Miale v. Nationwide Ins. Co. of Am.

577 F.Supp.3d 388

Rose MIALE, Plaintiff,

v.NATIONWIDE INSURANCE COMPANY OF AMERICA, Defendant.

2:21-CV-00702-CCW

United States District Court, W.D. Pennsylvania.

Signed December 27, 2021

Christopher J. Regan, Bordas & Bordas, Wheeling, WV, Laura P. Pollard, Corporate, Pittsburgh, PA, for Plaintiff.

Bruce E. Rende, Joshua R. Guthridge, Robb Leonard Mulvihill LLP, Pittsburgh, PA, for Defendant.

MEMORANDUM OPINION

CHRISTY CRISWELL WIEGAND, United States District Judge

Before the Court is Defendant Nationwide Insurance Company of America's ("Nationwide") Motion to Dismiss Plaintiff Rose Miale's ("Ms. Miale") Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). See ECF No. 7. For the reasons that follow, Defendant's Motion will be GRANTED .

I. Background

On April 30, 2021, Ms. Miale filed a Complaint in the Court of Common Pleas of Allegheny County, Pennsylvania, against Nationwide. ECF No. 1 ¶ 7; see also , ECF No. 1-1. Nationwide timely removed the case to this Court on May 26, 2021 on the basis of diversity jurisdiction. 28 U.S.C. § 1446(d) ; ECF No. 1. In its notice of removal, Nationwide alleges that there is complete diversity because Nationwide is a citizen of Ohio and Ms. Miale is a citizen of Pennsylvania, and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332 ; ECF No. 1 ¶¶ 3-16.

Ms. Miale's husband, Ernst D. Miale II, was operating his motorcycle when he was killed by an intoxicated driver in August 2020. ECF No. 1-4 ¶ 5. Following her husband's death, Ms. Miale, acting as administrator of her husband's estate, filed a claim for all underinsured motorist benefits available under three policies: the Auto Policy,¹ the Motorcycle Policy,² and the RV Policy (together, the "Policies").³ Id. ¶¶ 6–8. State Farm, the liability insurance carrier for the tortfeasor, offered $100,000 under its policy and Nationwide consented to the settlement and waived subrogation against the tortfeasor. Id. ¶ 9. Between approximately January 19, 2021 and March 19, 2021, Ms. Miale and her counsel interacted with Nationwide's employees and counsel regarding the available coverage under each of the Policies. Id. ¶¶ 10–23. Nationwide confirmed that it was able to offer $200,000 on the Auto Policy and $100,000 on the Motorcycle Policy; however, Nationwide denied coverage under the RV Policy on the basis that Mr. Miale had signed a rejection of stacking form (the "RV Policy Stacking Waiver") and "was therefore not entitled to inter-policy stacking which would allow recovery of underinsured motorists benefits available on the RV Policy to be stacked on the underinsured motorists benefits available under the Auto Policy and the Motorcycle Policy." Id. ¶¶ 16–18. Nationwide relied on a Pennsylvania Supreme Court Case, Craley v. State Farm Fire and Cas. Co. , 586 Pa. 484, 895 A.2d 530 (2006), in denying coverage under the RV Policy. Id. ¶ 19.

Ms. Miale's counsel requested that Nationwide reconsider its denial and contended that the RV Policy Stacking Waiver rejected only intra -policy stacking under the RV Policy and did not prohibit inter -policy stacking among the Policies. Id. ¶¶ 20–21. Ms. Miale alleges that Nationwide refused to reconsider the request and has made no offers or payments under the RV Policy, which contains a $50,000.00 policy limit for underinsured motorists bodily injury coverage. Id. ¶¶ 22–23.

II. Legal Standard

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a claim. In reviewing a motion to dismiss, the court accepts as true a complaint's factual allegations and views them in the light most favorable to the plaintiff. See Phillips v. Cty. of Allegheny , 515 F.3d 224, 228 (3d. Cir. 2008). Although a complaint need not contain detailed factual allegations to survive a motion to dismiss, it cannot rest on mere labels and conclusions. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). That is, "a formulaic recitation of the elements of a cause of action will not do." Id. Accordingly, "[f]actual allegations must be enough to raise a right to relief above the speculative level," id. , and contain "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ "

Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). "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." Id. (quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ).

The United States Court of Appeals for the Third Circuit has established a three-step process for district courts to follow in analyzing a Rule 12(b)(6) motion:

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."

