he was a member of the Toners' Huntingdon Valley household. (Id. at ¶ 3.)

On March 25, 2015, during the life of the policy, Plaintiff was operating a motorcycle in Palm Beach County, Florida. (Id. at ¶ 5.) He was driving westbound on Carol Avenue near the intersection of South Congress Avenue. (Id. ) At the same time, Giovanni Aguilar was operating an automobile eastbound on Carol Avenue. (Id. ) At the intersection, Aguilar attempted to make a left turn from Carol Avenue onto South Congress Avenue. (Id. ) Aguilar cut across Plaintiff's lane of traffic and collided with Plaintiff. (Id. )

As a result of the collision, Plaintiff sustained severe injuries, including head injuries and damage to his nervous system. (Id. at ¶ 11.) The injuries have restricted Plaintiff's ability to perform the usual tasks of daily life. (Id. ) Plaintiff's medical expenses have exceeded $3,000,000. (Doc. No. 5 at 2.) Aguilar was cited for his failure to yield at the intersection, and the accident occurred solely due to his negligence. (Doc. No. 4–1 at ¶ 6.) Plaintiff recovered $12,000 under Aguilar's insurance policy. (Id. at ¶ 17.)

After the accident, Plaintiff submitted an underinsured motorist claim to Defendant seeking the maximum stacked coverage amount of $900,000. (Id. at ¶¶ 21–22.) To date, Defendant has not paid Plaintiff in connection with his underinsured motorist claim. (Id. at ¶ 23.)

On January 16, 2017, Plaintiff initiated this action against Defendant in the Montgomery County Court of Common Pleas. (Id. ) On January 31, 2017, Defendant removed the action to this Court on the basis of diversity of citizenship jurisdiction.¹ (Doc. No. 1.) On February 8, 2017, Defendant filed a Motion to Dismiss. (Doc. No. 3.) Plaintiff subsequently filed a Response in Opposition. (Doc. No. 5.)

III. STANDARD OF REVIEW

The motion to dismiss standard under Federal Rule of Civil Procedure 12(b)(6) is set forth in Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). After Iqbal it is clear that "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice" to defeat a Rule 12(b)(6) motion to dismiss. Id. at 663, 129 S.Ct. 1937 ; see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ethypharm S.A. France v. Abbott Labs., 707 F.3d 223, 231 n.14 (3d Cir. 2013) (citing Sheridan v. NGK Metals Corp., 609 F.3d 239, 262 n.27 (3d Cir. 2010) ). "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. Applying the principles of Iqbal and Twombly, the Third Circuit in Santiago v. Warminster Twp., 629 F.3d 121 (3d Cir. 2010), set forth a three-part analysis that a district court in this Circuit must conduct in evaluating whether allegations in a complaint survive a 12(b)(6) motion to dismiss:

First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Finally, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief."

Id. at 130 (quoting Iqbal, 556 U.S. at 675, 679, 129 S.Ct. 1937 ). "This means that our inquiry is normally broken into three parts: (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).

A complaint must do more than allege a plaintiff's entitlement to relief, it must "show" such an entitlement with its facts. Fowler v. UPMC Shadyside, 578 F.3d 203, 210–11 (citing Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234–35 (3d Cir. 2008) ). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘shown’—‘that the pleader is entitled to relief.’ " Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. The "plausibility" determination is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

IV. ANALYSIS

Defendant moves to dismiss the Complaint in its entirety pursuant to Federal Rule of Civil Procedure 12(b)(6). Regarding the breach of contract claim, Defendant first argues that Plaintiff was not a resident of his parents' household and for this reason was not covered under the GEICO insurance policy. (Doc. No. 3 at ¶ 13.) Defendant also argues that the language of the insurance policy specifically excludes Plaintiff's underinsured motorist claim. (Id. at ¶ 58.) Finally, Defendant argues that Plaintiff has failed to state a plausible bad faith claim. (Id. at ¶ 74.) The Court will address each argument in turn.

A. Plaintiff Has Plausibly Alleged a Breach of Contract Claim

i. Plaintiff May Have Been an Insured

In Count I of the Complaint, Plaintiff raises a breach of contract claim against Defendant. Specifically, Plaintiff claims that Defendant breached the insurance contract between itself and the Toners by refusing to pay Plaintiff's underinsured motorist claim. (Doc. No. 4–1 at ¶¶ 24–30.) Plaintiff claims that he is insured under his parents' GEICO insurance policy because he is a member of their Huntingdon Valley household. (Id. at ¶ 3.) Defendant contends that Plaintiff resided in Palm Beach County, Florida at the time of the accident and should not be considered a member of the Toners' Huntingdon Valley household. (Doc. No. 3 at ¶¶ 52–55.) Viewing the facts in the light most favorable to Plaintiff, this issue cannot be resolved in favor of Defendant at this stage.

Under Pennsylvania law,² a breach of contract claim requires that a plaintiff establish: "(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract [,] and (3) resultant damages." Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003) (quoting CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. Ct. 1999) ).

Here, Defendant does not contest that Plaintiff has pled the first and third elements of a breach of contract claim. Rather, Defendant contends that Plaintiff has failed to plead the second element—that is, a breach of duty imposed by the contract. Defendant contends that it owed no contractual duty to Plaintiff because Plaintiff cannot establish residence at the Toner household to make him an insured under the GEICO insurance policy. (Doc. No. 3 at ¶ 52.)

Establishing an individual's "residence" to determine if he is an insured under an insurance policy is a question of physical facts and presence rather than intent. See Nationwide Mut. Ins. Co. v. Budd–Baldwin, 947 F.2d 1098, 1102 (3d Cir. 1991) (noting that residence in the context of an insurance contract implicates "a sense of belonging"); see also Traveler's Pers. Ins. Co. v. Estate of Parzych, 675 F.Supp.2d 505, 509 (E.D. Pa. 2009) (noting that determining the residence of an insured has no intent component but rather is determined by purely physical facts). The word residence "contemplates, at a minimum, some consistent, personal contact with that person's home. Occasional, sporadic, and temporary contacts are insufficient." St. Paul Fire and Marine Ins. Co. v. Lewis, 935 F.2d 1428, 1431–32 (3d Cir. 1991). Examples of such physical, personal contacts include where one chooses to sleep and eat meals. Id.

Plaintiff argues that Defendant had a duty to him because his residence was the Toners' Huntingdon Valley household. (Doc. No. 4–1 at ¶ 3.) The GEICO policy³ provides, in pertinent part:

1. Household Member means a

...