Seibel v. Nat'l Union Fire Ins. Co. of Pittsburgh

655 F.Supp.3d 212

Nicholas SEIBEL, individually and on behalf of all others similarly situated, Plaintiff, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PAand American International Group, Inc., doing business as AIG, Defendants.

22 Civ. 1483 (ER)

United States District Court, S.D. New York

Signed February 13, 2023

Brian C. Gudmundson, Michael J. Laird, Rachel Kristine Tack, Zimmerman Reed, P.L.L.P., Minneapolis, MN, Carey Alexander, Joseph Peter Guglielmo, Scott + Scott, L.L.P., New York, NY, Gary F. Lynch, Jamisen Etzel, Nicholas Colella, Lynch Carpenter, LLP, Pittsburgh, PA, for Plaintiff.

Maaren Alia Shah, Michael Barry Carlinsky, Ryan Adam Rakower, Quinn Emanuel Urquhart & Sullivan LLP, New York, NY, for Defendants.

OPINION AND ORDER

Ramos, District Judge:

Seibel, individually and on behalf of others similarly situated, brings this class action against National Union Fire Insurance Company of Pittsburgh, PA ("NUFIC") and American International Group, Inc. ("AIG"), alleging that they unlawfully overcharged travel insurance premiums by offering no distinction between pre- and post-departure coverage. Before the Court is defendants' motion to dismiss the action in its entirety for failure to state a claim. For the reasons set forth below, the motion is GRANTED.

I. BACKGROUND¹

AIG is a global insurance and financial services firm incorporated in Delaware and with a principal place of business in New York City. ¶¶ 13-14. AIG also has an office in Pennsylvania, where it engaged in the insurance business at all relevant times. ¶ 13. In 2006, AIG acquired Travel Guard (also known as AIG Travel), which is a provider of travel insurance programs and emergency travel assistance. ¶ 16. NUFIC is an AIG subsidiary that underwrites policies sold by AIG Travel. ¶ 17. It is headquartered in New York, incorporated in Pennsylvania, and maintains a branch office in Pittsburgh. Id. Nicholas Seibel was at all relevant times a resident of Pittsburgh, Pennsylvania. ¶ 12.

On February 27, 2020, Seibel purchased a travel policy (the "First Policy") from defendants for a trip to France scheduled to begin on October 7, 2020. ¶¶ 43, 56; see Travel Guard Policy No. 944616762, Doc. 1-1.² Seibel paid a single, undivided premium of $440.98 for the First Policy, which provided bundled coverage for certain pre- and post-departure risks. ¶¶ 1, 56. The First Policy did not delineate what portion of the lump-sum premium, if any, was attributable to only pre-departure coverage, and what portion, if any, was linked only to post-departure coverage. ¶ 50. Pre-departure coverage encompassed cancellation for certain "[u]nforseen events," such as "sickness, injury, or death of an [i]nsured, [f]amily member, [t]raveling companion, [b]uisiness [p]artner, or [h]ost at [d]estination[.]" ¶¶ 29-31. Post-departure coverage encompassed certain events that could occur during a trip, such as delays, lost baggage, or medical emergencies. ¶ 38.

The first page of the First Policy provided in bolded, blue font: "PLEASE READ THIS DOCUMENT CAREFULLY!" See Doc. 1-1 at 3 (emphasis in the original). Approximately two inches below that warning was a "FIFTEEN DAY LOOK" provision (the "Cancellation and Refund Provision"), which stated:

You may cancel this insurance by giving the Company or the agent written notice within the first to occur of the following: (a) 15 days from the [e]ffective [d]ate of your insurance; or (b) your scheduled [d]eparture [d]ate. If you do this, the Company will refund your premium paid provided no insured has filed a claim under this Policy. After this 15 day period, the premium is non-refundable.

Id. (emphasis in the original).

Under the section "Effective and Termination Dates," sub-section "Pre-Departure Benefits," the First Policy specified that pre-departure benefits would become effective at "12:01 A.M. local time on the date following payment to [NUFIC] . . . of the required cost." Doc. 1-1 at 5. Under the subsequent subsection, "Post-Departure Benefits," the First Policy further provided that "all coverages"—apart from "Rental Vehicle Damage Coverage," which would become effective at the time the insured signed the rental agreement and took possession of the vehicle—would begin on "12:01 A.M. local time on the scheduled [d]eparture [da]te shown on the travel documents." Id.

