Opinion
CIVIL 3:15-CV-329
07-15-2022
KERRY ODGERS, Plaintiff, v. PROGRESSIVE NORTHERN INSURANCE COMPANY, Defendants.
Mariani, Judge
REPORT AND RECOMMENDATION
Martin C. Carlson, United States Magistrate Judge
I. Introduction
This case comes before the court on a motion for summary judgment filed by the defendant, Progressive Northern Insurance Company (“Progressive”). (Doc. 44). The plaintiff, Kerry Odgers, filed a complaint in state court against Progressive in 2015, alleging that Progressive failed to pay benefits to her when she was hit by a car and driver insured by Progressive. Progressive then removed the case against it to federal court. (Doc. 1). The plaintiff's complaint alleges claims for breach of contract, statutory bad faith, and state law negligence claims against Progressive.
The district court dismissed Count III of the complaint, a claim for breach of fiduciary duty, on June 23, 2015. (Doc. 10).
Progressive has now moved for summary judgment, arguing that there are no genuine disputes of material fact with respect to these claims. We agree as it pertains to the plaintiff's breach of contract claim, but after a review of the record, conclude that there are genuine disputes of material fact with respect to the bad faith and negligence claims brought against Progressive. Accordingly, for the reasons set forth below, we will recommend that Progressive's motion for summary judgment be granted in part and denied in part.
The factual background of this Report and Recommendation is taken from the parties' submissions to the extent they are consistent with the record. (Docs. 45, 46, 49-52).
Odgers' complaint against Progressive stems from an accident in 2013 in which she was struck by a car in a pedestrian crosswalk. The driver of the car, Rodrigo Solera, ran Odgers over with his vehicle while she was crossing the street in a crosswalk. Odgers suffered severe injuries, including a fractured tibia/fibula, as well as multiple cuts, abrasions, and swelling in her hips, ankles, and feet. Following this accident, counsel for the plaintiff contacted Progressive, Solera's insurer, and informed Progressive that Odgers would be filing a claim for first-party benefits. Progressive responded and informed Odgers' counsel that Odgers would need to fill out an application for personal injury protection (PIP) benefits, submit proof of her residency, and sign and authorization to release her medical records.
What then ensued was a somewhat contentious back-and-forth between Odgers and Progressive which led to state court litigation and the instant case. According to the plaintiff, Progressive refused to process her claim, which led her to file her first complaint in state court in April of 2013. However, the defendant contends that Odgers and her counsel refused to provide Progressive with information needed to process Odgers' claim. On this score, Odgers' counsel sent a letter to Progressive on February 13, 2013, requesting the policy declarations for Solera's policy with Progressive. Progressive informed counsel that the insured would need to consent to the release of this information, and ultimately, Solera did not consent. Thus, about a week later, Progressive sent forms to Odgers for her to fill out a PIP application and medical authorizations so that it could investigate her claim for first-party benefits. Odgers' counsel informed Progressive that he was not willing to discuss the claim until he received the policy declarations from Progressive. Ultimately, on April 18, 2013, Odgers filed a complaint against Progressive in the Luzerne County Court of Common Pleas.
After Odgers filed her complaint, Progressive continued to send the PIP application and authorization forms for her to fill out. In addition, on June 20, 2013, counsel for Progressive sent a letter to the plaintiff's counsel, which stated that Progressive was willing to pay Odgers' medical bills under Solera's policy, but that Odgers needed to fill out the application and provide proof of her residence. Odgers' attorney responded, claiming that Odgers did not need to fill out an application because she was not an insured under the policy with Progressive. In this letter, Odgers' attorney characterized Progressive's approach to the claim-payment of Odgers' medical bills only after she filled out the requisite paperwork-as a refusal to pay benefits under the policy, even though Progressive's June 20, 2013 correspondence to Odgers' attorney explicitly stated that it was willing to pay Odgers' medical expenses once she filled out the paperwork. However, it appears that at least some of the information Progressive was asking for, such as the plaintiff's address, was contained in the plaintiff's state court complaint.
