Boscov's Dep't Store, Inc. v. Am. Guarantee & Liab. Ins. Co.

546 F.Supp.3d 354

BOSCOV'S DEPARTMENT STORE, INC., Plaintiff,

v.AMERICAN GUARANTEE AND LIABILITY INSURANCE COMPANY, Defendant.

Civil No. 5:20-cv-03672-JMG

United States District Court, E.D. Pennsylvania.

Signed June 29, 2021

Filed June 30, 2021

Luke E. Debevec, John N. Ellison, Reed Smith LLP, Philadelphia, PA, for Plaintiff.

Catherine Baiocchi, Michael Menapace, Wiggin and Dana, New Haven, CT, Susan M. Kennedy, Wiggin & Dana LLP, Philadelphia, PA, for Defendant.

MEMORANDUM OPINION

GALLAGHER, United States District Court Judge

When Plaintiff Boscov's Department Store, Inc. closed its doors because of the COVID-19 pandemic, it turned to its insurer, Defendant American Guarantee and Liability Insurance Company ("AGLIC"), to recover business losses. Like so many others faced with the same predicament, Boscov's was denied coverage. Boscov's now brings a lawsuit against AGLIC for breach of contract and a declaratory judgment. It also claims that AGLIC breached the duty of good faith and fair dealing. Before the Court are AGLIC's motions to strike and for judgment on the pleadings. For the reasons explained below, we will deny the motion to strike, but will grant the motion for judgment on the pleadings.

I. BACKGROUND

Boscov's is a family-owned business that operates department stores in Pennsylvania, New York, New Jersey, Delaware, Maryland, Ohio, Connecticut, and Rhode Island. Compl. ¶ 13, ECF No. 1. Between June 1, 2019, and June 1, 2020, Boscov's maintained an all-risk insurance policy (the "Policy") with AGLIC. Id. ¶ 37. In relevant part, the Policy insured against "direct physical loss of or damage caused by a Covered Cause of Loss to Covered Property." Id. ¶ 40; see also Compl. Ex. C, at 14, ECF No. 1-3.

Several Boscov's locations closed on March 13, 2020, just one week after Pennsylvania Governor Tom Wolf issued a Proclamation of Disaster Emergency regarding COVID-19. Compl. ¶ 36; see Compl. Ex. A, at 4, ECF No. 1-1. Civil authorities nationwide followed suit, as "states, counties, and cities where Boscov's insured stores are located issued orders closing or restricting access to numerous Boscov's locations." Compl. ¶ 32. See generally Compl. Ex. A. By March 17, 2020, Boscov's closed the remainder of its stores. Compl. ¶ 36.

Soon after, Boscov's notified AGLIC of its claim for losses incurred due to the pandemic and the associated shutdown orders. Id. ¶ 73. AGLIC allegedly failed to investigate the matter. Id. ¶¶ 77–79. Instead, in a letter dated June 10, 2020, AGLIC summarily rejected Boscov's claim. Id. ¶ 74. It denied that the "necessary suspensions of Boscov's businesses were ‘due to direct physical loss of or damage to Property’ caused by a ‘Covered Cause of Loss at the Location.’ " Id.

On July 28, 2020, Boscov's sued AGLIC, alleging breach of contract, breach of the duty of good faith and fair dealing, and requesting a declaratory judgment on issues related thereto. Id. ¶¶ 88–105. AGLIC filed its answer, and now moves for judgment on the pleadings. See Answer, ECF No. 5; Def.’s Mot., ECF No. 14; Def.’s Reply, ECF No. 21. Boscov's opposes the motion and makes two requests for judicial notice, the latter of which AGLIC seeks to strike. See Pl.’s Opp'n, ECF No. 19; Req., ECF Nos. 20, 24; Mot. to Strike, ECF No. 26; Pl.’s Opp'n, ECF No. 29. Both parties have submitted extensive supplemental authority. See ECF Nos. 27-1, 34–35, 42, 45, 54–57.

II. STANDARD

A. Motion for Judgment on the Pleadings

"After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." FED. R. CIV. P. 12(c). We will only grant the motion "if, on the basis of the pleadings, the movant is entitled to judgment as a matter of law." Fed Cetera, LLC v. Nat'l Credit Servs., Inc. , 938 F.3d 466, 469 n.7 (3d Cir. 2019) (quoting DiCarlo v. St. Mary Hosp. , 530 F.3d 255, 262 (3d Cir. 2008) ).

Motions for judgment on the pleadings are governed by "the same standards that apply to a Rule 12(b)(6) motion." Wolfington v. Reconstructive Orthopaedic Assocs. II PC , 935 F.3d 187, 195 (3d Cir. 2019) (quoting Revell v. Port. Auth. of N.Y. & N.J. , 598 F.3d 128, 134 (3d Cir. 2010) ). Accordingly, we must determine whether the complaint is supported by well-pleaded factual allegations. Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice" and "only a complaint that states a plausible claim for relief survives" dismissal. Id. at 678–79, 129 S.Ct. 1937 (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556–57, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

Third Circuit courts engage in a three-step process to determine the sufficiency of a complaint. First, we "tak[e] note of the elements [the] plaintiff must plead to state a claim." Connelly v. Lane Const. Corp. , 809 F.3d 780, 787 (3d Cir. 2016) (quoting Iqbal , 556 U.S. at 675, 129 S.Ct. 1937 ). Second, we "identify allegations that, ‘because they are no more than conclusions, are not entitled to the assumption of truth.’ " Id. (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ). Finally, we assume the veracity of well-pleaded factual allegations and then "determine whether they plausibly give rise to an entitlement to relief." Id. (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ).

