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HomeMy WebLinkAbout98-7325 civilScott's Pine Tree Inn, Inc. :IN THE COURT OF COMMON PLEAS OF :CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. No. 98-7325 Civil Erie Insurance Exchange Defendant Jury Trial Demanded Scott's Pine Tree Inn, Inc., and Gregory A. Scott and Linda A. Scott, Plaintiffs v. No. 99-4857 Civil Donald G. Weitzel, Jr., Donald G. .. Weitzel, Sr., Weitzel Insurance Agency, Erie Insurance Group and Erie Insurance Exchange, Defendants Jury Trial Demanded IN RE DEFENDANTS' PRELIMINARY OBJECTIONS ORDER OF COURT BEFORE HOFFER, P.J., HESS, AND GUIDO, JJ. AND NOW, June 28, 2000, after consideration of the briefs submitted by both parties, the facts of record, and the applicable law, defendants' motion to dismiss the complaint on the grounds of the existence of a judgment of non pros is denied, as the judgment was not against a legal entity. Defendants' motion to dismiss based on the limitations clause within the insurance policy is denied as the defense of statute of limitations may not be brought as a preliminary objection. Defendants' preliminary objection as to the demurrer to count three is Scott's Pine Tree Inn, Inc. :IN THE COURT OF COMMON PLEAS OF :CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. No. 98-7325 Civil Erie Insurance Exchange Defendant Jury Trial Demanded Scott's Pine Tree Inn, Inc., and Gregory A. Scott and Linda A. Scott, Plaintiffs v. No. 99-4857 Civil Donald G. Weitzel, Jr., Donald G. Weitzel, Sr., Weitzel Insurance ~. Agency, Erie Insurance Group and Erie Insurance Exchange, Defendants Jury Trial Demanded IN RE DEFENDANTS' PRELIMINARY OBJECTIONS BEFORE HOFFER, P.J., OLER, and HESS, J.J., The above actions have been consolidated for the purposes of addressing defendants' preliminary objections. Both cases arise from the same operative set of facts. Defendant Erie Insurance Exchange had insured Scott's Pine Tree Inn (hereinafter "the Inn") for its interest in the restaurant building and business since June of 1996. At all relevant times, the Scotts, plaintiffs herein, owned and operated the Inn, and throughout the investigation of the fire loss claim and filing of these cases, they have acted as the shareholders and officers of the corporation. Plaintiffs allege that defendants Donald G. Weitzel, Jr., and Donald J. Weitzel, Sr. were employees, agents, or servants of the Weitzel Insurance Agency, Erie Insurance Group, and Erie Insurance Exchange. On March 25, 1996, plaintiffs Gregory and Linda Scott entered into an installment sales agreement with Harlan and Jean Kahler to sell the restaurant business and premises. Plaintiffs allege that on June 11, 1996, defendant Erie, through its alleged agents, the Weitzel defendants, issued an insurance binder to the plaintiffs for $328,500.00 for loss of building and $150,000.00 for loss of content. The binder purportedly identified the Kahlers as mortgagee or lienholder. Plaintiffs charge that defendant Donald.Weitzel, Jr., understood that the sale of the Inn was via an installment sales agreement, and that plaintiffs would be covered under such a policy as mortgagees/lienholders. On August 11, 1997, a fire occurred at the Inn. On April 2, 1998, after an investigation, Erie Insurance Exchange denied the Inn's claim for insurance proceeds. Plaintiffs have initiated three cases in this Court by Writ of Summons against the above-named defendants. The Inn filed its first Writ of Summons against Erie Insurance Group on January 21, 1998. On June 18, 1998, a judgment of non pros was entered against the Inn for failure to file a timely complaint. The plaintiffs have not sought relief from the first judgment of non pros. On December 31, 1998, the Inn filed a lawsuit against Erie Insurance Exchange by Writ of Summons. On January 20, 1999, the defendants removed the case to the United States District Court for the Middle Distdct of 2 Pennsylvania. Subsequently, the Inn and the Scotts jointly filed a third Writ of Summons in Cumberland County against Erie Insurance Group, Erie Insurance Exchange and the Weitzel defendants on August 11, 1999. On October 1, 1999, plaintiffs filed a complaint in the District Court. On December 13, 1999, Judge Kane of the District Court remanded this case to Cumberland County Court. In the complaint filed in the District Court, the plaintiffs