Burtch v. Milberg Factors, Inc. , 662 F.3d 212, 221 (3d Cir. 2011) (quoting Santiago v. Warminster Twp. , 629 F.3d 121, 130 (3d Cir. 2010) ). That said, under the notice pleading standard imposed by Federal Rule of Civil Procedure 8, even after the Supreme Court's decisions in Twombly and Iqbal , a plaintiff need only "allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims." Connelly v. Lane Constr. Corp., 809 F.3d 780, 789 (3d Cir. 2016) (finding that "at least for purposes of pleading sufficiency, a complaint need not establish a prima facie case in order to survive a motion to dismiss").

In deciding a "motion to dismiss, courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record." Schmidt v. Skolas , 770 F.3d 241, 249 (3d Cir. 2014) (citing Pension Benefit Guar. Corp. v. White Consol. Indus., Inc. , 998 F.2d 1192, 1196 (3d Cir. 1993) ). However, as an exception, a district court can consider "a document integral to or explicitly relied upon in the complaint, [such as] ... an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document." Borough of Moosic v. Darwin Nat'l Assurance Co. , 556 F. App'x 92, 95 (3d Cir. 2014) (internal citations and quotations omitted); see also Pension Benefit Guar. Corp. v. White Consol. Indus. , 998 F.2d 1192, 1196 (3d Cir. 1993) (noting that the rationale for this exception is that "the plaintiff obviously is on notice of the contents of the document.")

III. Analysis

Ms. Miale alleges that Nationwide breached its contract by wrongfully denying coverage and refusing to pay underinsured coverage pursuant to the RV Policy or reasonably negotiate or settle Ms. Miale's claims (Count I) and acted in bad faith by refusing to adjust, evaluate and negotiate Ms. Miale's claims for underinsured motorists coverage benefits under the RV Policy (Count II). Id. ¶¶ 24–32.

Ms. Miale contends that the RV Policy Stacking Waiver upon which Nationwide based its rejection was a rejection of only intra -policy stacking under the RV Policy. ECF No. 1-4 ¶ 20. According to Ms. Miale, nothing in the RV Policy prohibited inter -policy stacking and thereby prevented Ms. Miale from recovering under the RV Policy in addition to the Auto Policy and the Motorcycle Policy. Id.

In analyzing Defendant's Motion to Dismiss, the Court may consider the RV Policy and the RV Policy Stacking Waiver as documents integral to and explicitly relied upon in the complaint. ECF No. 1-4 ¶ 18 (alleging that Nationwide denied coverage under the RV Policy because Mr. Miale had signed an MVFRL-compliant rejection of stacking form); see ECF No. 1-5 (RV Policy); ECF No. 8-1 (Rejection of Stacked Underinsured Motorist Coverage Form).

A. Insurance Stacking Under Pennsylvania Law

Under Pennsylvania law, which neither party disputes applies here, there are two types of insurance stacking: inter -policy stacking and intra -policy stacking. Inter -policy stacking "occurs when an insured aggregates coverage under one policy issued by a carrier with one or more other policies issued by that carrier," whereas intra -policy stacking "occurs when an individual combines the insurance coverage of individual vehicles within their policy." Butta v. GEICO Cas. Co. , 400 F. Supp. 3d 225, 228 n.12 (E.D. Pa. 2019) (internal citations and quotations omitted).

Section 1738 of Pennsylvania's Motor Vehicle Financial Responsibility Law ("MVFRL") provides for stacking of uninsured and underinsured benefits in motor vehicle insurance policies. 75 Pa. Cons. Stat. Ann. § 1738(a). An insured may waive stacking of such benefits in exchange for reduced insurance premiums. 75 Pa. Cons. Stat. Ann. § 1738(b). The Pennsylvania Supreme Court has found that the waiver provision of the MVFRL— § 1738(b) —allows for the waiver of both intra- and inter- policy stacking. Craley v. State Farm Fire and Casualty Co. , 586 Pa. 484, 895 A.2d 530, 536-40 (2006). And, § 1738(d) of the MVFRL sets forth required form language for a valid waiver, or rejection, of stacking. 75 Pa. Cons. Stat. Ann. § 1738(d) – (e).

However, the Pennsylvania Supreme Court has found that § 1738(d) by its terms references only waivers of intra -policy stacking because the form language prescribed by § 1738(b) specifically refers only to a waiver of benefits under "the policy" (as opposed to multiple policies ); as such, a waiver in the form prescribed by § 1738(d) is insufficient on its own to establish a valid waiver of inter -policy stacking. Craley , 895 A.2d at 541 ; see also , Donovan v. State Farm Mut. Auto. Ins. Co. , 392 F. Supp. 3d 545, 550 (E.D. Pa. 2019) (noting that the required § 1738(d) language "cannot standing alone...