After about a year of back-and-forth regarding the information Progressive needed to process the claim, and following a discovery ruling by the state court which ordered Progressive to release certain information, Progressive sent a letter to Plaintiff's counsel on May 2, 2014 in which Progressive agreed to pay first-party medical benefits to Plaintiff for her medical expenses and income loss and to pay certain attorney's fees in settlement of Plaintiff's claim. (Doc. 30, ¶ 6). On May 16, 2014, Progressive's counsel reiterated Progressive's offer to Plaintiff's counsel, while at the same time stating that:
Progressive's decision to afford coverage is by no means an admission of liability under the MVFRL nor is it an admission of wrongful conduct as alleged in the complaint. This matter could have been resolved with cooperation from you at the onset. Your unwillingness to cooperate prejudiced my client's ability to actively investigate this claim in order to determine if your client qualified for benefits under
this policy. A simple conversation with your client or an application for benefits would have resolved this matter. Progressive is simply trying to resolve the claim.(Id.) Given Progressive's offer to pay these benefits and attorney's fees, the motion to compel further discovery was deemed moot by the state court and that order was vacated by the court. (Doc. 30-3).
Ultimately, the plaintiff's medical bills and out of pocket expenses remained outstanding until October 29, 2015. Thus, in the interim, Odgers filed the instant case against Progressive in state court, and Progressive subsequently removed the case to federal court. (Doc. 1). On January 22, 2016, this federal court action was then stayed pending the conclusion of the ongoing state court litigation between the parties, and the stay was lifted on April 5, 2021. (Docs. 20, 22).
As we have noted, Progressive has now filed a motion for summary judgment, contending that there are no genuine issues of material fact with respect to the plaintiff's claims against it. The defendant argues that because it eventually paid the plaintiff's expenses, lost wages, and attorney's fees, the plaintiff's breach of contract claim fails. It also claims that it did not act in bad faith, and that the plaintiff's negligence claims are barred by the gist of the action doctrine. For her part, Odgers argues that Progressive breached the contract by refusing to pay her benefits, and that it acted in bad faith throughout the duration of the investigation. She further claims that her negligence claims are separate from the breach of contract claim, and thus are not barred by the gist of the action doctrine. The motion is fully briefed and is ripe for resolution. (Docs. 45, 50, 51).
After a review of the record, we conclude that the plaintiff's breach of contract claim fails, as the defendant paid the plaintiff all she was due under the insurance policy. We further conclude that the plaintiff's negligence per se claim based on Progressive's failure to reimburse DPW also fails as a matter of law. However, while we regard this as a close case, on balance we find that there are genuine issues of material fact with respect to the remaining claims against Progressive. Accordingly, we will recommend that the motion be granted in part and denied in part.
III. Discussion
A. Motion for Summary Judgment - Standard of Review
The defendant has moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, which provides that the court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Through summary adjudication, a court is empowered to dispose of those claims that do not present a “genuine dispute as to any material fact,” Fed.R.Civ.P. 56(a), and for which a trial would be “an empty and unnecessary formality.” Univac Dental Co. v. Dentsply Int'l, Inc., 702 F.Supp.2d 465, 468 (M.D. Pa. 2010). The substantive law identifies which facts are material, and “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine only if there is a sufficient evidentiary basis that would allow a reasonable fact finder to return a verdict for the non-moving party. Id., at 248-49.
The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir. 2004). Once the moving party has shown that there is an absence of evidence to support the non-moving party's claims, “the non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument.” Berckeley Inv. Group. Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006), accord Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the non-moving party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial,” summary judgment is appropriate. Celotex, 477 U.S. at 322. Summary judgment is also appropriate if the non-moving party provides merely colorable, conclusory, or speculative evidence. Anderson, 477 U.S. at 249. There must be more than a scintilla of evidence supporting the non-moving party and more than some metaphysical doubt as to the material facts. Id., at 252; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In making this determination, the Court must “consider all evidence in the light most favorable to the party opposing the motion.” A.W. v. Jersey City Pub. Schs., 486 F.3d 791, 794 (3d Cir. 2007).
