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Home My WebLink About93-1748 CivilE. RUTH THIELEMANN, Plaintiff V. NATIONWIDE INSURANCE COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 1748 CIVIL 1993 IN RE: DEFENDANT'S PRELIMINARY OBJECTIONS BEFORE BAYLEY and OLER JJ ORDER OF COURT AND NOW, this 3rJ day of December, 1993, upon consideration of Defendant's Preliminary Objections, as well as the briefs and arguments presented in the matter, Defendant's Preliminary Objections are DENIED. Defendant is granted 20 days to file an answer to Plaintiff's Complaint. BY THE COURT, J. Wesley Olei J . J. David W. DeLuce, Esq. Joseph L. Hitchings, Esq. 301 Market Street P.O. Box 109 Lemoyne, PA 17043-0109 Attorneys for Plaintiff Jered L. Hock, Esq. P.O. Box 93 Harrisburg, PA 17108-0093 Attorney for Defendant rc E. RUTH THIELEMANN, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION - LAW NATIONWIDE INSURANCE COMPANY, Defendant NO. 1748 CIVIL 1993 IN RE: DEFENDANT'S PRELIMINARY OBJECTIONS BEFORE BAYLEY and OLER. JJ. OPINION AND ORDER OF COURT Oler, J. At issue in the present case are preliminary objections filed by Nationwide Insurance Company (Defendant) to a complaint filed by E. Ruth Thielemann (Plaintiff). More specifically, Defendant has filed a demurrer to, and motion to strike, a portion of Plaintifrs Complaint. For the reasons set forth in this Opinion, Defendant's preliminary objections are denied. It is well settled in Pennsylvania that "[t]he question presented by a demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible, and where a doubt exists as to whether a demurrer should be sustained, this doubt should be resolved in favor of overruling it." Scarpitti v. Weborg, 530 Pa. 366, 369, 609 A.2d 147, 148-49 (1992). In considering this question, the court must keep in mind that "a demurrer admits every well -pleaded fact and all inferences reasonably deducible therefrom." Rutherford v. Presbyterian -University Hospital, 417 Pa. Super. 316, 321-22, 612 A.2d 500, 502 (1992). Moreover, "a demurrer is not to be sustained and the complaint dismissed unless the law says with certainty that no recovery is possible." Cian frani v. Commonwealth of Pennsylvania, Employees' Retirement Board, No. 1748 Civil 1993 505 Pa. 294, 297, 479 A.2d 468, 469 (1984). The facts of this case, as set forth in Plaintiff's Complaint, may be summarized as follows: On March 30, 1989, Defendant issued an insurance policy to Plaintiff providing coverage for "disability resulting directly and exclusively from bodily injuries arising out of the maintenance or use of a motor vehicle."' In addition to providing "standard comprehensive general liability coverage,"' this "policy also included a work loss benefit in the amount of $25,000.00 to cover the income loss of an insured.i' The aforementioned policy was in effect when Plaintiff was involved in an automobile accident on June 5, 1989.4 In addition to suffering "personal injuries and property damage" as a result of the accident,' Plaintiff has also been "prevented ... from prosecuting her occupation as a real estate agent."' Plaintiff avers that, "[d]espite repeated demands ..., the Defendant has refused and continues to refuse to pay the income loss benefit or any part thereof duly owing under the insurance policy."' 1 Plaintiffs Complaint, Paragraph 3. Z Plaintiffs Complaint, Paragraph 4. 3 Plaintiffs Complaint, Paragraph 5. 4 Plaintiffs Complaint, Paragraphs 6-7. "Plaintiff's Complaint, Paragraph 8. 6 Plaintiffs Complaint, Paragraph 10. 7 Plaintiffs Complaint, Paragraph 13. 2 No. 1748 Civil 1993 In Count II of her Complaint, Plaintiff avers that "Defendant has assumed the responsibility to pay for ... Plaintiffs medical bills for the treatment of injuries sustained [in the accident]."' Moreover, it is averred that "Defendant has no reasonable and/or sufficient basis for its refusal to pay the income loss benefits to ... Plaintiff," 9 and that "Defendant has acted in bad faith toward... Plaintiff by refusing to tender payment of the income loss benefits to ... Plaintiff."10 In response to Plaintiff's Complaint, Defendant has filed preliminary objections in the nature of a demurrer to, and a motion to strike, Count II of Plaintiff's Complaint. More specifically, Defendant contends the following: that 1) "[b]ad faith damages under 42 Pa. C.S.A. 8371 are not available for matters which allegedly occurred before the effective date of the statute, July 1, 1990"; and that 2) "[b]ad faith damages are not available in matters relating to motor vehicle accidents for the reason that such damages as may be available ... are limited as set forth under the Motor Vehicle Responsibility Law 75 Pa. C.S.A. §1701 et seq."11 With respect to Defendant's contention that bad faith damages are not available s Plaintiff's Complaint, Paragraph 20. 