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May 17, 2013
VALERIE DOUGLAS, PLAINTIFF,v.SUSAN A. LOFTON, IN HER INDIVIDUAL CAPACITY AND IN HER OFFICIAL CAPACITY AS PRINCIPAL OF NICOLAS SENN HIGH SCHOOL, AND CHICAGO PUBLIC SCHOOLS, DEFENDANTS.
On February 23, 2013, Plaintiff Valerie Douglas ("Douglas") filed a six-count Amended Complaint against Defendants Susan Lofton ("Lofton"), in her individual capacity and official capacity as Principal of Nicolas Senn High School, and Chicago Public Schools ("the Board")*fn1 (collectively, "Defendants"). (R. 21, Amend. Compl.) In Counts I and II, Ms. Douglas alleges that Defendants interfered with her rights and engaged in retaliation under the Family Medical Leave Act ("FMLA"), 29 U.S.C. §§ 2601 et seq. In Counts III and V, she claims that Defendants defamed her and intentionally inflicted emotional distress upon her. In Count IV, she alleges that Lofton assaulted her. In Count VI, she alleges that Defendants subjected her to differential treatment from others similarly situated to her in violation of the Fourteenth Amendment. On February 28, 2013, Defendants moved pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6) to dismiss Counts I, III, IV and V of Ms. Douglas' Amended Complaint, and pursuant to Rule 12(f) to strike paragraphs 16-23, 33-37, 41-59 and Exhibits A, B, C, E, M, and N as redundant, immaterial, impertinent, or scandalous matter. (R. 25, Mot.) Defendants do not contest Ms. Douglas' claims in Count II (FMLA retaliation) or Count VI (Fourteenth Amendment). For the following reasons, the Court grants Defendants' motion in part and denies it in part.
Valerie Douglas has been a teacher with Chicago Public Schools for over 25 years. (Amend. Compl. ¶ 1.) Ms. Douglas previously taught at Nicolas Senn High School. Ms. Susan Lofton became principal of Nicolas Senn High School in the second semester of the 2009-2010 school year. (Id. ¶ 7.) According to Ms. Douglas, she was eligible for FMLA protections because of a serious health condition. (Id. ¶¶ 61, 72.) Specifically, she has been diagnosed with post traumatic stress disorder and severe depression. (Id. ¶ 72.) Additionally, on April 27, 2011, while at a meeting, Ms. Lofton "suddenly and aggressively moved across the table towards" Ms. Douglas. (Id. ¶ 95.) As a result, Ms. Douglas "developed a severe headache." (Id. ¶ 98.) She informed office staff that she needed to leave early and completed the required documents. (Id. ¶ 99.) A doctor diagnosed her as having had a heart attack. (Id. ¶ 100.)
Because of her health condition, Ms. Douglas took leave from January 25, 2011 through March 2011, from April 27, 2011 through May 9, 2011, and from September 14, 2011 through September 23, 2011. (Id. ¶¶ 63, 64, 68.) Ms. Lofton requested that the September days "be changed to suspension days" after requesting on July 29, 2011 that Ms. Douglas be suspended for certain days. (Id. ¶¶ 66, 67.) Ms. Douglas also took leave from late September through November 7, 2011 and was under a doctor's care. (Id. ¶ 68.)
On May 9, 2011, the day Ms. Douglas returned from one of her leaves of absence, Ms. Lofton provided her "with a list of charges which could result in disciplinary action 'up to and including' dismissal." (Id. ¶ 78.) The charges included a complaint from an anonymous student that Ms. Douglas had failed to input attendance grades for students in a class and that Ms. Douglas had left the building without permission on April 27, 2011. (Id.) Ms. Lofton disciplined Ms. Douglas for her failure to input grades during her FMLA leave and for leaving the building. (Id. ¶ 87, Ex. W.) Specifically, Ms. Lofton suspended Ms. Douglas. (Id.) According to Ms. Douglas, Ms. Lofton also "taunted [her] in hushed whispers" and subjected her "to a campaign of harassment." (Id. ¶¶ 101, 108.)
I. 12(b)(6) Motion to Dismiss Standard
A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). Under Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (citation omitted). Under the federal notice pleading standards, a plaintiff's "factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. Put differently, a "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570). "In evaluating the sufficiency of the complaint, [courts] view it in the light most favorable to the plaintiff, taking as true all well-pleaded factual allegations and making all possible inferences from the allegations in the plaintiff's favor." AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011).
II. 12(f) Motion to Strike Standard
"Rule 12(f) provides that a district court 'may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.'" Delta Consulting Grp., Inc. v. R. Randle Const., Inc., 554 F.3d 1133, 1141 (7th Cir. 2009) (quoting Fed. R. Civ. P. 12(f)). Motions to strike are appropriate if they serve to expedite litigation. See Heller Fin., Inc. v. Midwhey Powder, 883 F.2d 1286, 1294 (7th Cir. 1989); see also Talbot v. Robert Matthews Distrib. Co., 961 F.2d 654, 664 (7th Cir. 1992) (allegations may be stricken if matter bears no possible relation to controversy). District courts have considerable discretion to strike allegations under Rule 12(f). See Delta, 554 F.3d at 1141-42.
Defendants seek to dismiss Counts I, III, IV, and V. They also seek to strike Paragraphs 16-23, 33-37, and 41-59, and Exhibits A, B, C, E, M, and N. The Court addresses each argument in turn.
I. Count I - Interference In Violation Of the FLMA
The "FMLA entitles an employee to twelve weeks of leave every twelve-month period if she is afflicted with 'a serious health condition' which renders her unable to perform her job." Smith v. Hope Sch., 560 F.3d 694, 699 (7th Cir. 2009) (quoting 29 U.S.C. § 2612(a)(1)(D)). The FMLA "further provides that employers may not 'interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under [the Act].'" Righi v. SMC Corp., 632 F.3d 404, 408 (7th Cir. 2011) (citation omitted). To prevail on her FMLA interference claim, Ms. Douglas must show that: (1) she was eligible for FMLA protections; (2) her employer was covered by the FMLA; (3) she was entitled to take leave under the FMLA; (4) she provided sufficient notice of her intent to take leave; and (5) her employer denied her FMLA benefits to which she was entitled. See James v. Hyatt Regency Chi., 707 F.3d 775, 780 (7th Cir. 2013). Defendants argue that Plaintiff has not pled sufficient factual allegations to support her claim for FLMA interference. Specifically, they argue that she has "failed to allege that the Board denied her requests for FMLA leave . . . [and] has pled not facts in support of her claim that the Board interfered with her FMLA rights." (Mot. at 4.) Indeed, Ms. Douglas has failed to specifically identify any manner in which Defendants denied her any FMLA benefits.
"An interference claim requires proof that the employer denied the employee FMLA rights to which she was entitled." Nicholson v. Pulte Homes Corp., 690 F.3d 819, 825 (7th Cir. 2012). Ms. Douglas does not allege that Defendants denied her any requested FMLA time off. See, e.g., id. at 827 (finding insufficient evidence that the defendant "did anything to deny or otherwise interfere with [plaintiff's] right to FMLA benefits" in part because "at no time did defendant decline plaintiff's request for leave"). In fact, her allegations are the opposite, as she states that she took FMLA time off on multiple occasions. Ms. Douglas alleges that she "took FMLA leave from January 25, 2011 through March 2011, approximately thirty (30) days." (Amend. Compl. ¶ 63.) She also "took FMLA leave from April 27, 2011 through May 9, 2011," "[f]rom September 14, 2011 through September 23, 2011," and "from late September through November 7, 2011." (Amend. Compl. ¶¶ 64, 67, 68.) Her Amended Complaint does not allege that Defendants denied any request she made for FMLA time off. In her response, Ms. Douglas clarifies that she seeks an FMLA claim based on something beyond denial of time off. (Resp. at 11-13.)
Specifically, Ms. Douglas argues that "one can make a reasonable inference that the actions were taken to discourage the use of FMLA rights" based on the statements made by a consulting teacher*fn2 that she "may be entitled to take FMLA leave but she is not entitled to the respect of her colleagues who have to pick up her slack." (Resp. at 12; Amend. Compl. ¶ 88.) Even viewing the facts in the light most favorable to Plaintiff, there is no reasonable inference, based on a colleague's view that Ms. Douglas did not deserve respect, that Defendants took any actions to deny Ms. Douglas her benefits. Indeed, Ms. Douglas provides no legal support for the contention that lack of respect, by someone other than Defendants no less, is actionable under the FMLA.
In her response, she also makes other vague arguments that Defendants interfered with her rights by (1) retroactively changing policies "in an attempt to discipline Douglas for time when she was on FMLA leave" and (2) disciplining her "allegedly due to the fact that [she] had not completed electronic data entries for the period" of time when she was on FMLA leave. (Resp. at 12-13.) She does not cite to any law or to any specific allegations as part of these arguments. Rather, she states that she has offered documentary evidence to support these theories. As explained below, both arguments fail.
First, regarding Ms. Douglas' claim that Defendants attempted to discipline her by changing a policy, she fails to sufficiently allege what the policy stated, what changes were made, or how that policy applied to her. Notably, in her response, she refers to "exhibits"*fn3 which she claims show that Ms. Lofton "retroactively changed policies in an attempt to discipline Douglas." (Resp. at 12.) She fails, however, to cite to any specific exhibits. Moreover, the exhibits which she references in Count I of her Amended Complaint, Exhibits E, G, and U, do not assert any such facts. (Amend. Compl. ¶¶ 65, 74. 75.) Exhibit U, for example, is a letter detailing the dates of, and reasons for, her nine-day suspension. (R. 21-2, Ex. U.) Exhibit E appears to be teacher evaluations for other teachers whose names have been redacted. (R. 21, Ex. E.) Exhibit G is an email from Ms. Douglas to an unknown recipient explaining that she is leaving school early. (R. 21-1, Ex. G.) Exhibit F, which Ms. Douglas does not even cite in Count I, is perhaps the most relevant exhibit as it is the Teacher Evaluation Plan and Handbook of Procedures. The Court on its own, however, cannot determine to which particular changes within this Handbook Ms. Douglas might be referring. Indeed, none of these exhibits support any allegation that Defendants made a specific change in any policy or, more significantly, that they disciplined Ms. Douglas in a manner to interfere with her rights under the FMLA.