Moreover, a party who seeks to resist a summary judgment motion by citing to disputed material issues of fact must show by competent evidence that such factual disputes exist. Further, “only evidence which is admissible at trial may be considered in ruling on a motion for summary judgment.” Countryside Oil Co., Inc. v. Travelers Ins. Co., 928 F.Supp. 474, 482 (D.N.J. 1995). Similarly, it is well-settled that: “[o]ne cannot create an issue of fact merely by . . . denying averments . . . without producing any supporting evidence of the denials.” Thimons v. PNC Bank, NA, 254 Fed.Appx. 896, 899 (3d Cir. 2007) (citation omitted). Thus, “[w]hen a motion for summary judgment is made and supported . . ., an adverse party may not rest upon mere allegations or denial.” Fireman's Ins. Co. of Newark New Jersey v. DuFresne, 676 F.2d 965, 968 (3d Cir. 1982); see Sunshine Books, Ltd. v. Temple University, 697 F.2d 90, 96 (3d Cir. 1982). “[A] mere denial is insufficient to raise a disputed issue of fact, and an unsubstantiated doubt as to the veracity of the opposing affidavit is also not sufficient.” Lockhart v. Hoenstine, 411 F.2d 455, 458 (3d Cir. 1969). Furthermore, “a party resisting a [Rule 56] motion cannot expect to rely merely upon bare assertions, conclusory allegations or suspicions.” Gans v. Mundy, 762 F.2d 338, 341 (3d Cir. 1985) (citing Ness v. Marshall, 660 F.2d 517, 519 (3d Cir. 1981)).
Finally, it is emphatically not the province of the court to weigh evidence or assess credibility when passing upon a motion for summary judgment. Rather, in adjudicating the motion, the court must view the evidence presented in the light most favorable to the opposing party, Anderson, 477 U.S. at 255, and draw all reasonable inferences in the light most favorable to the non-moving party. Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992). Where the non-moving party's evidence contradicts the movant's, then the non-movant's must be taken as true. Id. Additionally, the court is not to decide whether the evidence unquestionably favors one side or the other, or to make credibility determinations, but instead must decide whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented. Anderson, 477 U.S. at 252; see also Big Apple BMW, 974 F.2d at 1363. In reaching this determination, the Third Circuit has instructed that:
To raise a genuine issue of material fact . . . the opponent need not match, item for item, each piece of evidence proffered by the movant. In practical terms, if the opponent has exceeded the “mere scintilla” threshold and has offered a genuine issue of material fact, then the court cannot credit the movant's version of events against the opponent, even if the quantity of the movant's evidence far outweighs that of its opponent. It thus remains the province of the fact finder to ascertain the believability and weight of the evidence.Id. In contrast, “[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotation marks omitted); NAACP v. North Hudson Reg'l Fire & Rescue, 665 F.3d 464, 476 (3d Cir. 2011).
B. The Motion for Summary Judgement Should Be Granted in Part and Denied in Part.
Progressive first asserts that the plaintiff's breach of contract claim fails as a matter of law. The defendant contends that because it paid the plaintiff's medical expenses, lost wages, and attorney's fees under the policy, the plaintiff is not entitled to anything more under the insurance contract. Moreover, Progressive claims it did not act in bad faith because it was the plaintiff, not Progressive, who acted unreasonably by failing to provide information necessary to investigate her claim. Finally, Progressive argues that the plaintiff's negligence claims are barred by the gist of the action doctrine because they are essentially the same claims as the breach of contract claim.
We agree with the defendant with respect to the breach of contract claim and will recommend that this claim be dismissed. However, we conclude that the gist of the action doctrine does not bar the plaintiff's negligence claims, and that there are genuine issues of fact precluding summary judgment on the bad faith claim.
