Eberly v. Firemen's Insurance Company of Washington, D.C., 5:20-cv-05471

CYNTHIA G. EBERLY, Individually and as Executrix of the Estate of Bryan L. Eberly, deceased, Plaintiff v. FIREMEN'S INSURANCE COMPANY OF WASHINGTON, D.C.; BERKLEY INSURANCE COMPANY; BERKLEY MID-ATLANTIC GROUP, Defendants

No. 5:20-cv-05471

United States District Court, E.D. Pennsylvania

July 13, 2021

OPINION MOTION TO DISMISS, ECF NO. 5 - GRANTED

JOSEPH F. LEESON, JR. UNITED STATES DISTRICT JUDGE.

I. Introduction

This case involves a dispute about Underinsured Motorists benefits. Plaintiff, Cynthia G. Eberly, Individually and as Executrix of the Estate of Bryan L. Eberly, deceased, filed suit against Defendants, Firemen's Insurance Company Berkley Insurance Company, and Berkley Mid-Atlantic Group. Eberly seeks to obtain higher Underinsured Motorist (“UIM”) benefits and the stacking of UIM benefits from the policy issued to Decedent's employer, BJ Baldwin Electric, Inc., in connection with an automobile accident, in which Bryan L. Eberly was killed while driving a Baldwin vehicle. Defendants have moved to dismiss the Complaint which is granted for the reasons set forth below.

II. Background

The following facts are taken, in large part, from the Complaint:

On June 23, 2016, Bryan L. Eberly (“Decedent”) was permissively operating a motor vehicle owned by BJ Baldwin Electric, Inc. See Compl. ¶ 21, ECF No. 1-4. Decedent was driving eastbound on State Route 322, about three-quarter miles east of State Route 72 in Cornwall Borough, Lebanon County, Pennsylvania. Id. Danielle Beard was operating a vehicle owned by James and Linda Walp westbound on State Route 322. Id. ¶ 22. Beard permitted her vehicle to cross out of the westbound lane and go into the eastbound lane, striking Decedent's vehicle head-on at a high rate of speed, and causing serious injuries, damages, losses, and death to Decedent. Id. Following the collision, Decedent was initially trapped in his vehicle. Id. ¶ 23. He was responsive and able to answer questions posed by first responders. Id. Decedent was transported to Penn State Hershey Medical Center, where he later died as a result of the injuries suffered in the collision. Id. ¶ 24.

Decedent's vehicle was insured under a motor vehicle insurance policy issued by Defendants. Id. ¶ 27. Defendants issued a commercial auto policy to BJ Baldwin Electric, Inc., with a policy period of July 1, 2015, to July 1, 2016, Policy No. CPA 4202611-46. Id. ¶ 28. The named insured on the policy is BJ Baldwin Electric, Inc. Id. ¶ 34. The policy issued to Baldwin Electric provides a liability policy limit of $1, 000, 000.00 per accident, but only UIM coverage of $35, 000.00 per accident. Id. ¶ 29.

A UIM claim has been made to and accepted by Defendants under the commercial auto policy issued to Baldwin Electric. Id. ¶ 30. The vehicle operated by Beard and owned by the Walps, was an underinsured motor vehicle in accordance with Baldwin Electric's commercial auto policy, as the applicable liability coverage limits for the negligence of Beard did not provide the full amount that Eberly seeks to recover for the death of the Decedent. Id. ¶ 31.

In response to the claim, Defendants provided a signed rejection of UIM coverage at limits equal to liability coverage limits, dated July 12, 2010, indicating that UIM coverage was selected at a combined single limit of $35, 000.00. Id. ¶ 33. The signed rejection form provided by Defendants does not identify any policy number that the form relates to and does not indicate the capacity and/or the authority of the signatory to make the purported election on behalf of the named insured. Id. ¶¶ 35-36. Defendants also provided a signed rejection of stacked limits of UIM coverage, dated July 12, 2010, that contains the same alleged deficiencies as the rejection of UIM coverage. Id. ¶ 37.

In addition to the July 12, 2010 forms, Defendants provided similar rejection of stacking UIM coverage limits and rejection of UIM coverage at limits equal to liability coverage limits forms dated August 6, 2013. Id. ¶ 38. Both of the August 6, 2013 forms have the same alleged deficiencies as the July 12, 2010 forms. Id. ¶ 39.^[1]

On May 1, 2017, Defendants issued payment to Eberly in the amount of $35, 000.00 regarding the claimed losses arising from the collision. Id. ¶ 40.