Moreover, Ms. Douglas' own allegations do not support any such conclusion as she merely argues that Ms. Lofton "attempted" to discipline her and does not allege that Ms. Lofton actually disciplined her or interfered with her rights. (Resp. at 13.) Additionally, Ms. Douglas alleges that the change in policy occurred "after [she] was disciplined" and therefore could not have been the cause of her discipline. (Amend. Compl. ¶ 81.) Notably, Ms. Douglas also has alleged that she "has never been the subject of any serious disciplinary proceedings or disciplinary actions" during her over twenty-five years teaching for the Chicago Public Schools. (Id. ¶ 1.) Any discipline she received, therefore, was not "serious" by her own accord.
Second, the only specific disciplinary action Ms. Douglas references is her suspension. Indeed, this is the only potential basis for an interference claim which she specifically included in Count I of the Amended Complaint. (Id. ¶¶ 65-67.) This suspension, however, does not support a claim for interference. According to the letter she attached as Exhibit U, dated July 29, 2011, Chicago Public Schools suspended her for two days in September, October, November, and December each. (R. 21-2, Ex. U.) Plaintiff, therefore, received this suspension approximately four months after her first leave of absence, which ended in March 2011, and two and a half months after the second FMLA leave, which ended May 9, 2011.*fn4 (Amend. Compl. ¶¶ 63, 64.) Moreover, she took FMLA leave after receiving this notice of suspension, specifically from "September 14, 2011 through September 23, 2011" and "from late September through November 7, 2011." (Amend. Compl. ¶¶ 67, 68.) She has, therefore, not sufficiently alleged that Defendants took actions which interfered with her rights or discouraged her from exercising her rights, even when making all reasonable inferences in her favor. See, e.g., Nicholson, 690 F.3d at 827 (finding that the plaintiff had not asserted a claim for interference based on termination when defendant terminated plaintiff two months after granting her leave to request and before she made additional requests). Indeed, at most Ms. Douglas has argued that it is possible for a plaintiff to recover under the FMLA for a denial of benefits other than mere denial of time off. She has not, however, sufficiently stated such a claim herself in her Amended Complaint under Rule 8(a) of the Federal Rules of Civil Procedure.
Additionally, even a liberal reading of Ms. Douglas' Amended Complaint does not save her claim. See Gomez v. Randle, 680 F.3d 859, 864 (7th Cir. 2012) (courts must construe pro se pleadings liberally). Ms. Douglas, for example, alleges that Defendants discharged her from her teaching position at Nicolas Senn High School, yet does not connect this discharge with her interference claim. Moreover, although "termination may constitute a denial of benefits," Ms. Douglas does not specifically allege why Defendants discharged her or when this "constructive discharge" occurred. Nicholson, 690 F.3d at 827; (Amend. Compl. ¶ 38.) Rather, she contends that Defendants discharged her along with at least eight other teachers whom Defendants placed in the "E3 process" to complete a remediation plan. (Amend. Compl. ¶¶ 38-40.) She also alleges -- again not within her interference claim in the Amended Complaint -- that Ms. Lofton harassed her. (Id. ¶¶ 101-102.) "[H]arassment alone does not establish an interference claim, however, because to establish an interference claim Simpson must show that defendants denied her a right under the FMLA." See Simpson v. Off. of Chief Judge of Circuit Ct. of Will Cnty., Ill., 520 F. Supp. 2d 998, 1009 n. 10 (N.D. Ill. 2007). As discussed above, however, Ms. Douglas has not alleged any right which Defendants denied her. The Court, therefore, dismisses Count I, without prejudice.
II. Count III - Defamation of Character
Defendants argue that the Court should dismiss Count III for two reasons: (1) the Tort Immunity Act immunizes Defendants from defamation claims, and (2) the statements at issue are privileged. (Mot. at 5-7.)Defendants do not contest the factual sufficiency of Ms. Douglas' defamation claim. (Reply at 8.) For the following reasons, the Court dismisses Count III with prejudice.
A. Tort Immunity Act
Defendants claim that the Local Governmental and Governmental Employees Tort Immunity Act, 745 ILCS 10/1-101 et seq. ("Tort Immunity Act"), immunizes them against Ms. Douglas' defamation claim. (Mot. at 5.) Specifically, Section 2-107 of the Tort Immunity Act immunizes a "local public entity," which includes the Board, for injury caused by any action of its employees that is libelous or slanderous or for any provision of information either orally, in writing, by computer or any other electronic transmission, or in a book or other form of library material." 745 ILCS 10/2-107. Defendants also claim that Section 2-210 immunizesMs. Lofton from the defamation claim. (Mot. at 5.) Section 2-210 states:
A public employee acting in the scope of his employment is not liable for an injury caused by the negligent misrepresentation or the provision of information either orally, in writing, by computer or any other electronic transmission, or in a book or other form of library material. 745 ILCS 10/2-210. Ms. Douglas does not contest that the Tort Immunity Act applies to Defendants, but instead argues that the Tort Immunity Act (1) does not immunize Defendants against injunctive relief, and (2) does not immunize willful and wanton conduct. (Resp. at 3.)
1. Injunctive Relief
Regarding injunctive relief, Ms. Douglas has not sought and cannot seek injunctive relief for defamation, contrary to her assertion in her response. In her Amended Complaint, she specifically seeks injunctive relief regarding her FMLA claims. (Amend. Compl. at 17.) She also generally seeks to enjoin Defendants from further unlawful conduct, though does not specify to what conduct she refers. (Id.) Ms. Douglas' defamation claim, however, stems from alleged defamatory statements which Ms. Lofton made while Ms. Douglas taught at Nicolas Senn High School. (Id. ¶¶ 90-92.) Specifically, Ms. Douglas alleges that Ms. Lofton made statements in a Notice of Pre-Disciplinary Hearing and in observations conducted during the 2011-2012 school year. (Id.) Ms. Douglas, however, no longer teaches at Nicolas Senn High School. Ms. Lofton's alleged defamation, therefore, is in the past and there is no threat of it continuing. See, e.g., City of Los Angeles v. Lyons, 461 U.S. 95, 102, 103 S. Ct. 1660, 75 L. Ed. 2d 675 (1983) ("past exposure to illegal conduct does not in itself show a present case for injunctive relief"); see also Scherr v. Marriott Int'l., Inc., 703 F.3d 1069, 1074 (7th Cir. 2013) (stating that "to establish injury in fact when seeking prospective injunctive relief, a plaintiff must allege a 'real and immediate' threat of future violations of their rights").Ms. Douglas cannot seek injunctive relief for this completed alleged conduct. Furthermore, even the injunctive relief Ms. Douglas claims she seeks in her response -- reinstatement -- does not relate to her defamation claim, but instead relate to her FMLA claims.
2. Immunity
Ms. Douglas has, however, sufficiently pled "willful and wanton" conduct, which removes Ms. Lofton from the protection of Section 2-210. The Illinois Supreme Court has stated that Section 2-210 "'unambiguously' does not immunize" willful and wanton conduct because it "stat[es] expressly that the provided immunity applies only to conduct that is negligent." Jane Doe-3 v. McLean Cnty. Unit Dist. No. 5 Bd. of Dirs. 362 Ill. Dec. 484, 973 N.E.2d 880 (Ill. 2012) (quoting Barnett v. Zion Park Dist., 171 Ill. 2d 378, 391, 216 Ill. Dec. 550, 665 N.E.2d 808 (1996)). Section 2-210 of the Tort Immunity Act defines willful and wanton conduct as "a course of action which shows an actual or deliberate intention to cause harm or which, if not intentional, shows an utter indifference to or conscious disregard for the safety of others or their property." 745 ILCS 10/1-210. Here, Ms. Douglas alleges that Ms. Lofton made the defamatory statements with "malicious intent." (Amend. Compl. ¶ 90.) Moreover, Ms. Douglas alleges that Ms. Lofton made the defamatory statements "for the purpose of terminating" her and others. (Id.)
Defendants do not dispute that Ms. Douglas' allegations include willful and wanton conduct, but instead argue that the Illinois Supreme Court's holding in Jane Doe-3 does not reach the case at hand. Specifically, Defendants argue that theSupreme Court's ruling only relates to negligent misrepresentations and not to "provision of information." (R. 35, Reply at 3-5.) In Jane Doe-3, unlike here, the defendants sought immunity under Section 2-204 of the Tort Immunity Act. 362 Ill. Dec. at 497. It was only "[b]y way of a single footnote" that defendants in Jane Doe-3 "ma[d]e passing mention of section 2-210 of the Tort Immunity Act" whereby they stated that the plaintiff did not plead negligent misrepresentation. Id. The court agreed that the plaintiff had not pled negligent misrepresentation but had pled "willful and wanton conduct, which section 2-210 unambiguously does not immunize." Jane Doe-3, 362 Ill. Dec. at 497 (quotations omitted). Based on this language, Defendants contend that the Illinois Supreme Court addressed only "negligent misrepresentation" in Jane Doe-3. (Reply. at 5.) Defendants, therefore, urge the Court to follow a First District of Illinois Appellate Court in recognizing that "negligent" only applies to misrepresentations in Section 2-210 and not to "provision of information." (Id. (citing Golberg v. Brooks, 409 Ill. App. 3d 106, 111, 350 Ill. Dec. 601, 948 N.E.2d 1108 (Ill. App. Ct. 2011)).
Whether Section 2-210 includes an exception for willful and wanton misrepresentations and provisions of information, however, is immaterial because Ms. Douglas has pled both. (Amend. Compl. ¶¶ 90-92.) Indeed, Ms. Lofton's allegedly defamatory statements in her evaluations of Ms. Douglas and in the disciplinary notice may constitute "misrepresentations" of facts or information about Ms. Douglas or "provisions of information" about Ms. Douglas. Defendants do not provide any explanation or justification for why Ms. Douglas' allegations only constitute "provisions of information" and therefore potentially fall under the broader protections of Section 2-210, as applied by the First District court in Goldberg. As a result, Ms. Douglas' Amended Complaint does not establish that the Tort Immunity Act immunizes Defendants from her defamation claim.