1. Breach of Contract Claim
In order to state a claim for breach of contract in Pennsylvania, Odgers must prove three elements: “(1) the existence of a contract, including its essential terms, (2) a breach of the contract, and (3) resultant damages.” Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C. v, Law Firm of Malone Middleman, P.C., 137 A.3d 1257 (Pa. 2016). Here, the parties do not dispute the existence of a contract. Rather, Progressive asserts that the plaintiff's breach of contract claim must fail because Progressive paid Odgers' claim under the policy, including medical expenses, lost wages, and attorney fees, and thus she has no damages. For her part, while Odgers acknowledges that Progressive paid her claim, she contends that she was unable to initially accept a settlement offer while Progressive was handling her claim, and thus she argues she is entitled to receive the value of the lost opportunity to invest the funds from the settlement offer during that period. Alternatively, she argues that she is entitled to nominal damages.
On this score, “[g]enerally, when an insurance company has paid the proceeds of an insurance policy, there can be no breach of contract claim because the insured has received what [s]he was due under the policy and therefore has no damages.” Rowe v. Nationwide Ins. Co., 6 F.Supp.2d 621, 629 (W.D. Pa. 2014) (citations omitted). Moreover, while a plaintiff may seek consequential damages as a result of an insurer's bad faith, such damages cannot be speculative. Greenwich Ins. Co. v. BBU Servs., Inc., 2014 WL 7344060, at *8 (W.D. Pa. Dec. 23, 2014) (citing Beever v. Cincinnati Life Ins. Co., 2003 WL 21321428, at *10-11 (Oh. App. Jun. 10, 2003) (rejecting theory of damages based on lost investment opportunity)).
In the instant case, it is undisputed that Progressive paid Odgers' claim for first party benefits with interest, as well as attorney fees. However, Odgers contends that she is entitled to the value of the lost opportunity to invest the settlement offer made by Progressive concerning the bodily injury portion of the claim because Progressive chose to reimburse the medical providers directly rather than reimburse the Department of Public Welfare. However, even if the plaintiff could show some error in Progressive's handling of the reimbursement of her expenses, we conclude that the plaintiff's request for damages on this score-the lost opportunity to invest these settlement funds-is too speculative at this juncture. See Greenwich Ins. Co., 2014 WL 7344060, at *8. Moreover, although the plaintiff alternatively contends she is entitled to nominal damages, she has not included a claim for nominal damages in her complaint. See Cohen v. Resolution Trust, 107 Fed.Appx. 287, 289-90 (3d Cir. 2015) (affirming trial court's denial of nominal damages award where plaintiff did not request nominal damages in the complaint); Welding Engineers Ltd. v. NFM/Welding Engineers, Inc., 352 F.Supp.3d 416, 434-35 (E.D. Pa. 2018) (same).
On this score, Odgers argues that she could not accept this settlement offer without triggering the reimbursement obligations in 62 P.S. § 1409, which states that if an individual has publicly funded healthcare that pays for her medical expenses, an insurer must reimburse the publicly funded healthcare provider. § 1409(a)(2). Odgers' medical expenses were paid by the Department of Public Welfare through her Medicaid benefits. However, Progressive opted to reimburse the medical providers directly, rather than reimbursing DPW.
In sum, as to the breach of contract claim the plaintiff has been provided all of the relief she is due under the insurance policy. Indeed, the Pennsylvania Superior Court found as much in its September 6, 2019 opinion, in which it found that “Progressive has provided or been ordered to provide all of the relief available to [Odgers] under the law. Thus, there is no longer a controversy regarding the reasonableness of Progressive's conduct.” (Doc. 45-1, at 9-10). The Court further noted that Odgers' allegations were more relevant to the bad faith claim presently before this court. (Id., at 10 n. 7). Accordingly, we recommend that the court grant summary judgment as to the plaintiff's breach of contract claim.
2. Bad Faith Claim
Next, Odgers asserts a bad faith claim against Progressive pursuant to 42 Pa. Cons. Stat. § 8371. Pennsylvania law provides for a cause of action by insurance customers against insurance companies that engage in bad faith claims handling, stating 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; (3) Assess court costs and attorney fees against the insurer.§ 8371.