allege that (1) the Erie defendants breached their contract of insurance with the plaintiffs; (2) all of the defendants intentionally or negligently misrepresented the extent of coverage provided under the policy; (3) all of the defendants breached their duty of fair dealing and good faith; (4) all of the defendants were negligent, resulting in harm to plaintiffs; (5) all of the defendants have violated 42 Pa.C.S.A. §8371 in bad faith; and (6) the Erie defendants libeled and slandered plaintiffs Gregory and Linda Scott. Defendants preliminarily object to the complaint plaintiffs filed in the District Court. Defendants make the following objections: (1) plaintiffs may not maintain the present action against the Erie defendants because they never petitioned to vacate or open the judgment of non pros; (2) plaintiffs may not maintain this suit because the insurance policy provides that suit must be brought within two years after the loss; (3) the counts of intentional or fraudulent misrepresentation, breach of the duty of good faith and fair dealing, negligence, bad faith, and defamation are pled with insufficient specificity under 1028(a)(4); (4) Gregory and Linda Scott as individuals are not properly part of this action; and (5) Erie 3 Insurance Group is not properly part of this action. We will address each of these objections in turn. DISCUSSION Defendants first claim that because a judgment of non pros was entered against the Inn in its first suit on June 18, 1998, the plaintiffs may not continue with their suit until they file a petition to strike the judgment. In order to file a subsequent suit on the same cause of action for which a non pros has been entered, one must petition the court and satisfy a three-pronged test to open a judgment of non pros. See Pal R.C.P. 3051, Gates v. Servicemaster Commercial Service, 428 Pa. Super. 568, 631 A.2d 677 (1993). However, defendants alleged in a prior motion that Erie Insurance Group, the defendant named in the first Writ, was not a legal entity.1 We find, therefore, that since the original Writ was a nullity from the beginning, the subsequent judgment of non pros is also a nullity and cannot form the basis of a motion to dismiss brought by other defendants.2 Defendants' second preliminary objection is that plaintiffs are barred from maintaining claims against the Erie defendants because plaintiffs allegedly did ~ In a signed pleading before the Federal Court, defendants stated that "the Inn sued Erie Insurance Group, a trade name only." Defendant Erie Insurance Exchange's Motion to Dismiss the Complaint by Scott's Pine Tree Inn, Inc., In It's (sic) Second Action As Captioned Above, p.3, para.9. 2 A plaintiff may not join a personal representative of a dead person who was never a party to an action prior to their death. It follows that an original action against a dead person is a nullity. Cf., Valentin v. Cartagena, 375 Pa.Super. 493,544 A.2d 1028 (1988), Williamsport Firemen Pension Bds. I & II v E.F. Hutton & Co. 567 F.Supp. 140 (1983, MD Pa), Thompson v Peck, 320 Pa. 27, 181 A. 597 (1935). 4 not bring suit within the two years required under the insurance policy. However, defendants may not raise the defense of the statute of limitations in the form of a preliminary objection. Pennsylvania Rule of Civil Procedure 1030 states that "all affirmative defenses including but not limited to ... statute of limitations ... shall be pleaded in a responsive pleading under the heading "New Matter." See Pa. R.C.P. 1030(a). A defense based on breach of a contractual provision limiting the time for the filing of suit must be pleaded as new matter in a responsive pleading. When the defense is raised in this manner, the plaintiff, by reply, can then assert facts, if any exist, which constitute ~a waiver of such contractual limitation or impose an estoppel upon the defendant to assert such a defense. See Graham v. Harleysville Ins. Co., 429 Pa. Super. 444, 447, 632 A.2d 939, 940-941 (1993). Therefore, defendants must raise their argument in an answer, not a preliminary objection. Defendants' third preliminary objection is in the nature of a demurrer to the counts of intentional or fraudulent misrepresentation, breach of the duty of good faith and fair dealing, negligence, bad faith, and defamation. In general, where upholding a grant of preliminary objections would result in the dismissal of the action, a court is called upon to do so only in cases which are clear and free from doubt. Ambrose v. Cross Creek Condominiums, 412 Pa. Super. 