B. Privileged Statements
Defendants further contend that Ms. Lofton's statements are privileged and therefore protected from suit. (Mot. at 7.) "Defamatory statements are not actionable if they are protected by an absolute or conditional privilege." Goldberg, 409 Ill. App. 3d at 113 (citing Zych v. Tucker, 363 Ill. App. 3d 831, 834, 300 Ill. Dec. 561, 844 N.E.2d 1004 (2006)). Indeed, even statements that are defamatory per se or made with malice are not actionable if protected by an absolute privilege. See Mauvais-Jarvis v. Wong, No. 1-09-2578, 2013 WL 1281806, at *15 (Ill. App. Ct. Apr. 20, 2011). "The question of whether a privilege is absolute or conditional is a matter of law to be decided by the court." Goldberg, 409 Ill. App. 3d at 113. In Illinois, privileged statements include statements made during legislative, judicial and some quasi-judicial proceedings and other acts of State, including communications made in the discharge of a duty under express authority of law. Wong, 2013 WL 1281806 at *16 (citing Busch v. Bates, 323 Ill. App. 3d 823, 833, 257 Ill. Dec. 558, 753 N.E.2d 1184 (2001)). Additionally, although a plaintiff does not need to anticipate affirmative defenses, a plaintiff may plead herself out of court if she establishes the facts supporting the defense in her complaint. Peterson v. McGladrey & Pullen, LLP, 676 F.3d 594, 600 (7th Cir. 2012); Hollander v. Brown, 457 F.3d 688, 691 n. 1 (7th Cir. 2006) (observing that it is "irregular" to dismiss a complaint on the basis of an affirmative defense such as the statute of limitations, unless "the plaintiff effectively pleads herself out of court by alleging facts that are sufficient to establish the defense").
Here, Ms. Lofton made the allegedly defamatory statements while reviewing and disciplining Ms. Douglas. Under the Illinois School Code, Ms. Lofton, as Principal, is responsible for supervising, evaluating and disciplining teachers. 107 ILCS 5/34-8.1. Ms. Lofton, therefore, allegedly defamed Ms. Douglas while discharging her express duties under Illinois law in the course of her employment as Principal. See, e.g., Goldberg, 409 Ill. App. 3d at 112-13 (extending absolute privilege to statements made by teaching assistant to public school principal about school bus driver and to principal's later statements to driver's employer because they acted within the scope of their public employment); Horwitz v. Bd. of Ed. of Avoca Sch. Dist. Num. 37, 260 F.3d 602, 617-18 (7th Cir. 2001) (finding that absolute privilege shielded a principal, superintendent and school board president from a defamation claim because the individuals made statements when speaking to parents within the scope of their official duties).
Ms. Douglas argues that Ms. Lofton was operating outside of the scope of her authority when she defamed Ms. Douglas. (Resp. at 5, 10.) Specifically, she argues that other statutes and the rules of professional conduct propagated by the Illinois State School Board and Chicago Public Schools' policies and procedures limited Ms. Lofton's authority. (Id. at 10.) She does not, however, cite to any specific statutes or rules to support her argument or explain in what way any statute or policy limited Ms. Lofton's authority. Moreover, she provides no such factual allegations in her Amended Complaint.
Ms. Douglas also argues that Ms. Lofton conducted a May 9, 2011 evaluation outside the scope of her authority, citing to the contract between the Chicago Public Schools and Chicago Teachers' Union Local 1 and Teacher Evaluation Plan and Handbook of Procedures generally. (Resp. at 5.) Not only does she not cite to any specific provision or page number of these documents, she does not even provide the Court with the contract she references. Instead, she drops a footnote stating that the contract "is a matter of public record." (Resp. at 5 n. 5; see also Resp. at 9.) The Court disregards such undeveloped, unsupported arguments in part because "[d]istrict courts are not obliged to scour the record looking for facts to support their arguments." Padilla v. Bailey, No. 09 C 8068, 2011 WL 3045991, at *2 (N.D. Ill. July 25, 2011) (citing Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009)); see also Estate of Moreland v. Dieter, 395 F.3d 747, 759 (7th Cir. 2005) ("We will not scour a record to locate evidence supporting a party's legal argument.").
Moreover, Ms. Douglas' arguments about these documents do not establish that Ms. Lofton acted outside of her authority. Specifically, she argues -- without citation -- that the contract and Handbook required Ms. Lofton to evaluate Ms. Douglas every other year, rather than every year, because she was previously rated excellent, and therefore she "was not subject to evaluation" in May 2011. (Resp. at 5-6.) Ms. Douglas, however, did not include the May 9, 2011 evaluation in her Amended Complaint. Rather, she has alleged that Ms. Lofton made defamatory statements in a "May 25, 2011 observation and observations conducted during the 2011-2012 school year." (Amend. Compl. ¶ 92.) The May 9, 2011 statements which Ms. Lofton cites in her Amended Complaint are contained in a disciplinary letter. As stated above, Ms. Lofton had a legal obligation to supervise, evaluate and discipline Ms. Douglas. Ms. Douglas' defamation claim against Ms. Lofton, therefore, fails as her Amended Complaint establishes that the statements were made in the scope of her employment and were privileged. See, e.g., Hobbs v. Cappaelluti, 899 F. Supp. 2d 738, 776-77 (N.D. Ill. 2012) (dismissing defamation claim because statements were absolutely privileged); Corvus Grp., Inc. v. Nichols Kaster, PLLP, No. 12 C 1269, 2012 WL 1899431, at *1 (N.D. Ill. May 24, 2012) (same). As a result, her claim against the Board fails as well because a "local public entity is not liable for an injury resulting from an act or omission of its employee where the employee is not liable." 745 ILCS 10/2-109. The Court, therefore, dismisses Count III with prejudice.
III. Count IV - Assault
Under Illinois tort law, assault involves intentional conduct that places the plaintiff in reasonable apprehension of an imminent battery. See McNeil v. Carter, 318 Ill. App. 3d 939, 944, 252 Ill. Dec. 413, 742 N.E.2d 1277 (Ill. 2001); Parrish by Bowker v. Donahue, 110 Ill. App. 3d 1081, 1083, 66 Ill. Dec. 860, 443 N.E.2d 786 (Ill. App. Ct. 1982); see also Kijonka v. Seitzinger, 363 F.3d 645, 647 (7th Cir. 2004). Ms. Douglas alleges that, during a meeting at Nicolas Senn High School, "Lofton suddenly and aggressively moved across the table towards Douglas . .. [and] did so intentionally to place Douglas in apprehension of an immediate harmful contact." (Amend. Compl. ¶ 95.) Defendants argue that Ms. Douglas has not sufficiently pled facts to support an assault claim against Ms. Lofton because she did not allege any willful or wanton conduct sufficient to establish an assault claim. (Resp. at 7-8.)
It is unclear, however, whether the Tort Immunity Act applies to the conduct at issue here. Defendants do not cite to any section of the Tort Immunity Act which would immunize them from this assault claim. Defendants cite only to the provisions of the Tort Immunity Act defining "public employee" and "willful and wanton conduct." (Id.) The general immunity provision of the Tort Immunity Act, which public employees often invoke, including for assault claims, states: "A public employee is not liable for his act or omission in the execution or enforcement of any law unless such act or omission constitutes willful and wanton conduct." 745 ILCS 10/2--202. It is not clear from the Amended Complaint that, unlike a police officer who makes physical contact with a person in the course of his law enforcement duties, for example, Ms. Lofton committed the alleged assault "in the execution or enforcement of any law." See cf., Rhyan v. City of Waukegan, No. 10 C 631, 2010 WL 5129736, at *2 (N.D. Ill. Dec. 9, 2010) (denying motion to dismiss assault and battery claim against officer who allegedly forced the plaintiff to the ground and sprayed her with pepper spray when arresting her, noting that the allegations were sufficient to show willful and wanton conduct); see also Zboralski v. Monahan, 616 F. Supp.2d 792, 804 (N.D. Ill. 2008) (recognizing that section 2-202 did not protect all activities a police officer engages in as it "only extends to the act or omission done while in the actual execution or enforcement of a law.") (quotation omitted). Indeed, Ms. Douglas merely alleges that Ms. Lofton assaulted her during a meeting at the school. Additionally, even if Ms. Lofton was supervising or disciplining Ms. Doulgas at this meeting pursuant to Illinois School Code, some courts have concluded that sections of the Illinois School Code are not "law[s] enforced in the sense contemplated by section 2-202." Grandalski ex rel. Grandalski v. Lyons Tp. High Sch. Dist. 204, 305 Ill. App. 3d 1, 7, 238 Ill. Dec. 269, 711 N.E.2d 372 (Ill. App. Ct. 1999) (refusing to apply the protections of the Tort Immunity Act to a teacher supervising students pursuant to section 24-24 of the School Code); A.R. ex rel. M.R. v. Chi. Bd. of Educ., 311 Ill. App.3d 29, 36, 243 Ill. Dec. 697, 724 N.E.2d 6 (Ill. App. Ct. 1999) (refusing to apply section 2-202 to conduct by the school board because the relevant section fo the School Code, which placed an affirmative duty upon the Board to maintain discipline, was "not a law enforced or executed in the sense contemplated by section 2-202 "). The Court, therefore, denies the motion to dismiss as to Count IV because the Amended Complaint does not establish that the Tort Immunity Act precludes this claim.
Ms. Douglas asserts that the Court has supplemental jurisdiction over her Illinois state claims, including this assault claim. (Amend. Compl. ¶ 3.) Although Defendants did not raise the issue, it is unclear whether Ms. Douglas' assault claim stems from the same case or controversy as her federal claims and whether the Court should assert support supplemental jurisdiction over this and her other state law claims. See 28 U.S.C. § 1367; see also Bilek v. Bank of Am., N.A., No. 07 C 4147, 2011 WL 830948, at *7 (N.D. Ill. Mar. 3, 2011) (declining to exercise supplemental jurisdiction over state law claims after dismissing related federal claim). The Court, therefore, directs Ms. Douglas to sufficiently outline the basis for the Court's supplemental jurisdiction over her Illinois state claims, if she files a second amended complaint pursuant to the Court's Order on her May 7, 2013 motion (R. 42). See, e.g., RWJ Mgmt. Co., Inc. v. BP Prods. N. Am., Inc., 672 F.3d 476, 479--80 (7th Cir. 2012) (discussing the presumption in favor of relinquishing supplemental jurisdiction when no federal claims remain); Leister v. Dovetail, Inc., 546 F.3d 875, 882 (7th Cir. 2008) ("When the federal claim in a case drops out before trial, the presumption is that the district judge will relinquish jurisdiction over any supplemental claim to the state courts."). If Ms. Douglas opts not to file a second amended complaint and instead proceeds on the Amended Complaint, the Court directs her to file a supplemental filing outlining the basis for the Court's supplemental jurisdiction on or before July 1, 2013.