Under Pennsylvania law, “[b]ad faith is a frivolous or unfounded refusal to pay, lack of investigation into the facts, or a failure to communicate with the insured.” Frog, Switch & Mfg. Co., Inc. v. Travelers Ins. Co., 193 F.3d 742, 751 (3d Cir. 1999) (citing Coyne v. Allstate Ins. Co., 771 F.Supp. 673, 678 (E.D. Pa. 1991) (bad faith is failure to acknowledge or act promptly on the claims or refusing to pay without reasonable investigation of all available information); Romano v. Nationwide Mut. Fire Ins. Co., 646 A.2d 1228 (1994)). “Ultimately, in order to recover on a bad faith claim, the insured must prove: (1) that the insurer did not have a reasonable basis for denying benefits under the policy; and (2) that the insurer knew of or recklessly disregarded its lack of a reasonable basis in denying the claim.” Nw. Mut. Life Ins. Co. v. Babayan, 430 F.3d 121, 137 (3d Cir. 2005). Case law sets exacting standards for any bad faith claim. As the Court of Appeals has observed:
In the primary case construing bad faith under 42 Pa.C.S.A. § 8371, Terletsky v. Prudential Property & Casualty Co., the Superior Court of Pennsylvania explained:
“Bad faith” on [the] part of [an] insurer is any frivolous or unfounded refusal to pay proceeds of a policy; it is not necessary that such refusal be fraudulent. For purposes of an action against an insurer for failure to pay a claim, such conduct imports a dishonest purpose and means a breach of a known duty (i.e., good faith and fair dealing), through some motive of self-interest or ill will; mere negligence or bad judgment is not bad faith.
649 A.2d 680, 688 (Pa. Super. 1994) (quoting Black's Law Dictionary 139 (6th ed. 1990)). Terletsky held that, “to recover under a claim of bad faith,” the insured must show that the insurer “did not have a reasonable basis for denying benefits under the policy and that the insurer knew of or recklessly disregarded its lack of reasonable basis in denying the claim.” Id. Thus, an insurer may defeat a claim of bad faith by showing that it had a reasonable basis for its actions. Horowitz v. Federal Kemper Life Assurance Co., 57 F.3d 300, 307 (3d Cir. 1995).
Our Court has described “the essence of a bad faith claim” as “the unreasonable and intentional (or reckless) denial of benefits.” UPMC Health Sys. v. Metro. Life. Ins. Co., 391 F.3d 497, 506 (3d Cir. 2004). Bad faith “must be proven by clear and convincing evidence and not merely insinuated.” Terletsky, 649 A.2d at 688 (collecting cases). As the District Court noted, this heightened standard requires the insured to provide evidence “so clear, direct, weighty and convincing as to enable a clear conviction, without hesitation, about whether or not the defendants acted in bad faith.” Bostick v. ITT Hartford Grp., 56 F.Supp.2d 580, 587 (E.D. Pa. 1999) (citations omitted).Amica Mut. Ins. Co. v. Fogel, 656 F.3d 167, 179 (3d Cir. 2011).
“Bad faith claims are fact specific and depend on the conduct of the insurer vis a vis the insured.” Padilla v. State Farm Mut. Auto. Ins. Co., 31 F.Supp.3d 671, 675 (E.D. Pa. 2014) (quoting Condio v. Erie Ins. Exchange, 899 A.2d 1136, 1143 (Pa. Super. Ct. 2006)). On this score, a host of factors may constitute evidence of bad faith. For example, “[a]n insurer's failure to investigate claims adequately may ... show bad faith.” Padilla, 31 F.Supp.3d at 676 (citing O'Donnell ex rel. Mitro v. Allstate Ins. Co., 734 A.2d 901, 906 (Pa. Super. 1999)). Likewise, “[d]elay is a relevant factor in determining whether bad faith has occurred....” Id. (quoting Kosierowski v. Allstate Ins. Co., 51 F.Supp.2d 583, 588 (E.D. Pa. 1999)). Similarly, “[t]he failure of the insurer to communicate with the claimant may be a basis for a bad faith claim.” Id. (citing Romano, 646 A.2d at 1232).