On October 2, 2020, Eberly filed suit against Defendants in the Court of Common Pleas of Philadelphia County. See Compl. On November 2, 2020, Defendants removed the case to the United States District Court for the Eastern District of Pennsylvania. See Notice of Removal, ECF No. 1.

Under Count One of the Complaint, Eberly alleges that the signed rejection of stacking UIM coverage and rejection of UIM coverage at limits equal to liability coverage limits on the forms dated July 12, 2010, and August 6, 2013, violate Pennsylvania law as they do not indicate any policy number that the forms relate to and do not indicate the capacity and/or the authority of the signatory to make the purported election on behalf of the name insured. Id. ¶¶ 44-45. As a result, Eberly seeks a declaratory judgment that Decedent is entitled to UIM coverage at a limit equal to the liability limit set forth in the policy of $1, 000, 000.00 per accident and stacked UIM coverage in accordance with the number of vehicles insured by the policy. Id. ¶¶ 46-47. Additionally, under Count Two, Eberly demands judgment in her favor for UIM benefits in excess of $50, 000.00. Id. ¶ 51.

Defendants have filed a motion to dismiss on the grounds that BJ Baldwin, signing on behalf of the named insured to the policy, BJ Baldwin Electric Inc.: (1) validly elected a lower UIM benefit, and (2) validly rejected stacking of UIM benefits. Defendants further argue that: (3) Firemen's is the only entity that issued the Policy in question; therefore, the claims against Berkley Insurance Company and Berkley Mid-Atlantic Group should be dismissed, and (4) Eberly's claim seeking declaratory relief is duplicative of the claim for damages for higher UIM benefits, and should thus be dismissed as well. Mot. Dismiss 1, 7, ECF No. 5.

III. Legal Standards

A. Motion to Dismiss - Review of Applicable Law

Under Rule 12(b)(6), the court must “accept all factual allegations as true [and] construe the complaint in the light most favorable to the plaintiff.” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)) (internal quotation marks omitted). Only if “the ‘[f]actual allegations . . . raise a right to relief above the speculative level'” has the plaintiff stated a plausible claim. Id. at 234 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (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 (2009).

However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. (explaining that determining “whether a complaint states a plausible claim for relief . . . [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense”). “In deciding a Rule 12(b)(6) motion, a court must consider only 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.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010). Additionally, “a document integral to or explicitly relied upon in the complaint may be considered.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (internal quotations omitted). The defendant bears the burden of demonstrating that a plaintiff has failed to state a claim upon which relief can be granted. See Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005) (citing Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991)).

B. Contract Interpretation - Review of Applicable Law

“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, 390-91 (3d Cir. 2012) (quoting Paylor v. Hartford Ins. Co., 640 A.2d 1234, 1235 (Pa. 1994)). In interpreting an insurance contract, the court must ascertain the intent of the parties from the language of the policy. See id. When the terms in a policy are not defined, they should be construed in accordance with their natural, plain, and ordinary meanings. See Lititz Mut. Ins. Co. v. Steely, 785 A.2d 975, 978 (Pa. 2001). “The court should not consider isolated individual terms but should instead consider the entire contractual provision to determine the parties' intent.” Robinson v. Allstate Prop. & Cas. Ins. Co., 306 F.Supp.3d 672, 675 (E.D. Pa. 2018). When the policy language is clear and unambiguous, the court will give effect to that language. See Squires, 667 F.3d at 390-91. “Exclusions are strictly construed against the insurer.” Selko v. Home Ins. Co., 139 F.3d 146, 152 n.3 (3d Cir. 1998) (citing Standard Venetian Blind Co. v. American Empire Ins. Co., 469 A.2d 563, 566 (Pa. 1983)). “[A]n insured bears the initial burden to make a prima facie showing that a claim falls within the policy's grant of coverage....” State Farm Fire & Cas. Co. v. Estate of Mehlman, 589 F.3d 105, 111 (3d Cir. 2009).

IV. Analysis

A. The election of reduced UIM benefits complied with Pennsylvania law so as to limit the amount of insurance coverage available under the policy.

The Motor Vehicle Financial Responsibility Law (“MVFRL”) “requires every motor vehicle insurance policy issued in Pennsylvania to include an...