Additionally, although Defendants did not raise the issue, the Court questions whether Ms. Douglas' assault claim falls within the one year statute of limitations which applies under the Tort Immunity Act. See 745 ILCS 10/8-101; see also Grzanecki v. Cook Cnty. Sheriffs Police Dept., No. 10 C 7345, 2011 WL 3610087, at *2 (N.D. Ill. Aug. 16, 2011) (finding that the plaintiff's assault and battery claim against state employee was time-barred because it was not filed within a year of the incident). Here, Ms. Douglas alleges the assault occurred on April 27, 2011, which was more than a year before Ms. Douglas filed her initial complaint on October 16, 2012. The Court directs Ms. Douglas to consider the possible statute of limitations applicable to her claims if she files her second amended complaint.
IV. Count V - Intentional Infliction of Emotional Distress
To prevail on a common law intentional infliction of emotional distress claim, a plaintiff must establish that: "(1) the defendants' conduct was extreme and outrageous; (2) the defendants knew that there was a high probability that their conduct would cause severe emotional distress; and (3) the conduct in fact caused severe emotional distress." Swearnigen--El v. Cook Cnty. Sheriff's Dep't, 602 F.3d 852, 864 (7th Cir. 2010) (citation omitted). Defendants argue that Ms. Douglas has not sufficiently pled conduct that was truly "extreme and outrageous" or any willful and wanton behavior. (Mot. at 8-9.)
"To meet the 'extreme and outrageous' standard, the defendants' conduct 'must be so extreme as to go beyond all possible bounds of decency, and to be regarded as intolerable in a civilized community.'" Id. (citation omitted). Mere insults, indignities, threats, or annoyances do not qualify as extreme and outrageous conduct. See Kolegas v. Heftel Broad. Corp., 154 Ill. 2d 1, 20-21, 180 Ill. Dec. 307, 607 N.E.2d 201 (Ill. 1992); see also Duffy v. Haberkorn, No. 1-11-0841, 2012 WL 6861596, at *4 (Ill. App. Ct. Dec. 20, 2012). Rather, "extreme and outrageous behavior requires conduct that goes beyond all possible bounds of decency, such that a reasonable person would hear the facts and be compelled to feelings of resentment and outrage." Duffy v. Orlan Brook Condo. Owners' Ass'n, 367 Ill. Dec. 341, 351, 981 N.E.2d 1069 (Ill. App. Ct. 2012). Also, a plaintiff must establish that the behavior was "so severe that no reasonable man could be expected to endure it." Feltmeier v. Feltmeier, 207 Ill. 2d 263, 276, 278 Ill. Dec. 263, 798 N.E.2d 75 (Ill. 2003).
Here, Ms. Douglas alleges that she had a heart attack caused by Ms. Lofton's alleged assault. (Amend. Compl. ¶ 100.) Ms. Douglas also claims that Ms. Lofton subjected her to a campaign of harassment and engaged in a pattern of intimidation and hostile action at least three times. (Id. ¶¶ 101-102.) Ms. Douglas does not specify how Ms. Lofton harassed her or what type of "hostile action" Ms. Lofton took against her. Such bare bones allegations are not sufficient to put Defendants on notice as to the conduct at issue. Ms. Douglas has offered only conclusory statements, rather than factual allegations, indicating that Ms. Lofton's conduct was so extreme and outrageous to warrant liability. Indeed, "[t]he case law is replete with claims for intentional infliction of emotional distress that were dismissed by the court at the pleadings stage for failure to allege sufficiently extreme and outrageous conduct." Miner v. Garrity, No. 1-10-3023, 2011 WL 10071975, at *13 (Ill. App. Ct. Jul. 29, 2011) (citing Public Fin. Corp. v. Davis, 66 Ill. 2d 85, 94 (1976) (debtor claimed that agents of creditor called her and visited her several times weekly over a seven-month period, called defendant multiple times at her daughter's hospital bed, and, on one home visit, called the creditor to describe defendant's household goods and refused to leave her home until her son entered); Rudis v. National Coll. Educ., 191 Ill. App. 3d 1009, 1014 (Ill. App. Ct. 1989) (student brought suit against her former college and its administrators for intentional infliction of emotional distress, claiming that administrators and faculty leveled various rude and insulting accusations of academic and other misconduct against her); Tabora v. Gottlieb Memorial Hosp., 279 Ill. App. 3d 108, 120 (Ill. App. Ct. 1996) (plaintiff doctor alleged that defendants engaged in a "five year campaign of harassment and intimidation against him" by falsely claiming that he was incompetent, revoking his privileges, and constantly berating him in front of hospital staff); Khan v. Am. Airlines, 266 Ill. App. 3d 726 (Ill. App. Ct. 1994) (defendants knowingly sold stolen airline ticket to plaintiff, causing him to be arrested and charged with theft, despite being aware that he was en route to his father's funeral), abrogation on other grounds recognized by Velez v. Avis Rent A Car System, Inc., 308 Ill. App. 3d 923, 928 (Ill. App. Ct. 1999); Layne v. Builders Plumbing Supply Co., Inc., 210 Ill. App. 3d 966, 973 (Ill. App. Ct. 1991) (defendant employer knowingly filed false police report against plaintiff employee, claiming that she threatened, harassed, and assaulted a co-worker)). Moreover, even in her response, Ms. Douglas fails to describe specific conduct warranting liability, but instead merely cites to 92 paragraphs of her Amended Complaint. (See Resp. at 7 (citing Amend. Comp. ¶¶ 7-99).) At most, she argues that Ms. Lofton abused her position, created defamatory documents, made defamatory statements, and changed workplace rules as a basis for discipline. (Id. at 8.) Ms. Douglas provides no legal basis for why such conduct rises to the level of intentional infliction of emotional distress. The Court, therefore, dismisses Count V without prejudice.
IV. Joining of Future Claims
Ms. Douglas also argues that the Court should deny the motion to dismiss to the extent it seeks dismissal of claims that she plans to join to this lawsuit after she exhausts her administrative remedies. (Resp. at 10.) The Court, however, can only evaluate the claims before it. This argument, therefore, does not save her deficient claims from dismissal at this stage.Ms. Douglas may file a second amended complaint which includes any additional claims which the facts support.
V. Motion to Strike
Defendants seek to strike Paragraphs 16-23, 33-37, and 41-59 (and corresponding exhibits) of Ms. Douglas' Amended Complaint because they contain allegations unrelated to her claims. (Mot. at 11.) The Court grants this request.
Paragraphs 16-23 and corresponding Exhibits A, B, and C include allegations about Nicolas Senn High School's student enrollment and budgets for 2011 through 2013, estimates of the number of teachers at Nicolas Senn High School for 2012 and 2013, and allegations relating to why the school laid off other teachers during the 2011 and 2012 fiscal years and hired additional teachers in 2013. These allegations are irrelevant and immaterial to Ms. Douglas' remaining claims -- FMLA retaliation, assault, and disparate treatment under the Fourteenth Amendment. Ms. Lofton argues that these paragraphs "serve as evidential links in the chain of inference that similarly situated employees outside the protected class received systematically better treatment." (Resp. at 13-14.) This argument, however, is misguided as these statistics regarding enrollment and the hiring and firing of teachers do not establish any such link. Indeed, Ms. Lofton does not provide any factual allegations about whether the teachers referenced were similarly situated to her or if they took any FMLA leave or if Ms. Lofton assaulted them. The Court, therefore, strikes Paragraphs 16-23 and Exhibits A, B, and C.
The allegations in Paragraphs 34-37 and 41-45 and Exhibit E*fn5
relate to other teachers against whom Defendants allegedly
discriminated. Paragraphs 34-37 describe how Ms. Lofton treated a
teacher named Maurice Aberman, who suffered from hearing loss and who
Ms. Lofton terminated in June 2011. (Amend. Compl. ¶¶ 34-37.) Paragraphs 41-45
describe Ms. Lofton's treatment of another teacher, Peter Nicolas,
whom Defendants allegedly laid off for economic reasons. (Amend.
Compl. ¶¶ 41-45.) Paragraphs 46-59 and Exhibits M and N describe how
Ms. Lofton allegedly discriminated against another teacher, Deidre
Robertson, regarding the reporting and investigating of alleged child
abuse. (Amend. Compl. ¶¶ 46-59.) All of these allegations and exhibits
pertain to actions taken against other teachers that are wholly
unrelated to the allegations Ms. Douglas makes, other than that they
all include alleged discrimination -- though of very different kinds
-- by Ms. Lofton.
Ms. Lofton argues that these allegations regarding other teachers are relevant because of "the similarity of the abuse of position each suffered." (Resp. at 15.) These paragraphs, however, do not include any factual allegations indicating that they received similar "abuse" or were similarly situated. At most, Ms. Lofton has alleged that Mr. Aberman also suffered from medical problems, namely hearing loss. She does not, however, allege that Mr. Aberman, Mr. Nichols, or Ms. Roberston, sought FMLA time off. Indeed, she does not even allege that these teachers qualified for FMLA protection. Nor does she allege that Defendants discriminated against these teachers in any manner similar to Ms. Douglas' allegations of discrimination -- discipline, suspension, defamation, harassment, or assault. Ms. Douglas' argument that these allegations help establish willful and wanton conduct also fail as they do not, as she argues, show a relevant pattern of "fabricating evidence, asking others to corroborate factually deficient video, and persecuting individuals based on the purported corroboration." (Resp. at 15.) The Court, therefore, also strikes Paragraphs 34-37 and 41-49, and Exhibits E, M, and N without prejudice.