Here, we regard this as an exceedingly close case, in part because some of the delay in processing Odgers' claim may be attributable to a lack of cooperation between the plaintiff and Progressive. However, recognizing that the evidence also permits an inference of undue delay by Progressive even after the obstacles to payment were removed, we conclude that there are disputes of material fact which preclude the entry of summary judgment on this claim. The parties present two starkly contrasting factual narratives, each painting the other as acting unreasonably throughout the claims process. For its part, Progressive contends that it was willing to investigate and pay the plaintiff's claim for benefits after she filled out a PIP application and sent proof of residency and proof of no other insurance. However, Odgers' attorney refused to fill out the application for benefits, stating that Odgers was not an “insured” under the policy and therefore did not need to comply with those requirements. Thus, Progressive claims that it undertook its own investigation, attempting to verify the plaintiff's address and proof that she had no other insurance. Finally, in May of 2014, Progressive accepted the claim. Progressive then worked to identify the medical bills it needed to pay, and subsequently reimbursed the medical providers. Progressive also paid interest on the first party benefits, as well as attorney fees.
Curiously, the plaintiff's complaint appears to take a contrary view, stating at one point that Odgers was not considered an “insured” under any insurance policy (Doc. 1-1, ¶ 75), but later alleging that she was an “insured” under the policy with Progressive. (Id., ¶ 159).
Thus, from Progressive's point of view, any delay in obtaining benefits can be attributed to plaintiff's counsel being uncooperative throughout the investigation of the claim. However, the plaintiff paints a very different factual picture. On this score, Odgers contends that, although she refused to fill out a PIP application, she was not required to do so. She asserts that Progressive acted unreasonably when it refused to provide her with the policy declarations for Solera's policy. Thus, she had no choice but to file a suit against Progressive and Solera to obtain the information about the policy. She further asserts that Progressive had the information it needed to process her claim bur unreasonably delayed in doing so. For example, while Progressive claims that it was investigating the plaintiff's proof of residency as part of the claims investigation, Progressive actually sent Explanation of Benefits letters to Odgers' providers using her correct address, thus demonstrating that it possessed this address. Odgers also sent Progressive paystubs that reflected her current address, which she stated was the address at the time of the accident.
Odgers further asserts that Progressive unreasonably delayed payment of her benefits after it accepted her claim in May of 2014. On this score, Odgers points to the fact that instead of reimbursing DPW for her medical expenses, as it was required to do by statute, Progressive reimbursed the medical providers directly and expected the providers and/or Odgers to reimburse DPW. She claims that this further delayed the payment of her benefits until October of 2015, when the medical expenses and DPW's lien were settled.
Presented with these two drastically different narratives of how the claim for first party benefits was handled, we cannot conclude as a matter of law that Progressive did not act in bad faith. Rather, a factfinder could accept either version, as there is evidence to show that Progressive was asking for information it already possessed, and there is also evidence that the plaintiff was not cooperating with Progressive's investigation. Accordingly, these disputes should preclude summary judgment on this claim, and Progressive's motion should be denied as to the statutory bad faith claim.
3. Negligence Claims
Finally, Odgers asserts claims of negligence and negligence per se against Progressive, arguing that Progressive breached its statutory duties to promptly assess and pay her claim, as well as its duty to reimburse DPW. For its part, Progressive contends that these negligence claims are barred by the gist of the action doctrine, as the conduct underlying the allegations is rooted in Progressive's contractual duty under the policy and, thus, these claims should be subsumed by the breach of contract claim.
Under Pennsylvania law, the gist of the action doctrine precludes plaintiffs from “recasting ordinary breach of contract claims into tort claims.” eToll Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002); Williams v. Hilton Group PLC, 93 Fed.Appx. 384, 385-86 (3d Cir. 2004). While a contractual relationship, standing alone, does not bar a party from bringing a tort claim, “[t]he doctrine . . . forecloses a party's pursuit of a tort action for the mere breach of contractual duties, ‘without any separate or independent event giving rise to the tort.'” Brown & Brown, Inc. v. Cola, 745 F.Supp.2d 588, 619 (E.D. Pa. 2010) (citations omitted). The important difference, however, “is that [tort actions] lie from the breach of duties imposed as a matter of social policy.” Redevelopment Auth. v. Int'l Ins. Co., 685 A.2d 581, 590 (Pa. Super. Ct. 1996). “Whether the gist of the action doctrine applies in any particular setting is a question of law.” PPG Industries, Inc. v. Generon IGS, Inc., 760 F.Supp.2d 520, 528 (W.D. Pa. 2011) (citations omitted).
