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United States District Court for the Eastern District of Pennsylvania
December 9, 2002, Filed
MEMORANDUM & ORDER
Berks Mutual Leasing Corp. ("Berks") brings this action against Travelers Indemnity Company of Illinois 1 [*2] ("Travelers"), alleging breach of the contractual duty of good faith and fair dealing (Count I) and violation of Pennsylvania's bad faith insurance statute, 42 PA. CONS. STAT. ANN. § 8371 (Count II). 2 Presently before the court is Travelers' motion to dismiss both counts of the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. For the reasons stated herein, defendant's motion to dismiss Count I will be denied but its motion to dismiss Count II will be granted.
This action stems from defendant insurer's decision not to renew several commercial insurance policies it had issued to plaintiff. According to plaintiff's amended complaint, the facts are as follows. 3
[*3] Plaintiff, as the insured, entered into three commercial insurance policies with defendant insurer. Amend. Compl. P 4. The policies were for a one-year period and were set to expire on May 1, 2001 unless defendant chose to renew the policies. Amend. Compl., Exh. A ("Commercial Property," "Commercial Automobile," and "Garage Coverage" insurance policies). During the year, plaintiff alleges that defendant engaged in numerous wrongful actions.
Plaintiff's initial complaint is that defendant wrongfully disputed an automobile claim. Amend. Compl. P 6-9. In April or May 2000, a motor vehicle, owned by plaintiff and insured by defendant, sustained severe damages such that it was found to be beyond repair. Id. at P 6. Plaintiff promptly reported a claim under its policy. Id. at P 6. An independent appraiser, hired by defendant, assessed the value of the claim to be $ 3,500. Id. at P7. Defendant offered to pay plaintiff $ 3,000. Id. at P 8. Plaintiff protested the value and two months later, defendant agreed to pay the full $ 3,500. Id. at P 9.
Plaintiff's second complaint is that defendant wrongfully issued a credit delinquency report against plaintiff. Soon after the [*4] dispute over the automobile claim, defendant informed plaintiff that it wanted to conduct a composite audit of plaintiff's business. Id. at P 10. Although the audit indicated that defendant actually owed plaintiff $ 730, defendant reported plaintiff as a delinquent payor to the credit reporting agency of Dun & Bradstreet Receivable Management Services. Id. at P 11-12. This reporting resulted in an unfavorable credit score for plaintiff and the initiation of collection remedies against plaintiff. Id. at P 13; Amend. Compl., Exh. B (Sept. 11, 2000 letter from Dun & Bradstreet Receivable Management Services to plaintiff seeking collection). As soon as plaintiff was notified of the unfavorable credit rating, it contacted defendant in order to make defendant aware of its error. Amend. Compl. P 15. Defendant eventually acknowledged the error both orally and in a letter to plaintiff dated October 13, 2000. Id. at P 16; Amend. Compl., Exh. C (Oct. 13, 2000 letter from Michael Kronander of defendant corporation to plaintiff). Defendant also contacted the collection agency and told it to cease its collection efforts against plaintiff. Id. at P 17; Amend. Compl., Exh. D (Sept. 27, 2000 letter [*5] from Danny Garvin of defendant corporation to plaintiff).
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2002 U.S. Dist. LEXIS 23749 *; 2002 WL 31761419
BERKS MUTUAL LEASING CORP., Plaintiff, v. TRAVELERS PROPERTY CASUALTY A MEMBER OF CITIGROUP, a/k/a A MEMBER OF TRAVELERS GROUP, n/k/a TRAVELER'S INSURANCE, Defendant.
Disposition: Motion to dismiss Count I denied and motion to dismiss Count II granted.
insurer, bad faith, good faith, renew, insurance policy, cause of action, defense motion, audit, refuse to submit, fair dealing, covenant, alleges, contractual duty, denial of claim, handling, courts, motion to dismiss, inspection, reporting, benefits, breaches
Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Dismissal, Involuntary Dismissals, Failure to State Claims, Business & Corporate Compliance, Industry Practices, Unfair Business Practices, Claims Investigations & Practices, Contracts Law, Contract Interpretation, Good Faith & Fair Dealing, Contracts Law, Types of Contracts, Covenants, Insurance Law, Liability & Performance Standards, Good Faith & Fair Dealing, General Overview, Breach, Disclosure Obligations by Insureds, Remedies, Penalties, Bad Faith & Extracontractual Liability, Elements of Bad Faith, Payment Delays & Denials, Payments, Governments, Legislation, Interpretation, Statutory Remedies & Rights, Torts, Business Torts, Bad Faith Breach of Contract, Claim, Contract & Practice Issues, Policy Interpretation, Family Law, Marital Duties & Rights, Causes of Action, Loss of Consortium