For the forgoing reasons, the Court dismisses Counts I and V without prejudice and Count III with prejudice. The Court also strikes without prejudice Paragraphs 16-23, 34-37, and 41-49 and Exhibits A, B, C, E, M and N of Ms. Douglas' Amended Complaint. Pursuant to the Court's concurrently issued Order, Ms. Douglas may file a second amended complaint, consistent with this opinion, on or before July 1, 2013.
AMY J. ST. EVE United States District Court Judge
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April 7, 2009
CHER-D, INC., T/A PINE KNOB INNv.GREAT AMERICAN ALLIANCE INSURANCE COMPANY
Presently before the Court is Defendant's Motion for Summary Judgment (Doc. No. 12). For the following reasons, the Motion will be granted in part and denied in part.
This is an insurance coverage dispute that arose between an insured, Pine Knob Inn, and its insurer, Great American Alliance Insurance Company, following two fires. Pine Knob Inn ("Plaintiff") was a 28-room country inn located on nearly seven acres of land in Canadensis, a town in the Poconos region of northeastern Pennsylvania. (Doc. No. 12 ¶ 1; Doc. No. 17 ¶ 1.) Plaintiff served guests with food and lodging in the Poconos for over 100 years. (Compl. ¶¶ 1-2; Def.'s Ans. ¶¶ 1-2.) Plaintiff's property included two cottages, a bungalow, a conference center, a pool house, and a main building that contained 19 rooms. (J. Garman Dep. at 22.) On January 22, 2004, Plaintiff purchased an Innkeeper's Insurance Policy ("the Policy") from Great American Alliance Insurance Company ("Defendant"), which provided coverage for Plaintiff's main building. (See Doc. No. 14, Ex. A.) The Policy had a policy period of March 12, 2004 to March 12, 2005. (See id.; see also Doc. No. 12 ¶ 9; Doc. No. 17 ¶ 9.) The Policy contained two provisions that are relevant to this dispute. The first provision, entitled "Commercial Property Conditions," provided the following:
Under this Coverage Part:
1. We cover loss or damage commencing:
a. During the policy period shown in the Declarations....
(Doc. No. 14 at 6 (emphasis added)). The second provision, entitled "Innkeepers Property Coverage Form," provided the following:
We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss. (Id. at 8 (emphasis added)). A "Covered Cause of Loss" is defined as a "risk of direct physical loss." (Id. at 10.)
On October 1, 2004, while the Policy was in place, there was an electrical fire in Plaintiff's main building due to faulty wiring. (Doc. No. 12 ¶ 5; Doc. No. 17 ¶ 5.) The fire was extinguished on the same day. (Id.) Plaintiff ceased operations because of the fire and intended to repair the damage. (Doc. No. 12 ¶ 6; Doc. No. 17 ¶ 6; C. Garman Dep. at 24-25.) Plaintiff submitted a claim under the Policy immediately after the fire. (Doc. No. 12 ¶ 8; Doc. No. 17 ¶ 8; Doc. No. 17 at 4.) Defendant agreed that the Policy covered Plaintiff's claim. (Doc. No. 17 at 4.) Plaintiff hired a public adjuster, Clark Jones ("Jones"), to serve as its representative in connection with the claim. (C. Garman Dep. at 8.) Within two weeks of the fire, Defendant sent its contractor, Belfor Construction Company ("Belfor"), to "shore up the lobby floor" so that Defendant's investigators could enter the main building. (Id. at 14.) During that visit, Belfor told Plaintiff that it "would not be a problem to rebuild this building." (Id. at 13.)
The next month, in November 2004, Plaintiff told Defendant's representative Don Jordan ("Jordan") that Plaintiff "intended to rebuild and recommence the business." (Id. at 25; J. Garman Dep. at 56.) Jordan told Plaintiff that it would "be no problem to rebuild the property" and that it would "be very doable." (J. Garman Dep. at 56.) Plaintiff understood that Defendant was handling the rebuilding process and so Plaintiff did not take steps to initiate the rebuilding. (Id.) Plaintiff "got the impression" that Defendant was handling the rebuilding based on Defendant's statements:
Q: Is that why you didn't do anything, because you thought it was being handled by Belfor?
A: I thought that it was being handled, yes.
Q: And you got that impression from where?
A: Well, from Don Jordan. And the Belfor people were there. But I don't know how much -- I mean, from day one, they said, We can do this. We can take care of this problem. You know, we will solve this problem for you. (Id. at 64.) Plaintiff did not ask Defendant "when they were going to start" with the rebuilding, because Plaintiff had never been involved in this type of an insurance claim and "just figured it was the protocol of the insurance company":
Being the novices that we were, and thank God, we had never been involved in anything like this before, I just figured it was the protocol of the insurance company. I didn't think as owners we had the ability to ask or demand anything other than what was being done.
(C. Garman Dep. at 16.) Plaintiff was also "under the assumption that [it] couldn't do anything on [its] own," since Plaintiff "was under the assumption that it was [Defendant and] Belfor doing the construction." (Id. at 28.) Even if Plaintiff wanted to begin rebuilding on its own, Plaintiff could not have done so since Defendant had given them "no money." (J. Garman Dep. at 58.)
On December 7, 2004, Plaintiff provided Defendant with an inventory of the building contents. (See Doc. No. 17, Ex. G.) A month later, on January 3, 2005, Plaintiff presented Defendant with a formal estimate to repair the building in the amount of $1,258,745.11. (Doc. No. 17, Ex. F.) Starting sometime that month, with the rebuilding process not yet begun, trespassers entered Plaintiff's building and began to engage in acts of vandalism. (C. Garman Dep. at 28-29.) The vandals were "breaking in daily" and, since there was no electricity, "[t]hey were lighting candles" and "sleeping on old mattresses." (Id.; see also Doc. No. 17 at 6.) Plaintiff took steps to prevent the vandals from entering the building. The windows and entrances were "boarded up with plywood" and "with two by fours." (J. Garman Dep. at 74.) Plaintiff "tried to close [the main building] up as much as possible" by securing the access points. (Id.) However, the building was "very large" and had "a lot of access points." (Id.) The vandals "kept moving" and when one entry point was secured, "they'd just go to another part." (Id.) Plaintiff notified the police about the incidents of vandalism, and the police began to patrol the area "on a regular basis." (Id. at 74, 80.) Plaintiff, meanwhile, continued to secure the access points. Plaintiff believed that Jones had told Defendant about the vandalism at some point prior to May 2005 so that Defendant was made "aware of the situation." (C. Garman Dep. at 29.) There is no evidence in the record of vandalism occurring at any time before the first fire except for "an incident where somebody got into the basement and stole some drinks or liquor." (Scalice Dep. at 70.)
In late January 2005, Defendant notified Plaintiff that it would not renew Plaintiff's insurance policy. (Doc. No. 17 at 6.) Plaintiff therefore attempted to purchase insurance from a broker, James Wolf Insurance. (J. Garman Dep. at 84.) The broker was unable to obtain a policy to insure the main building. (Id.) In late January or early February 2005, Plaintiff attempted to purchase insurance through another broker, Richard Scalice. (Scalice Dep. at 26.)
Scalice told Plaintiff that it was going to be "difficult if not impossible" to get insurance on the main building "because it's a burnt out structure." (Id. at 28-29.) Scalice attempted to secure an insurance policy, but to no avail:
You know, whether you want to raise your hand with lots of cash on the street corner and wave it doesn't matter if nobody wants to take your money. It doesn't matter how much money you have in your fist; if nobody wants it, nobody wants it. But I did try, nonetheless, to get insurance on the main building. (Id. at 28.) Scalice spoke with several potential insurers but ultimately could not obtain a policy for Plaintiff. (Id. at 32.) On March 12, 2005, Plaintiff's insurance policy with Defendant expired leaving Plaintiff with no insurance on the property. (See Doc. No. 14, Ex. A.)
In Spring 2005, Jones complained to Defendant that it was taking too long for Defendant to settle Plaintiff's claim. (Jones Dep. at 45-46; J. Garman Dep. at 46.) Jones did not have "an actual cash value figure" from Defendant, but Jones "knew what [Defendant's] estimate was." (Jones Dep. at 48.) Jones asked Defendant, "why don't you just pay it," or "words to that effect." (Id. at 46.) Jones does not recall what Defendant said in response. (Id.) At some point in May 2005, Jones told Jordan about the ongoing vandalism. (C. Garman Dep. at 29.) Plaintiff believed that Jones had already made Defendant aware of the vandalism at some prior time. (Id.)
On May 5, 2005, Defendant visited the main building to inspect the contents. (See Doc. No. 17, Ex. H.) After the inspection, Jones again demanded the insurance proceeds from Defendant. Jones testified that he told Defendant, "if you can't give me a number, just give me what you think you owe us and we'll go to appraisal.... Whatever I have to do, we'll do it because we need to get this thing done." (Jones Dep. at 54.) Jones asked Defendant to "pay the amount of the building loss that Plaintiff had calculated," but Defendant "slow[ed] everything up." (Id. at 55.) Jones then called a former colleague who used to work for Defendant to find out how to "go over [Jordan's superior's] head... to get this thing done." (Id. at 56.)
On May 23, 2005, the main building sustained a second fire. (Doc. No. 12 ¶ 11; Doc. No. 17 ¶ 11.) The second fire caused damage to the main building in addition to the damage that was caused by the first fire. (Id.) The building was "completely destroyed" after the second fire. (Doc. No. 17, Ex. B.) Whereas the first fire was caused by faulty wiring, Plaintiff concluded that the second fire was caused by vandalism since there was no electricity in the building.*fn1
(C. Garman Dep. at 28.) On June 17, 2005, Plaintiff made a claim under the Policy for the damage caused by the second fire. (Doc. No. 12 ¶ 14; Doc. No. 17 ¶ 14.) Plaintiff contended that the second fire was resulting damage from the first fire in October 2004, and therefore was a loss covered under the Policy, which had expired. (Doc. No. 12 ¶ 15; Doc. No. 17 ¶ 15.) Plaintiff estimated that it was entitled to an additional $2,741,255.00 from Defendant. (Doc. No. 14, Ex. B.)