In the instant case, Odgers' negligence claim is grounded, not only in the duty owed to her by Progressive under the policy, but also the statutory duty to promptly pay her benefits in accordance with the MVFRL. Thus, we cannot conclude as a matter of law that Odgers is merely recasting her breach of contract claim as a tort claim, or that Progressive's duty to Odgers “arise[s] solely from a contract between the parties.” eToll, 811 A.2d at 19. Accordingly, the plaintiff should be permitted to move forward with her negligence claim at this juncture.
As to the plaintiff's negligence per se claims, we recommend that the claim based on 62 P.S. § 1409 be dismissed, but that the claim based on the MVFRL be permitted to move forward. At the outset, we are constrained to note that these claims have not been fully developed by the plaintiff, despite this lawsuit being filed more than seven years ago. Instead, the plaintiff merely asserts these claims in her complaint, alleging that Progressive's failure to pay benefits pursuant to the MVFRL, 75 Pa. Cons. Stat. § 1716, and failure to reimburse DPW pursuant to 62 P.S. § 1409 constitute negligence per se. In her opposition to the instant summary judgment motion, the plaintiff merely states that she “is among the group of individuals section 1716 is intended to protect.” (Doc. 50, at 16).
Under Pennsylvania law, to establish a claim of negligence per se, a plaintiff must show that:
1) the statute or regulation clearly applies to the conduct of the defendant; 2) the defendant violated the statute or regulation; 3) the violation of the statute proximately caused the plaintiff's injuries; and 4) the statute's purpose is, at least in part, to protect the interest of the plaintiff individually, as opposed to the public.Mest v. Cabot Corp, 449 F.3d 502, 518 (3d Cir. 2006) (citing Wagner v. Anzon, Inc., 684 A.2d 570, 574 (Pa. Super. Ct. 1996)).
In the instant case, we conclude that the plaintiff has not demonstrated that she is entitled to relief under a negligence per se theory with respect to 62 P.S. § 1409. Rather, the policy of § 1409 “shows a clear legislative intent to provide DPW with a broad means of recovering funds expended on [an individual] as a result of a third-party tortfeasor's actions.” Shaffer-Doan ex rel. Doan v. Commw. Dep't of Public Welfare, 960 A.2d 500, 515 (Pa. Commw. Ct. 2008). Thus, it would appear that this legislation exists not to protect the interest of the individual, but of DPW to recover funds it expends on behalf of others. Accordingly, this statute would afford the plaintiff no relief under a negligence per se theory.
However, with respect to the MVFRL, while we regard this as a close case, we cannot conclude that this claim fails as a matter of law. First, this provision is clearly intended to protect individuals like the plaintiff whose benefits are delayed on the part of the insurer. At this stage, where there are factual disputes precluding summary judgment on the bad faith claim, we cannot conclude that Progressive did not violate the statute at issue by delaying payment of benefits to the plaintiff. Moreover, the plaintiff has alleged that she suffered anxiety and stress due to the inability to pay her bills during the delay, as she was not reimbursed for her lost wages for over a year. Accordingly, a factfinder could find that Progressive violated the statute, and that the violation was the proximate cause of the plaintiff's injuries. Thus, we recommend that the negligence per se claim based on the MVFRL be permitted to proceed forward. However, as we have explained, we conclude that the negligence per se claim based on 62 P.S. § 1409 fails as a matter of law and should be dismissed.
IV. Recommendation
Accordingly, for the foregoing reasons, IT IS RECOMMENDED THAT Progressive's motion for summary judgment (Doc. 44) be GRANTED IN PART AND DENIED IN PART as follows:
The motion should be GRANTED as to the breach of contract claim and the negligence per se claim based on a violation of 62 P.S. § 1409. The motion should be DENIED in all other respects.
The parties are further placed on notice that pursuant to Local Rule 72.3:
Any party may object to a magistrate judge's proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636 (b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.