Cooper v. Liberty Mut. Gen. Ins. Co.

SYREETA COOPER & DAVID COOPER, h/w v. LIBERTY MUTUAL GENERAL INSURANCE COMPANY

Civil Action No. 22-618

United States District Court, E.D. Pennsylvania

April 14, 2022

MEMORANDUM

John R. Padova, J.

Plaintiffs initiated this action in the Philadelphia Court of Common Pleas against their insurance carrier, Liberty Mutual General Insurance Company (“LM General”), after they sustained injuries in a motor vehicle accident and LM General refused to pay them underinsured motorist (“UIM”) benefits. The Complaint asserts claims against LM General for breach of contract, bad faith pursuant to 42 Pa. Cons. Stat § 8371, and violation of the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa. Stat § 201-9.2. LM General removed the action to this Court based on diversity jurisdiction and then filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) seeking dismissal of the bad faith and UTPCPL claims. In their response to LM General's Motion, Plaintiffs request that we remand the case, asserting that we lack subject matter jurisdiction over the matter. For the reasons that follow, we deny Plaintiffs' request to remand and grant LM General's Motion to Dismiss.

I. BACKGROUND

The Complaint alleges the following facts. On June 11, 2017, Plaintiff Syreeta Cooper was driving a 2016 Chevrolet Traverse on Roosevelt Boulevard in Philadelphia with Plaintiff David Cooper as her passenger. (Compl. ¶ 5.) Plaintiffs were stopped at a red traffic signal, when their vehicle was struck in the rear by Arnold Bernstein, an underinsured motorist. (Id. ¶¶ 5-8.) The accident resulted solely from Bernstein's negligence. (Id. ¶ 17.) Syreeta sustained serious and permanent injuries in the accident, including disc space narrowing at ¶ 5-S1; disc protrusion to the left L4-L5; cervical, thoracic and lumbar spine strain and sprain; cervical and lumbar radiculopathy bilaterally; post-concussion syndrome; and post-traumatic stress disorder. (Id. ¶ 10.) David also sustained serious and permanent injuries, including diffuse broad-based disc protrusion eccentric to the left at ¶ 3-4 and C5-6; focal midline disc herniation at ¶ 2-3; disc bulging at ¶ 4-5 and C6-7; disc protrusion at ¶ 3-4, L4-5, and L5-S1; chronic cervical spine and lumbosacral strain and sprain; cervical and lumbar radiculopathy; and shoulder sprains. (Id. ¶ 11.)

Bernstein had an automobile insurance policy with Progressive Insurance Company (”Progressive”), which had bodily injury liability limits of $15, 000 per person and $30, 000 in the aggregate. (Id. ¶ 6.) Progressive paid those insurance benefits to four claimants, with Syreeta receiving $9, 000 and David receiving $14, 000. (Id. ¶ 6.) Plaintiffs' bodily injury damages, however, are valued at much more than the amount Plaintiffs received from Progressive. (Id. ¶ 8.) At the time of the accident, Syreeta had an automobile insurance policy with LM General (the “Policy”), which provided UIM benefits of $25, 000 per person and $50, 000 per accident. (Id. ¶ 4.) Plaintiffs notified LM General of Progressive's offer to settle their bodily injury claims against Bernstein for the above amounts, and LM General consented in writing to Plaintiffs' acceptance of the settlement offer and execution of a general release as to Bernstein. (Id. ¶ 9.) LM General did not tender UIM coverage to Plaintiffs under the Policy, did not offer to settle Plaintiffs' UIM claim under the Policy, and refused to pay Plaintiffs' claim under the Policy. (Id. ¶¶ 21, 23, 26.)

The Complaint contains three Counts. Count I asserts a breach of contract claim. Count II asserts a statutory bad faith claim pursuant to 42 Pa. Cons. Stat. § 8371. Count III asserts a claim for unfair and deceptive practices under the UTPCPL. Each Count seeks damages in a sum “in excess of $50, 000.” (Compl. at 5, 8, and 9.)