On July 18, 2005, Defendant provided Plaintiff with its estimate of the damages from the first fire that had occurred in October 2004. (See Doc. No. 17, Ex. J.) Defendant estimated that the repairs from the first fire would be $1,073,919.85, at replacement cost. (Id.) Defendant applied a 15% depreciation factor and arrived "at an actual cash value loss of $991,382.61." (Id.) Defendant's estimate of the cost of repairs was approximately $250,000.00 less than Plaintiff's estimate. (See Doc. No. 17, Ex. F.)
On September 1, 2005, Defendant denied Plaintiff's claim for coverage under the Policy for the second fire. (Doc. No. 12 ¶ 16; Doc. No. 17 ¶ 16.) Defendant reasoned that "the second fire was not a covered loss because it did not occur within the... policy period and the second fire is not the same 'occurrence' as the first fire." (Id.; see also Doc. No. 14, Ex. C.)
On November 1, 2005, Plaintiff filed a two-count Complaint in the Court of Common Pleas of Monroe County. (See Doc. No. 1.) Count I alleges that Defendant breached its contract with Plaintiff to provide insurance coverage under the Policy. (See Compl. ¶¶ 20-24.) Count II alleges that Defendant acted in bad faith under Pennsylvania law, 42 Pa. Cons. Stat. Ann. § 8371, "and other applicable law" by declining coverage to Plaintiff. (See Compl. ¶¶ 25-28.) Defendant removed the case to this Court pursuant to 28 U.S.C. § 1332.*fn2 (See Doc. No. 1.) Defendant filed the instant Motion for Summary Judgment, which is now ripe for disposition. (See Doc. Nos. 12-13.)
Summary judgment is appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A genuine issue of material fact exists only when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party moving for summary judgment bears the initial burden of demonstrating that there are no facts supporting the nonmoving party's legal position. Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986). Once the moving party carries this initial burden, the nonmoving party must set forth specific facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (explaining that the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts"). The nonmoving party "cannot 'rely merely upon bare assertions, conclusory allegations or suspicions' to support its claim." Fin. Software Sys., Inc., v. Lecocq, No. 07-3034, 2008 WL 2221903, at *2 (E.D. Pa. May 29, 2008) (quoting Fireman's Ins. Co. v. DeFresne, 676 F.2d 965, 969 (3d Cir. 1982)). Rather, the party opposing summary judgment must go beyond the pleadings and present evidence through affidavits, depositions, or admissions on file to show that there is a genuine issue for trial. Celotex, 477 U.S. at 324. When deciding a motion for summary judgment, we must view facts and inferences in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255; Siegel Transfer, Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1127 (3d Cir. 1995). However, we must not resolve factual disputes or make credibility determinations. Siegel Transfer, 54 F.3d at 1127.
A. Plaintiff's Breach of Contract Claim (Count I)
Defendant contends that "only loss or damage that commences during the policy period is covered" under the Policy. (Doc. No. 13 at 5.) Defendant argues that the damage caused by the second fire on May 23, 2005 "is not loss or damage that commenced during the policy period," and thus the damage is not covered, entitling Defendant to summary judgment. (Id. at 6.) Plaintiff maintains that the damage caused by the second fire "is resulting damage from the October 2004 loss" and therefore falls under the Policy. (Doc. No. 17 at 9.) Plaintiff argues that it had a "reasonable expectation... that [it] was covered for any damage to the building as a result of the October 2004 fire," and the second fire "would never have occurred... but for the first fire." (Id.) Plaintiff reasons that "[w]hen weather, mold, and further collapse cause additional damage to a fire damaged structure, the insurer is responsible to pay for such additional loss not because it is a new claim but because it falls under the doctrine of progressive loss and the resulting damage provisions of the policy." (Doc. No. 17 at 10.) Plaintiff's argument is one of "but for" causation. (See id. at 12 ("What is at issue is whether the fact finder will decide whether the second fire would not have occurred but for the first fire.")).
"The interpretation of an insurance contract regarding the existence or non-existence of coverage is 'generally performed by the court.'" Minn. Fire & Cas. Co. v. Greenfield, 855 A.2d 854, 861 (Pa. 2004) (quoting Gen. Acc. Ins. Co. of Am. v. Allen, 692 A.2d 1089, 1093 (Pa. 1997)). A court's "purpose in interpreting insurance contracts is to ascertain the intent of the parties as manifested by the terms used in the written insurance policy." Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 290 (Pa. 2007) (citing 401 Fourth Street, Inc., v. Investors Ins. Group, 879 A.2d 166, 171 (Pa. 2005)). "[W]hen a provision in the policy is ambiguous, the policy is to be construed in favor of the insured to further the contract's prime purpose of indemnification and against the insurer, as the insurer drafts the policy and controls coverage." Kvaerner Metals Div. of Kvaerner U.S., Inc., v. Commercial Union Ins. Co., 908 A.2d 888, 897 (Pa. 2006). However, "[w]hen the language of the policy is clear and unambiguous, we must give effect to that language." Id.
The inquiry begins with an examination of the policy language. "Words of 'common usage' in an insurance policy are to be construed in their natural, plain, and ordinary sense, and a court may inform its understanding of these terms by considering their dictionary definitions."
Wall Rose Mut. Ins. Co. v. Manross, 939 A.2d 958, 962 (Pa. Super. Ct. 2007). The first disputed provision of the policy in this case is the "Commercial Property Conditions" provision, which states that "[w]e cover loss or damage commencing... [d]uring the policy period shown in the Declarations." (Doc. No. 14 at 6). The essential word in this provision is "commencing," as Plaintiff contends that the second fire commenced within the Policy's coverage period, March 12, 2004 through March 12, 2005. The verb "commence" means "to have or make a beginning." Merriam-Webster Collegiate Dictionary 230 (10th ed. 2000). The noun "beginning" means "the point at which something begins," "origin," "source," "a rudimentary stage or early period." Id. at 102. Based upon these straightforward definitions, we conclude that the "Commercial Property Conditions" provision is not ambiguous and may be construed based on the plain meaning of its language. Specifically, we conclude that in using the word "commence" in this provision, the parties intended that coverage under the Policy would apply to loss or damage that occurs outside of the coverage period so long as that loss had its beginning within the policy period. See also Shields v. Reader's Digest Ass'n, Inc., 331 F.3d 536, 545 (6th Cir. 2003) ("To commence is '[t]o initiate by performing the first act or step... [or][t]o begin, institute or start.") (citing Black's Law Dictionary 268 (6th ed. 1990)). This construction is consistent with and reinforced by the "Innkeepers Property Coverage" provision. See Burton v. Republic Ins. Co., 845 A.2d 889, 893 (Pa. Super. Ct. 2004) ("In interpreting the terms of an insurance contract, we examine the contract in its entirety, giving all of the provisions their proper effect."); Riccio v. Am. Republic Ins. Co., 705 A.2d 422, 426 (Pa. 1997) (noting same). The "Innkeepers Property Coverage" provision states that "[w]e will pay for direct physical loss or damage...caused by or resulting from any Covered Cause of Loss." (See Doc. No. 14, Ex. A). The essential words in the "Innkeepers Property Coverage" provision are (1) "direct physical loss or damage" and (2) "resulting from."
1. "Direct Physical Loss"
The word "direct" in "direct physical loss" means "free from extraneous influence; immediate." Black's Law Dictionary 471 (7th ed. 1999); see also Merriam-Webster Collegiate Dictionary 327 (10th ed. 2000) (defining "direct" as "stemming immediately from a source," "having no compromising or impairing element," and "proceeding from one point to another in time or space without deviation," and "characterized by close logical, causal, or consequential relationship"). A "direct loss" is "[a] loss that results immediately and proximately from an event." Black's Law Dictionary 957 (7th ed. 1999). By using "direct" in the "Innkeepers Property" provision, the parties make explicit the common sense inference drawn from the "Commercial Property" provision that coverage for any loss or damage recognized outside the coverage period must have "close logical, causal, or consequential relationship" to an origin within the coverage period.
Courts applying Pennsylvania law have defined "direct physical loss" under an insurance contract as a loss that results "immediately and proximately from an event." See Easy Sportswear, Inc., v. Am. Economy Ins. Co., No. 05-1183, 2007 WL 4190767, at *6 (W.D. Pa. Nov. 21, 2007) (applying Pennsylvania law). In Easy Sportswear, the plaintiff brought claims against its insurer for breach of an insurance contract and bad faith after the plaintiff's property was damaged by rainfall from Hurricane Ivan. Id. at *2. Under the policy, the insurer agreed to "pay for direct physical loss of or damage to Covered Property... caused by or resulting from any Covered Cause of Loss." Id. at *5. Since the policy did not define "direct physical loss," the court used the plain and ordinary meaning of the words in order to interpret the provision.
Id. at *6 (citing McMahon v. State Farm Fire & Cas. Co., No. 06-3408, 2007 WL 1377670, at *3 (E.D. Pa. May 8, 2007)). The court turned to the dictionary meaning of "direct" as "free from extraneous influence; immediate." Id. (citing Black's Law Dictionary (8th ed. 2004) (page number omitted)). The court turned to the dictionary meaning of "direct loss" as "[a] loss that results immediately and proximately from an event." Id. (citing Black's Law Dictionary (2d ed. 2001) (page number omitted)). The court concluded that insurance coverage for a "direct physical loss" means that the loss must have "close logical, causal, or consequential relationship" with an earlier event. See also DiFabio v. Centaur Ins. Co., 531 A.2d 1141, 1143-44 (Pa. Super. Ct. 1987) (noting that "direct" means "stemming immediately from a source" and "characterized by close logical, causal or consequential relationship").