1,602 A.2d 864 (1992). Since the sustaining of a demurrer results in a denial of a pleader's claim or a dismissal of his suit, a preliminary objection in the nature of a demurrer should be sustained only in cases that clearly and without a doubt fail to state a 5 claim for which relief may be granted. If the facts as pleaded state a claim for which relief may be granted under any theory of law, then there is sufficient doubt to require the preliminary objection in the nature of a demurrer to be rejected. Graham v. Harleysville Ins. Co., 429 Pa. Super. 444, 448-449, 632 A.2d 939, (1993), quoting County of Allegheny v. Commonwealth of Pennsylvania, 507 Pa. 360, 372, 490 A.2d 402,408 (1985). This is not a case in which plaintiffs have clearly failed to state claims upon which relief may be granted. Although plaintiffs may have colorable claims, plaintiffs have failed to allege these claims with .sufficient specificity under the rules of Pennsylvania Civil Procedure. Plaintiffs have filed a complaint in the Federal District Court that purportedly complies with the Federal Rules of Civil Procedure. Nonetheless, the complaint is styled as a notice pleading, as is required in Federal Courts, instead of a fact pleading, as is required by Pennsylvania State Courts. See Clark v. SEPTA, 691 A.2d 988 (Pa. Commw. 1997). Under 42 Pa. C.S.A. §5103, when a case is taken to a court which does not have jurisdiction of the matter, the court must transfer the record to the proper court, where the case is treated as if originally filed there. 42 Pa. C.S.A. §5103(a). The pleadings have the same effect as under the practice as under the United States Court, but the transferee court may require that they be amended to conform to the practice in this Commonwealth. 42 Pa. C.S.A. §5103(b). In accordance with this statute, we require the plaintiffs to amend the complaint in accordance with the Pennsylvania Rules of pleading, which require 6 more specificity than the Federal Rules. See Pa. R.C.P. 1019 (requiring that averments of fraud or mistake be averred with particularity, that averments of time, place, and items of special damage be specifically stated, that if any claim or defense is based upon a writing, the pleader shall attach a copy of the writing). Defendants have preliminarily objected in the nature of a demurrer to count three, the claim of breach of duty of fair dealing and good faith. It is true that both the Pennsylvania and Federal Courts have ruled that Pennsylvania common law does not create an action based on bad faith for an insurer's failure to pay. D'Ambrosio v. Pennsylvania National Mutual Insurance Co., 494 Pa. 501, 431 A.2d 966 (1981). However, D'Ambrosio was superseded by 42 Pa. C.S.A. [}8371, which provides that in an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions: (1) award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%; (2) award punitive damages against the insurer; or (3) assess court costs and attorney fees against the insurer. See United Services Auto Ass'n. v. Foster, 783 F.Supp. 916 (1992). Therefore, we grant defendants' preliminary objection to count three to the extent that there is no common law bad faith action for an insurer's failure to pay. However, we note that plaintiffs may preserve count three to the extent that a remedy may be available under statutory provisions. 7 Defendants' fourth and fifth objections are that plaintiffs Gregory and Linda Scott as individuals are not properly part of this action, and that defendant Erie Insurance Group is not properly part of this action. We do not find it necessary to address defendant's objection as to Erie Insurance Group, as the plaintiffs and defendants have agreed that Erie Insurance Group is not properly a party to this action.3 With respect to defendant's preliminary objection as to the Scotts as individual plaintiffs, we note that preliminary objections are not available to raise factual arguments, such as misidentification of a party. See Trevellini v. West Realty Co., 289 Pa. Super. 84, 432 A.2d 1062 (!981). Therefore, defendants' objection relating to the inclusion of plaintiffs Gregory and Linda Scott as individuals is denied. 3 See FN 1, supra. 8