II. LEGAL STANDARD

In reviewing a motion to dismiss pursuant to Rule 12(b)(6), we “consider only the complaint, exhibits attached to the complaint, [and] matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents.” Alpizar-Fallas v. Favero, 908 F.3d 910, 914 (3d Cir. 2018) (quoting Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010)). “We accept the factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff” Shorter v. United States, 12 F.4th 366, 371 (3d Cir. 2021) (citing Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011)). However, we “are not bound to accept as true a legal conclusion couched as a factual allegation.” Wood v. Moss, 572 U.S. 744, 755 n.5 (2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

The complaint must set forth “a short and plain statement of the claim, ” Fed.R.Civ.P. 8(a)(2), that gives the defendant “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Moreover, the complaint must allege “‘sufficient factual matter to show that the claim is facially plausible,' thus enabling ‘the court to draw the reasonable inference that the defendant is liable for [the] misconduct alleged.'” Warren Gen. Hosp., 643 F.3d at 84 (quoting Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)). “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). In the end, we will grant a motion to dismiss brought pursuant to Rule 12(b)(6) if the factual allegations in the complaint are not sufficient “to raise a right to relief above the speculative level.” Geness v. Admin. Off. of Pa. Cts., 974 F.3d 263, 269 (3d Cir. 2020) (quoting Twombly, 550 U.S. at 555), cert. denied 141 S.Ct. 2670 (2021).

III. DISCUSSION

A. Request to Remand ^[1]

Plaintiffs argue that the case should be remanded to state court for lack of subject matter jurisdiction because LM General has failed to meet its burden of showing that the amount in controversy exceeds $75, 000. “[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . . . to the district court of the United States for the district . . . embracing the place where such action is pending.” 28 U.S.C. § 1441(a). Pursuant to 28 U.S.C. § 1332, district courts have diversity jurisdiction “over civil actions where the matter in controversy exceeds the sum or value of $75, 000 and is between ‘citizens of different states.'” McCann v. Newman Irrevocable Tr., 458 F.3d 281, 286 (3d Cir. 2006) (quoting 28 U.S.C. § 1332(a)(1)). Where removal is based on diversity jurisdiction, “the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy, ” although the notice of removal may assert the amount in controversy if “the initial pleading seeks . . . a money judgment, but the State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded.” 28 U.S.C. § 1446(c)(2)(A)(ii). “[R]emoval of the action is proper on the basis of an amount in controversy asserted [in the Notice of Removal] if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds [$75, 000].” Id. § 1446(c)(2)(B). The removing party “bears the burden of showing, at all stages of the litigation, that the case is properly before the federal court.” Frederico v. Home Depot, 507 F.3d 188, 193 (3d Cir. 2007) (citations omitted).

Pennsylvania law does not allow a demand for a specific sum of damages where damages are not liquidated, see Pa. R. Civ. P. 1021(b), and, consistent with that rule, the Complaint in this case seeks damages “in excess of $50, 000” in connection with each Count. LM General states in its Notice of Removal that the amount in controversy exceeds $75, 000 because Plaintiffs have alleged damages in excess of $50, 000 for each Count of the Complaint and have also sought punitive damages, attorneys fees and costs. (Notice of Removal ¶ 10.) Plaintiffs now argue that LM General has failed to meet its burden of proof that the amount in controversy exceeds $75, 000 because the Policy provide UIM benefits of just $50, 000 per accident and Plaintiff “is seeking less than $75, 000 to amicably resolve this litigation.” (Pls.' Mem. at 11 of 12.)

However, “[a] district court's determination as to the amount in controversy must be based on the ‘plaintiff's complaint at the time the petition for removal was filed.'” Werwinski v. Ford Motor Co., 286 F.3d 661, 666 (3d Cir. 2002) (quoting Steel Valley Auth. v. Union Switch Div., 809 F.2d 1006, 1010 (3d Cir.1987)), abrogated on other grounds by Earl v. NVR, Inc., 990 F.3d 310 (3d Cir. 2021). We consider whether “the plaintiff's actual monetary demands in the aggregate exceed the [jurisdictional] threshold, irrespective of whether the plaintiff states that the demands do not.” Morgan v. Gay, 471 F.3d 469, 474-75 (3d Cir. 2006). Furthermore, in calculating the plaintiff's demands, we must include demands not only for compensatory damages, but also for punitive damages and attorney's fees. Frederico, 507 F.3d at 198-99 (citations omitted).

Here as noted above, the Complaint asserts three claims against LM General-for breach of contract, bad faith, and violation of the UTPCPL. Each of the three Counts seeks money damages in excess of $50, 000. (See Compl. at 5, 8, and 9.) In laying out the factual basis for these claims, the Complaint alleges that both Plaintiffs suffered “serious and permanent injuries, ” and that the LM...