2. "Resulting from"
The words "resulting from" also require definition since Plaintiff contends that the Policy "provides coverage not only for damage caused by a fire, but coverage for damage resulting from that same covered loss." (Doc. No. 17 at 10.) The Supreme Court of Pennsylvania has interpreted the words "resulting from" in an insurance contract as meaning proximate causation. See Bowers v. Great E. Cas. Co., 103 A. 536, 537 (Pa. 1918) (interpreting the words "resulting from" in an insurance policy as implying "a remote or proximate cause"); see also Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 290 (Pa. 2007) (finding persuasive the rationale of courts that look to proximate cause to determine the number of occurrences under an insurance policy).*fn3 Proximate causation is a familiar concept in tort law. "Proximate cause 'is primarily a problem of law' and 'it is a... court's responsibility to evaluate the alleged facts and refuse to find an actor's conduct the legal cause of harm when it appears to the court highly extraordinary that [the actor's conduct] should have brought about the harm.'" Brown v. Phila. Coll. of Osteo. Med., 760 A.2d 863, 868 (Pa. Super. Ct. 2000) (citations omitted). "Proximate cause does not exist where the causal chain of events resulting in [the] plaintiff's injury is so remote as to appear highly extraordinary that the conduct could have brought about the harm." Lux v. Gerald E. Ort Trucking, Inc., 887 A.2d 1281, 1286-87 (Pa. Super. Ct. 2005); see also Pittsburgh Nat'l Bank v. Perr, 637 A.2d 334, 337 (Pa. Super. Ct. 1994), appeal denied, 644 A.2d 1202 (Pa. 1994) ("[T]he law makes a determination that, at some point along the causal chain, liability will be limited. The term 'proximate cause,' or 'legal cause' is applied by courts to those considerations which limit liability, even where the fact of causation can be demonstrated.").
Courts in other jurisdictions have also considered this "resulting from" contract language and likewise found proximate causation. See, e.g., Pioneer Chlor Alkali Co. v. Nat'l Union Fire Ins. Co., 863 F. Supp. 1226, 1233 (D. Nev. 1994) (applying Nevada law) (holding that "'[r]esulting from' actually confirms use of the efficient proximate cause doctrine [since a] 'loss caused by or resulting from' means a risk which is proximate as distinguished from remote"); Griffith v. Continental Cas. Co., 506 F. Supp. 1332, 1334 (N.D. Tex. 1981) (applying Texas law) (noting that "caused by or resulting from" language means proximate cause); Home Ins. Co. v. Am. Ins. Co., 147 A.D.2d 353, 354 (N.Y. App. Div. 1989) (applying New York law) (noting that phrase "caused by or resulting from" denotes proximate cause); Westchester Fire Ins. Co. v. Cont'l Ins. Co., 312 A.2d 664, 668-69 (N.J. App. Div. 1973) (applying New Jersey law) (equating phrases "caused by" and "resulting from" to proximate cause), aff'd, 319 A.2d 732 (N.J. 1974).
3. The Meaning of the Contract Provisions, Taken Together
The contract provisions at issue here state that Defendant "will pay for direct physical loss or damage...caused by or resulting from any Covered Cause of Loss" provided that the "loss or damage commenc[es]... [d]uring the policy period." (See Doc. No. 14, Ex. A.) Plaintiff invites us to view the first fire as the "but for" cause of the second fire. (Doc. No. 17-2 at 9.) Under Pennsylvania law, "[t]he term 'but for' has been used in analyzing whether or not a particular act constitutes a cause in fact, rather than the legal or proximate cause of an injury." Mahon v. Worker's Comp. App. Bd., 835 A.2d 420, 428 (Pa. Commw. Ct. 2003) (citing Smith v. Phila. Trans. Co., 195 A.2d 168, 170 (Pa. Super. Ct. 1963)). We are satisfied that proximate causation -- not "but for" causation -- is the framework that the parties intended to govern. We reach this conclusion based on the plain meaning of the terms in the Policy as evidenced by the dictionary definitions, the Pennsylvania Supreme Court's interpretation of similar provisions in Bowers and Baumhammers, and the reasoning of the district court in Easy Sportswear that applied Pennsylvania law. Our conclusion is also consistent with the conclusions reached by courts in other jurisdictions that considered similar policy language. See, e.g., Pioneer, 863 F. Supp. at 1233; Griffith, 506 F. Supp. at 1334; Home Ins. Co., 147 A.D.2d at 354; Westchester, 312 A.2d at 668-69. Thus, the Policy does not cover all losses that occur outside the policy period that would not have occurred "but for" a covered loss, as Plaintiff contends. Rather, the Policy covers losses that occur outside of the policy period if the losses are proximately caused by a covered loss.
The record in this case does not support a finding that the first fire, a covered harm, was the proximate cause of the second fire. The second fire occurred seven months after the first fire. During this period there were repeated acts of vandalism. The acts of vandalism in turn prompted regular police patrols and increased security measures at the main building. The seven month span itself was caused by a delayed investigation. As the Pennsylvania Supreme Court in Baumhammers turned to the single "cause" of the loss to find a single "occurrence" under an insurance policy, here we turn to the multiple "causes" of the loss -- the first fire, multiple intervening acts of vandalism, a delayed investigation -- and find separate "occurrences."*fn4 There is a relationship between the first fire and the second fire based on the events that separate them in time. However, the relationship is not one of proximate causation as the Policy requires.
Plaintiff argues that the "progressive movement (or progressive loss) doctrine" applies to provide coverage under the Policy for Plaintiff's losses from the second fire. (Doc. No. 17 at 11.) Under this doctrine, "damage occurring outside of the policy period [can be] covered... where the condition of the property deteriorates over time." (Doc. No. 13 at 9.) For this proposition, Plaintiff relies on Snapp v. State Farm Fire and Casualty Company, 206 Cal. App. 2d 827, 831 (Cal. App. 2 Dist. 1962). Defendant relies on the same case to show that the doctrine does not apply. In Snapp, the plaintiffs built their residence upon a poorly-made "fill." Id. at 829. Due to the potentially unstable fill and heavy rainfall, the land beneath the plaintiffs' residence began to move laterally, causing damage to the foundation of the house. Id. The damage became progressively worse and the foundation continued to deteriorate after the policy expired. Id. Although the trial court awarded the plaintiffs damages, the court limited the damages to the losses that the plaintiffs sustained "prior to the expiration date of the policy." Id. at 831. On appeal, the court of appeals reversed the trial court's limitation of damages, holding that "[t]o permit the insurer to terminate its liability while the fortuitous peril which materialized during the term of the policy was still active would... allow an injustice to be worked upon the insured by defeating the very substance of the protection for which his premiums were paid." Id. The court emphasized that the defendant "could not terminate its liability once the hazard insured against had materialized." Id. at 833-34.
Snapp is distinguishable from the instant case. While the unstable land in Snapp materialized during the policy period and continued to cause damage after the policy period had expired, here the second fire did not "materialize" during the policy period. Faulty wiring caused the first fire. That fire was extinguished on October 1, 2004. Seven months later, vandals caused the second fire. If the first fire had not been fully extinguished on October 1, 2004, and had instead continued to smolder, culminating in the second fire, then Snapp might be instructive. That is not what happened. The second fire had an independent origin and did not ignite during the policy period. The fire-damaged main building did not continue to smolder, did not gradually weaken, and did not progressively deteriorate apart from the acts of vandalism. The "progressive movement" doctrine does not apply.*fn5
Summary judgment therefore must be granted in favor of Defendant as to Count One.
B. Plaintiff's Bad Faith Claim (Count II)
Count Two alleges that Defendant's "refusal to compensate [Plaintiff] for its losses constitutes bad faith toward an insured contrary to the provisions of 42 Pa. C.S.A. § 8371 and other applicable law."*fn6 (Doc. No. 14-4 at 13.) Plaintiff argues that Count Two alleges bad faith in Defendant's failure to make timely payment on Plaintiff's initial claim for losses from the October 2004 fire. (Doc. No. 17-2 at 12-14.) Defendant argues that Count Two alleges bad faith in its failure to compensate Plaintiff for its losses from the May 2005 fire. (See Doc. No. 18.) Count Two incorporates the preceding paragraphs of the Complaint "as if set forth fully." (See Compl. ¶ 25.) The preceding paragraphs of the Complaint make it clear that Count Two could refer to either the first fire or the second fire.*fn7
"The nature and scope of § 8371 is still 'unsettled' in Pennsylvania law." DeWalt v. Oh. Cas. Ins. Co., 513 F. Supp. 2d 287, 293 (E.D. Pa. 2007) (citing Mishoe v. Erie Ins. Co., 824 A.2d 1153, 1161 n.11 (Pa. 2003)). The statute does not define "bad faith" or specify what insurer actions give rise to liability, and the Pennsylvania Supreme Court has yet to address the issue. See id. The Court of Appeals for the Third Circuit has predicted that the Pennsylvania Supreme Court will follow the two-prong test for liability set out in Terletsky v. Prudential Property & Cas. Ins. Co., 649 A.2d 680, 689-90 (Pa. Super. Ct. 1994). See Nw. Mut. Life Ins. Co. v. Babayan, 430 F.3d 121, 137 (3d Cir. 2005) (adopting standard); see also Jurinko v. Med. Protective Co., No. 06-3519, 2008 WL 5378011, at *5 (3d Cir. Dec. 24, 2008) (unpublished opinion) (noting same). Under the two-prong test, the plaintiff must show (1) that the insurer lacked a reasonable basis for denying coverage; and (2) that the insurer knew of, or recklessly disregarded, its lack of a reasonable basis. Terletsky, 649 A.2d at 689-90. The plaintiff must establish both elements by "clear and convincing evidence." Id. "In order to survive a dispositive motion as to bad faith, a plaintiff must meet the substantial burden of showing by clear and convincing evidence that said elements are met." Easy Sportswear, 2007 WL 4190767, at *12 (citing Kearns v. Minn. Mut. Life Ins. Co., 75 F. Supp. 2d 413, 421 (E.D. Pa. 1999)). "Accordingly, the plaintiff's burden in opposing a summary judgment motion is commensurately high because the court must view the evidence presented in light of the substantive evidentiary burden at trial." Id. at *12 (citation omitted).
Pennsylvania courts have defined "bad faith" on the part of an insurer as: any frivolous or unfounded refusal to pay proceeds of 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.