9 Plaintiff's Complaint, Paragraph 22. 10 Plaintiff's Complaint, Paragraph 23. In Count I of her Complaint, Plaintiff also alleges that Defendant breached its contract with Plaintiff. However, since Defendant's Preliminary Objections are addressed to Count II of the Complaint only, Count I will not be discussed in depth in this Opinion. " Defendant's Preliminary Objections, Paragraph 3. 3 No. 1748 Civil 1993 for matters which occurred before July 1, 1990, it should be noted that the relevant statutory provision reads as follows: 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. (3) Assess court costs and attorney fees against the insurer. Act of February 7, 1990, P.L. 11, §3, 42 Pa. C.S. §8371 (1993 Supp.). With regard to this statute, the Federal District Court for the Eastern District of Pennsylvania has held that Section 8371 of the Judicial Code cannot be applied to alleged bad faith actions which occurred prior to its effective date of July 1, 1990. Liberty Mutual Insurance Co. v. Paper Manufacturing Co., 753 F. Supp. 156 (E.D. Pa. 1990).12 That Court has also held that where an insurer has initially denied a claim in bad faith prior to July 1, 1990, "subsequently reasserting that denial after July 1, 1990 does not constitute continuing acts of bad faith giving rise to liability" under Section 8371. Lombardo v. State Farm Mutual Automobile Insurance Co., 800 F. Supp. 208, 214 (E.D. Pa. 1992). l2 See Okkerse v. Prudential Property and Casualty Insurance Co., Pa. Super. n.2, 625 A.2d 663, 666 n.2 (1993) (citing Liberty Mutual Insurance Co. v. Paper Manufacturing Co. for the proposition that Section 8371 cannot be applied retroactively). 4 No. 1748 Civil 1993 However, upon a review of Plaintiff's Complaint, we cannot say, as a matter of law, that Plaintiff is not entitled to pursue her claim of bad faith against Defendant. In her Complaint, Plaintiff alleges that she was involved in an automobile accident on June 5, 1989. The Complaint contains no indication as to when Defendant first denied Plaintiffs claim for lost income. Absent such an indication, it cannot be determined whether Plaintiffs claim for bad faith rests upon the type of retroactive application of Section 8371 disapproved in the federal decisions. We cannot therefore consider favorably Defendant's position that Count II of Plaintiff's Complaint must be dismissed on such a ground. Defendant also avers that Plaintiff's bad faith claim is preempted by the Motor Vehicle Financial Responsibility Law, 75 Pa. C.S. §§1701 et seq." It should be noted that the Superior Court of Pennsylvania has recently addressed this issue in Okkerse v. Prudential Property and Casualty Insurance Co., _ Pa. Super. _, 625 A.2d 663 (1993). While recognizing that Section 8371 of the Judicial Code and Section 1797 of the Motor Vehicle Financial Responsibility Law have the potential to conflict with one another, the Okkerse Court observed that a plaintiff must meet different standards to be entitled to recovery under each of these statutes. Thus, the Court reasoned, the statutes cannot be considered to be in irreconcilable conflict. Moreover, the Court noted that, at the pleading stage of the case, "it is not clear that [the plaintiff] actually is See Act of February 1, 1984, P.L. 26, §3, 75 Pa. C.S. §§1701 et seq. (1993 Supp.). No. 1748 Civil 1993 will be able to recover under both [Section 8371 and Section 1797]." Id. at _, 625 A.2d at 667. Consequently, the Court held that dismissal of either claim during the initial phase of the case would be "premature." Id. Based upon the holding of Okkerse, Plaintiffs bad faith claim will not be dismissed at this point on the ground that it is preempted by the Motor Vehicle Financial Responsibility Law. ORDER OF COURT AND NOW, this3-'Jday of December, 1993, upon consideration of Defendant's Preliminary Objections, as well as the briefs and arguments presented in the matter, Defendant's Preliminary Objections are DENIED. Defendant is granted 20 days to file an answer to Plaintiffs Complaint. David W. DeLuce, Esq. Joseph L. Hitchings, Esq. 301 Market Street P.O. Box 109 Lemoyne, PA 17043-0109 Attorneys for Plaintiff Jered L. Hock, Esq. P.O. Box 93 Harrisburg, PA 17108-0093 Attorney for Defendant :rc BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr. J. 0