Kirschner v. State Farm Fire & Cas. Co.

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MATTHEW KIRSCHNER, et al., Plaintiffs, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

Civil Action No. 23-993

United States District Court, E.D. Pennsylvania

October 31, 2023

MEMORANDUM OPINION

GOLDBERG, J.

Plaintiffs Matthew Kirschner and Jennifer Kirschner, husband and wife bring breach of contract and bad faith claims against Defendant State Farm Fire and Casualty Company. Plaintiffs' claims arise out of Defendant's alleged failure to pay sufficient value under Plaintiffs' homeowner's policy for a loss suffered on their home. Pursuant to several subsections of Federal Rule of Civil Procedure 12, Defendant moves to dismiss the bad faith claim and part of the breach of contract claims and seeks to strike certain allegations from the Complaint. For the following reasons, I will grant the Motion in part and deny it in part.

I. FACTS SET FORTH IN THE COMPLAINT

The following facts are set forth in the Complaint.^[1] Plaintiffs purchased a comprehensive homeowners' insurance policy (the “Policy”) from Defendant to insure their home and personal property located at 948 Avenue F, Langhorne, PA 19047 (the “Insured Premises”). (Compl. ¶¶ 1-3, 6-7.)

On March 24, 2022, while the Policy was in full force and effect, there was a fire in an upstairs bathroom on the Insured Premises, resulting in both fire damage and water damage from third-party fire mitigation efforts. Plaintiffs allege that the Insured Premises suffered a loss in excess of some of the coverage limits. (Id. ¶ 8.)

On the same date, Plaintiffs reported their insured property damage claims to Defendant. According to Plaintiffs, the losses are such that, absent repair and remediation, the Insured Premises are inhabitable. Defendant, however, has repeatedly denied the payment of full coverage, despite proof of the loss being supplied by Plaintiffs. As such, Plaintiffs have been unable to rebuild the Insured Premises. (Id. ¶¶ 10-15, 22.)

On February 7, 2023, almost one year after the loss, Plaintiffs filed suit in the Bucks County Court of Common Pleas, setting forth the following claims: (1) breach of contract (dwelling); (2) breach of contract (other structures); (3) breach of contract (personal property); (4) breach of contract (loss of use); (5) breach of contract (generally); and (6) bad faith. Defendant removed the case to federal court and filed the current Motion to Dismiss and/or Strike.

II. MOTION TO STRIKE

A. Standard of Review

Federal Rule of Civil Procedure 12(f) provides that “the court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent or scandalous matter.” Fed.R.Civ.P. 12(f). Content is immaterial when it “has no essential or important relationship to the claim for relief.” Donnelly v. Commonw. Fin. Sys., No. 07-cv-l88l, 2008 WL 762085, at *4 (M.D. Pa. Mar. 20, 2008) (quoting Del. Healthcare, Inc. v. MCD Holding Co., 893 F.Supp. 1279, 1291-92 (D. Del. 1995)).

Content is impertinent when it does not pertain to the issues raised in the complaint. Id. Scandalous material “improperly casts a derogatory light on someone, most typically on a party to the action.” Id. (citing Carone v. Whalen, 121 F.R.D. 231, 233 (M.D. Pa. 1988)).

“The standard for striking a complaint or a portion of it is strict, and ‘only allegations that are so unrelated to the plaintiffs' claims as to be unworthy of any consideration should be stricken.'” Steak Umm Co., LLC v. Steak'Em Up, Inc., No. 09-cv-2857, 2009 WL 3540786, at *2 (E.D. Pa. Oct. 29, 2009) (citing Johnson v. Anhorn, 334 F.Supp.2d 802, 809 (E.D. Pa. 2004)). “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 and Hardware, Inc., 244 F.Supp.2d 393, 402 (E.D. Pa. 2002). Although “[a] court possesses considerable discretion in disposing of a motion to strike under Rule 12(f),” such motions are “not favored and usually will be denied unless the allegations have no possible relation to the controversy and may cause prejudice to one of the parties, or if the allegations confuse the issues in the case.” Ford-Greene v. NHS, Inc., 106 F.Supp.3d 590, 615 (E.D. Pa. 2015) (quoting River Road Dev. Corp. v. Carlson Corp., No. 89-7037, 1990 WL 69085, at *3 (E.D. Pa. May 23, 1990)).

