Grudkowski v. Foremost Insurance Company
3:12-cv-01847
M.D. Penn.Mar 5, 2013Background
- Grudkowski purchased Foremost antique/classic auto policies that purported to provide stacked UM/UIM coverage.
- MVFRL allows stacking unless a valid waiver is executed; the waiver language is statutorily prescribed.
- Grudkowski alleges the Classic and Antique policies actually limit inter-policy stacking and render stacked benefits illusory.
- Foremost’s policies contain inter-policy stacking language but also specify occupancy-based definitions that allegedly restrict stacking.
- Plaintiffs allege Foremost represented stacked coverage but accepted premiums without delivering it; claims include breach of contract, UTPCPL, unjust enrichment, and statutory bad faith.
- The court granted Foremost’s Rule 12(b)(6) motion, dismissing all counts with prejudice and denying leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract viability | Grudkowski alleges Foremost promised stacked coverage and breached by not providing it. | Foremost contends antique policies do not obligate inter-policy stacking under MVFRL. | Breach of contract claim dismissed; policies lawful and not obligated to stack. |
| UTPCPL claim plausibility | Grudkowski alleges misrepresentation of stacked coverage and deceptive practices. | Foremost argues policy limits and MVFRL compliance negate UTPCPL violations. | UTPCPL claim dismissed; no deceptive practice supported by law. |
| Unjust enrichment viability | Grudkowski pleads unjust enrichment as alternative relief. | Existence of a written contract bars unjust enrichment claims when a valid agreement exists. | Unjust enrichment claim dismissed; contract governs; no dispute over contract existence. |
| Statutory bad faith claim | Grudkowski argues pre-contract and policy drafting conduct may support bad faith. | Toy limits §8371 to post-formation conduct in performance/denial of claims; pre-contract drafting not cognizable. | Statutory bad faith claim dismissed; no viable basis under Pennsylvania law. |
| Leave to amend | Grudkowski seeks opportunity to amend to state a viable claim. | Amendment would be futile given governing law and contract terms. | Leave to amend denied; dismissal with prejudice. |
Key Cases Cited
- Corbett, 630 A.2d 28 (Pa. Super. 1993) (antique policy coverage limited; reasonable expectations do not create coverage beyond clear language)
- Perry, ?? (E.D. Pa. 2002) (antique policies limited; district court aligned with Corbett)
- Fay v. Erie Ins. Grp., 732 A.2d 712 (Pa. Super. 1999) (UTPCPL misrepresentation requires clear policy terms; limited stacking upheld)
- Toy v. MetLife Ins. Co., 593 Pa. 20 (Pa. 2007) (bad faith not extendable to pre-contract false representations related to policy sale)
- Montanez v. HSBC Mortg. Corp., 876 F. Supp. 2d 504 (E.D. Pa. 2012) (unjust enrichment claim improper where contract exists)
- O'Donnell ex rel. Mitro v. Allstate Ins. Co., 734 A.2d 901 (Pa. Super. 1999) (bad faith extends to insurer's investigative/claims handling conduct)
- Brown v. Progressive Ins. Co., 860 A.2d 493 (Pa. Super. 2004) (bad faith may involve handling of UIM claims)
- Sewell v. Liberty Life Ins. Co., 2012 WL 1424879 (M.D. Pa. 2012) (noted but unpublished; pre-contract bad faith not established here)