For purposes of this analysis, we consider "the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents." Wolfington , 935 F.3d at 195 (quoting Mayer v. Belichick , 605 F.3d 223, 230 (3d Cir. 2010) ). We also "view the facts presented in the pleadings and the inferences to be drawn therefrom in the light most favorable to the nonmoving party." Sikirica v. Nationwide Ins. Co. , 416 F.3d 214, 220 (3d Cir. 2005) (citation omitted).

B. Judicial Notice

On a Rule 12(c) motion, we may take judicial notice in accordance with Federal Rule of Evidence 201. Inst. for Sci. Info., Inc. v. Gordon & Breach, Sci. Publishers, Inc. , 931 F.2d 1002, 1011 (3d Cir. 1991). Under Federal Rule of Evidence 201(b), a court "may take judicial notice of facts that are not subject to reasonable dispute because they are either ‘generally known within the trial court's territorial jurisdiction’ or ‘can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.’ " Sturgeon v. Pharmerica Corp. , 438 F. Supp. 3d 246, 257 (E.D. Pa. 2020) (quoting FED. R. EVID. 201(b)(2) ). A court "must take judicial notice if a party requests it and the court is supplied with the necessary information." FED. R. EVID. 201(c)(2).

While the Federal Rules of Evidence "allow a court to take judicial notice at any stage of the proceedings, ... it should be done sparingly at the pleadings stage." Victaulic Co. v. Tieman , 499 F.3d 227, 236 (3d Cir. 2007) (internal citation omitted). But see, e.g. , Oran v. Stafford , 226 F.3d 275, 289 (3d Cir. 2000) (taking judicial notice of "properly-authenticated public disclosure documents filed with the SEC" in reviewing a Rule 12(c) motion).

C. Motion to Strike

"The court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." FED. R. CIV. P. 12(f). "The purpose of a motion to strike is to clean up the pleadings, streamline litigation, and avoid unnecessary forays into immaterial matters." McInerney v. Moyer Lumber & Hardware, Inc. , 244 F. Supp. 2d 393, 402 (E.D. Pa. 2002) (citing Garlanger v. Verbeke , 223 F. Supp. 2d 596, 609 (D.N.J. 2002) ).

Rule 12(f) is directed at pleadings—not motions or briefs. See, e.g. , PG Publ'g Co. v. Aichele , 902 F. Supp. 2d 724, 735 (W.D. Pa. 2012), aff'd , 705 F.3d 91 (3d Cir. 2013) ; see also Bunn v. Perdue , 966 F.3d 1094, 1099 (10th Cir. 2020) ("Generally, ... motions, briefs, and memoranda may not be attacked by a motion to strike." (quoting Ysais v. N.M. Jud. Standard Comm'n , 616 F. Supp. 2d 1176, 1184 (D.N.M. 2009) )). That being said, "courts can entertain motions to strike beyond what Rule 12(f) provides." McGinnis v. Midland Funding LLC , No. 2:20-cv-05370-JDW, 2021 WL 1061198, at *1 (E.D. Pa. Mar. 19, 2021). Because "federal judges have the inherent power to manage cases that come before them," Williams v. Guard Bryant Fields , 535 F. App'x 205, 212 (3d Cir. 2013) (citation omitted), courts may consider "motions that a party captions a motion to strike but that are different in kind than the motions that Rule 12(f) contemplates." McGinnis , 2021 WL 1061198, at *1 ; see, e.g. , Lawrence v. Int'l Bus. Mach. Corp. , No. 12-cv-8433(DLC), 2017 WL 3278917, at *4 (S.D.N.Y. Aug. 1, 2017) (evaluating motion to strike a request for judicial notice).

D. Interpretation of Insurance Policies

"Under Pennsylvania law, ‘the interpretation of a contract of insurance is a matter of law for the courts to decide.’ " Allstate Prop. & Cas. Ins. Co. v. Squires , 667 F.3d 388, 391 (3d Cir. 2012) (quoting Paylor v. Hartford Ins. Co. , 536 Pa. 583, 640 A.2d 1234, 1235 (1994) ). Our objective is to discern the intent of the parties from the language of the policy. Id. To that end, we "read the policy as a whole and construe[ ] [it] according to the plain meaning of its terms." Ramara, Inc. v. Westfield Ins. Co. , 814 F.3d 660, 676 (3d Cir. 2016) (internal quotation marks and citation omitted). The policy "must be construed in such a manner as to give effect to all of its provisions." Sapa Extrusions, Inc. v. Liberty Mut. Ins. Co. , 939 F.3d 243, 258 (3d Cir. 2019) (internal quotation marks and citation omitted); see also Robinson v. Allstate Prop. & Cas. Ins. Co. , 306 F. Supp. 3d 672, 675 (E.D. Pa. 2018) ("The court should not consider isolated individual terms but should instead consider the entire contractual provision to determine the parties’ intent.") (citing NorFab Corp. v. Travelers Indem. Co. , 555 F. Supp. 2d 505, 509 (E.D. Pa. 2008)...