B. Motion to Strike Demands for Attorneys' Fees in Counts I-V

Defendant first seeks to strike Plaintiffs' demand for attorney's fees in connection with their breach of contract claims. “A demand for damages that is not recoverable as a matter of law may be stricken pursuant to Rule 12(f).” Rivera v. Dealer Funding, LLC, 178 F.Supp.3d 272, 281 (E.D. Pa. 2016). Pennsylvania law does not allow awards for attorney's fees in suits for ordinary breach of contract “unless there is express statutory authorization, a clear agreement of the parties[,] or some other established exception.” McMullen v. Kutz, 985 A.2d 769, 775 (Pa. 2009). Where a court can determine from the face of the complaint that a plaintiff cannot recover attorneys' fees, such a request may be stricken. See, e.g., Berger v. Hahnemann Univ. Hosp., No. 17-cv-2295, 2017 WL 5570340, at *9 (E.D. Pa. Nov. 17, 2017), aff'd, 765 Fed.Appx. 699 (3d Cir. 2019); Craker v. State Farm Mut. Auto. Ins. Co., No. 11-cv-225, 2011 WL 1671634, at *5 (W.D. Pa. May 3, 2011).

Here, the claims at issue are based on an insurance contract, which does not allow for the recovery of attorney's fees. Indeed, Plaintiffs do not address, let alone oppose, the Motion to Strike the demand for attorneys' fees. Absent articulation of any basis upon which attorney's fees may be awarded, I will strike this demand from the Complaint.

C. Motion to Strike Paragraphs 5, 50(o), 51, and 52

Defendant next moves to strike several paragraphs from the Complaint. I address them individually:

i. Paragraph 5:

Paragraph 5 of the Complaint states: “At all times relevant Plaintiffs were without contributory negligence, comparative negligence, and/or other wrongful conduct.”

Defendant contends that this paragraph refers to contributory and comparative negligence, neither of which pertains to a breach of contract action. Plaintiffs do not oppose the Motion. As Defendant is correct that the concepts of contributory and comparative negligence have no relevance to a breach of contract and bad faith action, I will strike this paragraph.

ii. Paragraph 50(o)

Paragraph 50(o) of the Complaint states: “Defendant, acting through its duly authorized agents, servants, workmen, employees and/or representatives, including but not limited to Brandon Freeman, has engaged in bad faith conduct toward Plaintiffs, through the following acts and omissions, but not limited to these acts and omissions: . . . [i]ntentionally issuing an insurance policy to Plaintiffs that is insufficient to fully cover Plaintiffs' losses.”

Defendant contends that this alleged conduct does not state a case for bad faith since the bad faith statute does not extend to conduct by an insurer that is unrelated to the denial of the claim for benefits. Plaintiffs again offer no response.

“[T]he essence of a bad faith claim [is] the unreasonable and intentional (or reckless) denial of benefits.” UPMC Health Sys. v. Metro Life Ins. Co., 391 F.3d 497, 505 (3d Cir. 2004). Although courts applying Pennsylvania law have extended bad faith beyond mere denial of claims, the cases all involve bad faith claims related to specific conduct of the insurer following issuance of a policy. Mitch's Auto. Serv. Ctr., Inc. v. State Auto. Mut. Ins. Co., No. 10-cv-3413, 2011 WL 5042480, at *7 (E.D. Pa. Oct. 24, 2011). A claim that the drafting of the policy language itself was in bad faith is not actionable under Pennsylvania law. Id.; see also Sewell v. Liberty Life Ins. Co., No. 11-cv-1721, 2012 WL 1424879, at *4 (M.D. Pa. Apr. 25, 2012) (holding that § 8371 applies to the bad faith handling or payment of claims or benefits under an insurance policy and does not apply to a dispute over contract terms).

As Plaintiffs have failed to identify any authority allowing a bad faith claim premised on the drafting of the insurance policy, I will strike this allegation.

iii. Paragraph 51

Paragraph 51 of the Complaint states: “Defendant's claims handling is part of a general business practice and course of conduct involving multiple violations of Pennsylvania statutory law and/or Insurance Regulations.”

Defendant seeks to strike this claim, alleging that it bears no relevance to its conduct in this particular matter. Defendant asserts that this paragraph of the Complaint simply is “an attempt to smear the reputation and character of Defendant, and to improperly sway the jury.” (Def.'s Mot. to Dismiss 18.)

Although Plaintiff has not offered a response to this argument, I find no basis to strike the allegation. In Pennsylvania, to succeed on a bad faith claim, a plaintiff-insured must prove (1) that the insurer did not have a reasonable basis for denying benefits under the policy, and (2) that the insurer knew or recklessly disregarded its lack of a reasonable basis in denying the claim. Northwestern Mut. Life. Ins. Co. v. Babayan, 430 F.3d 121, 137 (3d Cir. 2005). Allegations that Defendant has engaged in a general business practice of violating state insurance law could be relevant to Plaintiffs' assertion that Defendants were on notice regarding criticized claims handling practices that underscore the bad faith claim here. See Zaloga v. Provident Life & Acc. Ins. Co. of Am., 671 F.Supp.2d 623, 634 (M.D. Pa. 2009). In turn, such evidence would bear on proof that Defendant knew or recklessly disregarded its lack of a reasonable basis in denying the claim.

Ultimately such evidence may not be admissible at a trial. See Dinner...