Case Information
*1 Before: CHAGARES, SHWARTZ, and ALDISERT, Circuit Judges. (Filed: February 27, 2014) ______________
OPINION
______________
SHWARTZ, Circuit Judge.
*2 Arlene Grudkowski (“Grudkowski”), on behalf of herself and a putative class, appeals the dismissal of her amended complaint that alleged that the classic car insurance sold by Foremost Insurance Company (“Foremost”) provided illusory coverage. We will affirm the District Court’s orders granting the motion to dismiss and denying Grudkowski’s motion for reconsideration. We will also deny the motion to certify the issue to the Pennsylvania Supreme Court.
I.
As we write principally for the benefit of the parties, we recite only the essential facts and procedural history. In 2007, Grudkowski purchased insurance from Foremost for two classic vehicles: a 1991 BMW 318i and a 1972 Mercedes 280 SEL. The vehicles were covered under separate policies, each of which provided $300,000 in uninsured motorist (“UM”) coverage and $300,000 in underinsured motorist (“UIM”) coverage. [1] Generally, Pennsylvania’s Motor Vehicle Financial Responsibility Law (“MVFRL”) provides for “stacking” [2] of UM and UIM coverage across multiple policies, which an insured can waive through the execution of a stacking rejection form. 75 Pa. Cons. Stat. § 1738. Foremost provided that rejection form to Grudkowski, but she declined to sign it, *3 thereby electing not to waive stacking with respect to either policy. The policies, however, contain provisions that limit UM and UIM coverage to accidents that actually involve the covered vehicles, making stacking effectively unavailable.
Grudkowski filed a putative class action complaint against Foremost in the Luzerne County Court of Common Pleas, which Foremost removed to the United States District Court for the Middle District of Pennsylvania. Grudkowski’s suit does not arise from an insurance claim, but rather she alleges that she and the putative class were harmed by having paid for stacking insurance coverage that was not included in their policies. In her amended сomplaint, Grudkowski alleges breach of contract, violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, 73 Pa. Cons. Stat. § 201-1 et seq. (“UTPCPL”), unjust enrichment, and bad faith under 42 Pa. Cons. Stat. § 8371. The District Court granted Foremost’s motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) and denied Grudkowski’s motion for reconsideration. Grudkowski appeals both orders.
II.
The District Court had diversity jurisdiction under 28 U.S.C. § 1332. We have
jurisdiction pursuant to 28 U.S.C. § 1291. Because the motions to dismiss and for
reconsideration both involve only legal questions, we review both orders de novo. Wiest
v. Lynch,
III.
A.
We first address Grudkowski’s breach of contract claim. To state a breach of
contract claim, a plaintiff must allege “(1) the existence of a contract, including its
essential terms, (2) a breach of a duty imposed by the contract and (3) resultant
damages.” Ocasio v. Prison Health Servs.,
Grudkowski argues that the policy’s restriction on stacking violates the MVFRL.
Even if compliance with the MVFRL is a term of the contract, it does not provide a basis
for relief. Section 1731 of the MVFRL requires insurance companies to offer UM and
UIM coverage, which an insured may reject. 75 Pa. Cons. Stat. § 1731. Sectiоn 1738(a)
states that, when an insured has multiple UM/UIM policies, the coverage available to the
insured is “the sum of the limits for each motor vehicle as to which the injured person is
an insured.” 75 Pa. Cons. Stat. § 1738(a). Thus, the statute contemplates stacking, but it
can be waived, see 75 Pa. Cons. Stat. § 1738(b)-(d), or limited by “clear and
unambiguous” policy language, St. Paul Mercury Ins. Co. v. Corbett,
In Corbett, for example, the Pennsylvania Superior Court held that where the
antique car insurance policy “clear[ly] and unambiguous[ly]” extended UM/UIM
coverage to only accidents involving the covered antique car, “an insured may not
complain that his or her reasonable expectations were frustrated by [such clear] policy
limitations.” Id. at 30. The court explained that limiting coverage in antique car
insurance poliсies is consistent with Pennsylvania public policy and the goals of the
*6
MVFRL,
[5]
which include “control[ling] spiraling insurance costs.” Id. at 32-33
(explaining that to allow stacking where the policy precludes it would “eradicate[]” “the
distinctions between antique automobile insuranсe and other types of insurance . . . and
premiums for antique vehicle insurance will be on par with personal automobile
insurance”); see also St. Paul Mercury Ins. Co. v. Perry,
B.