Additionally, the First Policy stated that it was applicable only to residents of Pennsylvania and 13 other states, not including New York. ¶ 46.

The AIG Travel webpage, moreover, included a satisfaction guarantee (the "Satisfaction Guarantee"), which provided: "if you are not completely satisfied, you can receive a full refund of the cost, minus the service fee." ¶ 16 (citing Explore AIG's Timeline, AIG, https://www.aig.com/about-us/history/timeline (last visited Feb. 17, 2022)).³

Seibel cancelled his trip to France on August 24, 2020, approximately six months after he purchased the First Policy and approximately one-and-a-half months before the scheduled departure date. ¶¶ 56-57. That same day, Seibel contacted defendants to request a refund of premium that he had paid. ¶ 58. On August 25, 2020, AIG responded to the request: "We have reviewed your request for a premium refund. It is our policy that all premium refund requests must be submitted within 15 days of the effective date of the policy, however we are pleased to offer you a travel insurance credit voucher in the amount of $440.98." Id.

Ten days later, on September 4, 2020, Seibel purchased a second travel policy from defendants (the "Second Policy"), which covered an upcoming Caribbean cruise scheduled to depart from Miami, Florida on November 7, 2021. ¶¶ 62-64; see Travel Guard Policy No. 946119552, Doc. 2-2.⁴ Seibel paid a single premium in the amount of $342.58 for the Second Policy. The Second Policy was identical to the First Policy in all material respects, but for the fact that it was applicable only to residents of Pennsylvania. ¶ 46.

In June 2021, the cruise company cancelled the trip, approximately five months before the scheduled departure date. ¶¶ 44, 62, 65. Shortly thereafter, Seibel requested a refund of the $342.58 lump-sum premium, but defendants denied his request, reasoning that the 15-day Cancellation and Refund Provision had expired approximately nine months earlier, on September 19, 2020, 15 days after Seibel purchased the Second Policy. ¶ 66.

II. PROCEDURAL HISTORY

On February 23, 2022, Seibel filed the instant action, alleging: (1) breach of the implied covenant of good faith and fair dealing; (2) unjust enrichment; and (3) violation of the Pennsylvania Consumer Protection Act. Seibel also seeks injunctive relief; he asks the Court to enjoin defendants from applying the Cancellation and Refund Provision to post-departure coverage and from lumping together premiums for pre- and post-departure coverage; he also requests that the Court order defendants to refund any "unearned" portion of the policy premiums. ¶¶ 83-113.⁵ Defendants filed the motion to dismiss on May 3, 2022. Doc. 28.

III. STANDARD

Under Rule 12(b)(6), a complaint may be dismissed for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. See Koch v. Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir. 2012). The Court is not required, however, to credit "mere conclusory statements" or "[t]hreadbare recitals of the elements of a cause of action." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.' " Id. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). More specifically, the plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant has acted unlawfully." Id. If the plaintiff has not "nudged [his] claims across the line from conceivable to plausible, [the] complaint must be dismissed." Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

IV. DISCUSSION

Choice of Law

Seibel argues that New York law should apply to his claims, while defendants contend Pennsylvania law should apply. As a threshold matter, the Court must therefore decide the law of which of these states to apply.⁶

"A federal court sitting in diversity applies the choice-of-law principles of the state in which it sits." First Hill Partners, LLC v. BlueCrest Capital Mgmt., 52 F. Supp. 3d 625, 632 (S.D.N.Y. 2014). Given that diversity is the basis for jurisdiction in this case, the Court here applies the choice-of-law analysis of New York.

New York's "most significant relationship," or "center of gravity test," governs the choice-of-law analysis for breach of the implied covenant and unjust enrichment claims. See In re LIBOR-Based Fin. Instruments Antitrust Litig., 299 F. Supp. 3d 430, 596 (S.D.N.Y. 2018) ("In the absence of a governing choice-of-law provision, . . . a [plaintiff]'s implied covenant claim will be governed by the law determined under the center of gravity analysis set forth by the New York Court of Appeals."); see also Phillips v. Reed Grp., Ltd., 955 F. Supp. 2d 201, 238 (S.D.N.Y. 2013) ("Under New York choice of law principles, . . . the choice of law for contract and quasi-contract claims [including unjust enrichment] is determined by a 'center of gravity' analysis.") (citations omitted).

In administering the center of gravity test, "[courts] are required to apply the...