As to her UTPCPL claim, Grudkowski alleges that she and the putative class
“justifiably relied on [Foremost’s] representation that they would receive stacked [UM
and UIM] coverages . . . .” App. 207. Grudkowski’s UTPCPL claim fails. As the
Pennsylvania Superior Court stated in Fay v. Erie Insurance Group,
C.
Grudkowski’s unjust enrichment claim was also properly dismissed. Under
Pennsylvania law, “the doctrine of unjust enrichment is inapplicable when the
relationship between parties is founded upon a written agreement or express contract,
regardless of how harsh the provisions of such contracts may seem in the light of
subsequent happenings.” Wilson Area Sch. Dist. v. Skepton,
D.
Dismissаl of Grudkowski’s statutory bad faith claim under 42 Pa. Cons. Stat.
§ 8371 was also appropriate. Section 8371 permits the recovery of damages if, “[i]n an
action arising under an insurance policy,” an “insurer has acted in bad faith toward the
insured.” The term “bad faith” in section 8371 conсerns “the duty of good faith and fair
dealing in the parties’ contract and the manner by which an insurer discharged its
obligations of defense and indemnification in the third-party claim context or its
obligation to pay for a loss in the first party claim context.” Toy v. Metro. Life Ins. Cо.,
IV.
For the foregoing reasons, we will affirm the District Court’s orders dismissing
Grudkowski’s claims and denying her motiоn for reconsideration. Because Pennsylvania
making unjust enrichment a potentially available remedy, see, e.g., Montanez v. HSBC
Mortg. Corp. (USA),
law dictates the outcome here, we will also deny her motion for certification to the Pennsylvania Supremе Court.
Notes
[1] Grudkowski paid a total of $32 per year for the BMW’s UM/UIM coverage and $16 per year for the Mercedes’ UM/UIM coverage.
[2] Stacking allows insureds “to add the coverages available from different vehicles
and/or different policies to provide а greater amount of coverage available under any one
vehicle or policy.” McGovern v. Erie Ins. Grp.,
[3] This limitation is imposed by the policies’ definition of “insured” in the UM/UIM coverage context, which is limited to: “Yоu, any family member and any other person occupying your covered auto.” App. 213-18 (internal quotation marks omitted).
[4] Foremost argues that Grudkowski waived her arguments relating to the applicability of Corbett to her case by making them for the first time in her motion for reconsideration. Assuming the arguments were not waived, they are unpersuasive.
[5] Corbett applied the amended MVFRL we apply here.
[6] Grudkowski and amicus curiae, the Pennsylvania Association for Justice, argue
that the Pennsylvania Supreme Court’s decision in Heller v. Pennsylvania League of
Cities and Municipalities,
Super. Ct. 1999),
[7] where the policy language preventing stacking is clear and the insurer was lawfully charging for insurance in accordance with the MVFRL, the plaintiff’s “remedy is to bring this matter to the attention of the legislature or the Insurance Commissioner.” Id. at 715. Foremost’s actions were consistent with the MVFRL. Although Grudkowski alleges that she and the putative class relied on Foremost’s “misrepresentation” of the that was effectively worthless. Grudkowski рaid policy premiums at a level, a total of $48 per year for UM/UIM coverage of two vehicles, that reasonably limited UM/UIM coverage to incidents that involved the insured vehicle, which is permissible under the MVFRL and Corbett.
[7] In Fay, the Superior Court affirmed the dismissal оf a UTPCPL claim against an
insurer where the plaintiff alleged that she purchased three accidental death policies, but
that the terms of the policies reduced their value by prohibiting the stacking of benefits.
[8] Grudkowski argues that she should nevertheless be permittеd to proceed on her unjust enrichment claim because plaintiffs may plead breach of contract and unjust enrichment claims in the alternative. Pleading in the alternative under Fed. R. Civ. P. 8(d)(2) is, of course, permissible, Cornell Cos. v. Borough of New Morgan, 512 F. Supp. 2d 238, 265-66 (E.D. Pa. 2007), but pleading both breach of contract and unjust enrichment is plausible only when the validity of the contract itself is actually disputed,