Adamski v. Allstate Ins. Co., 738 A.2d 1033, 1036 (Pa. Super. Ct. 1999). "Bad faith encompasses a wide variety of objectionable conduct." Brown v. Progressive Ins. Co., 860 A.2d 493, 500-01 (Pa. Super. Ct. 2004). "For example, bad faith exists where 'the insurer did not have a reasonable basis for denying benefits under the policy and... the insurer knew of or recklessly disregarded its lack of reasonable basis in denying the claim.'" Id. (citing O'Donnell v. Allstate Ins. Co., 734 A.2d 901, 906 (Pa. Super. Ct. 1999)); see also Terletsky, 649 A.2d at 688 (noting that bad faith is a frivolous or unfounded refusal to pay the proceeds of a policy done with dishonest purpose, motivated by self-interest or ill will). In Hollock v. Erie Insurance Exchange, 842 A.2d 409, 415 (Pa. Super. Ct. 2004) (en banc), the Pennsylvania Superior Court opined that "the broad language of § 8371 was designed to remedy all instances of bad faith conduct by an insurer, whether occurring before, during or after litigation." Courts have since noted that "[i]mplicit in Hollock's holding... is the requirement that the insurer properly investigate claims prior to refusing to pay the proceeds of the policy to its insured." Bombar v. W. Am. Ins. Co., 932 A.2d 78, 92 (Pa. Super. Ct. 2007) (citation omitted); see also Condio v. Erie Ins. Exch., 899 A.2d 1136 (Pa. Super. Ct. 2006) (holding that bad faith includes lack of good faith in investigating the facts of a complaint). Thus, bad faith conduct may encompass the insurer's settlement and investigative practices. See Birth Ctr. v. St. Paul Cos.,787 A.2d 376, 378 (Pa. 2001) (affirming a finding of bad faith where the insurer intransigently refused to settle a claim that could have been settled within policy limits and the insurer lacked a bona fide belief that it had a good possibility of winning at trial); O'Donnell, 734 A.2d at 906 ("An action for bad faith may also extend to the insurer's investigative practices.").
Delay in making payment on a claim is "a relevant factor in determining whether bad faith has occurred." Kosierowski v. Allstate Ins. Co., 51 F. Supp. 2d 583, 589 (E.D. Pa. 1999) (applying Pennsylvania law), aff'd, 234 F.3d 1265 (3d Cir. 2000). "[A] long period of time between demand and settlement does not, on its own, necessarily constitute bad faith. Rather, courts have looked to the degree to which a defendant insurer knew that it had no basis to deny the claimant...." Id. (citations omitted); see also Quaciari v. Allstate Ins. Co., 998 F. Supp. 578, 582-83 (E.D. Pa. 1998), aff'd, 172 F.3d 860 (3d Cir. 1998) (granting summary judgment for insurer in part because periods of delay were "equally attributable" to the plaintiff and the defendant, and holding that "even if all delay were attributable to [the defendant], it would not, without more, be sufficient to establish bad faith"); Aquila v. Nationwide Mut. Ins. Co., No. 07- 2696, 2008 WL 5348137, at *9 (E.D. Pa. Dec. 15, 2008) (applying Pennsylvania law) ("It is well-settled... that 'a long period of time between demand and settlement does not, on its own, necessarily constitute bad faith"). "[M]ere negligence or bad judgment is not bad faith." Greene v. United Services Auto. Ass'n, 936 A.2d 1178, 1188 (Pa. Super. Ct. 2007), appeal denied, 598 Pa. 750 (2008).
Evidence of an insurer's delay in settling a claim can support a jury verdict of bad faith when the plaintiff makes multiple demands for payment and the insurer's liability is clear. See Klinger v. State Farm Mut. Auto. Ins. Co., 115 F.3d 230, 233 (3d Cir. 1997) (applying Pennsylvania law). In Klinger, the plaintiffs were injured in a car accident in August 1992 and thereafter filed underinsured motorist claims with the defendant-insurer. Id. at 232. The defendant disputed the available policy coverage and submitted the claims to arbitration, which established the available policy coverage. Id. In November 1993, the plaintiffs' counsel sent two letters demanding that the defendant tender the policy limits in accordance with the arbitration decision. Id. Four months later, the plaintiffs' counsel offered to provide "whatever information [that the defendant] needed to evaluate the extent of damages," but "still [the defendant] did nothing." Id. The plaintiffs' counsel again demanded that the defendant tender the policy limits, but the defendant's counsel did not inform the defendant of the demand. Id. at 233. In April 1994, the plaintiffs' counsel wrote directly to the defendant and inquired about settlement, but "[s]till [the defendant] offered its insured nothing." Id. In June 1994, the defendant made no offer to pay the plaintiffs anything, even though its counsel recommended payment of the policy limits. Id. That month, the plaintiffs were awarded damages following a damages arbitration. Id. "Finally," in August 1994, "a full two years after the accident, and [nine] months after [the defendant] had all the information necessary to evaluate [the plaintiffs'] claims, [the defendant] paid them." Id. The plaintiffs thereafter filed a lawsuit alleging that the defendant's "delay in paying their claims was a display of bad faith under 42 Pa. Cons. Stat. Ann. § 8371." Id. A jury found in favor of the plaintiffs and awarded damages. Id. On appeal, the Third Circuit held that "the evidence was sufficient for a jury to conclude that [the defendant] lacked a reasonable basis for refusing to pay [the plaintiffs], and knew or recklessly disregarded that fact." Id. As evidence of the defendant's bad faith, the Third Circuit observed that the defendant's "liability was clear" after the plaintiffs submitted a demand package, the defendant was advised by its attorney to tender the policy limits before a scheduled arbitration, the defendant "never offered to pay [the plaintiffs] anything beyond [an] early and clearly inadequate offer," and the "plaintiffs' expert testified that [the defendant] acted recklessly and unreasonably." Id.
An insurer generally does not act in bad faith by delaying an investigation when "red flags" cause the delay. See, e.g., Brown v. Liberty Mut. Ins. Group, No. 99-6596, 2001 WL 87741, at *3 (E.D. Pa. Jan. 30, 2001); Sanders v. State Farm Ins. Co., 47 Pa. D.&C. 4th 129, 139 (Pa. Com. Pl. Ct. 2000), aff'd, 777 A.2d 516 (Pa. Super. Ct. 2001). In Brown, the plaintiff alleged that the defendant, her insurer, acted in bad faith in the handling of her claim for car theft. Id. In processing the plaintiff's claim, the defendant conducted a routine examination of the car and discovered that the ignition had not been disturbed and the steering wheel column was still locked. Id. An uncompromised ignition and a locked steering wheel were "red flags" that triggered further investigation into theft claims as a precaution against fraud. Id. The court held that an eleven-month delay in paying the plaintiff's claim did not constitute bad faith because the "red flags" merited additional investigation. Id. The court observed that the insurance company acted reasonably in delaying the claim while the theft was further investigated. Id.
Similarly, in Sanders the plaintiff alleged that the defendant, his insurer, acted in bad faith in the handling of his claim for theft of a Corvette. See 47 Pa. D.&C. 4th at 131. The plaintiff alleged that the Corvette was stolen from his garage but there was no sign of forced entry into the garage, no sign of forced entry into the vehicle, and no apparent damage to the vehicle. The court held that a delay of eight months did not constitute bad faith because the plaintiff's claim presented at least ten "red flags" during the investigation, which created a reasonable cause for the delay. See id. at 139. On appeal, the Superior Court affirmed. See 777 A.2d at 516; see also Aquila, 2008 WL 5348137, at *8 (granting summary judgment in favor of the insurer where the delay was caused by multiple "red flags" that prompted an investigation into the plaintiff's claim).
A jury may award punitive damages against an insurer that fails to make payment after ten months and offers no explanation for the delay. See Kraeger v. Nationwide Mut. Ins. Co., No. 95-7550, 1996 WL 711488, at *3 (E.D. Pa. Dec. 6, 1996) (applying Pennsylvania law). In Kraeger, the plaintiff had an uninsured motorist policy with the defendant, an insurer. Id. at *1. The plaintiff made a claim under the policy after suffering injuries in a car accident, and the defendant took no action on the plaintiff's claim for over ten months. Id. The defendant never stated that any portion of the plaintiff's claim was disputed. Id. at *3. Nevertheless, the defendant "ignored [the plaintiff's] inquiries and failed to offer any amount to [the plaintiff] until a bad faith suit was imminent." Id. Even then, the defendant "only offered $70,000" when the defendant's outside counsel valued the claim between $75,000 and $95,000. Id. The plaintiff alleged that the defendant acted in bad faith under § 8371. Id. The court denied the defendant's motion for partial summary judgment on the issue of punitive damages, holding that a "genuine issue of material fact exists as to whether [the d]efendant acted with a reckless disregard to [the plaintiff's] rights." Id. Thus, the ten-month, unexplained refusal to pay the plaintiff's claim without evidence of "red flags" was sufficient for the jury to consider punitive damages.
In this case, there is evidence that Defendant did not attempt in good faith to effectuate a prompt, fair, and equitable settlement of Plaintiff's claim. From the beginning, Plaintiff told Defendant that it intended to rebuild. Defendant assured Plaintiff that it "would be no problem to rebuild the property" and within two weeks of the fire sent its contractor, Belfor, to view the premises. By January 2005, Plaintiff had provided Defendant with an estimate of the damage. Defendant's liability was clear at a very early stage. In the ensuing months, the rebuilding had not started and vandals began to enter the premises and cause damage. Plaintiff told Defendant about the vandalism. Jones made multiple telephone calls to Defendant demanding payment and asking what was going on. Jones inquired with Defendant's former employee about how to "get this thing done." Jones asked Defendant to "just give me what you think you owe us." Nevertheless, Defendant did not make any payment of the insurance proceeds to Plaintiff and did not provide its estimate of the damage. Moreover, Belfor did not start reconstruction. There were no "red flags" that delayed Plaintiff's claim. There is no indication that Defendant was gathering facts for an investigation. The delay continued.
It was during this limbo that the second fire destroyed Plaintiff's main building. Only after the second fire destroyed what remained of Plaintiff's building did Defendant finally get around to providing its estimate of the damage from the first fire. Defendant provided its estimate nine months after the first fire and six months after Plaintiff had submitted its own estimate, even though the contractor that provided Defendant's estimate, Belfor, is the same contractor that had visited the premises at Defendant's request within two weeks of the fire. Belfor's estimate of the damage was approximately $1 million. The estimate that Plaintiff had provided to Defendant months earlier was only $1,250,745.11.
Considering all of these facts, we are satisfied that a reasonable jury could find by clear and convincing evidence that Defendant acted in bad faith. Defendant, like the insurer in Kraeger, failed to take action over a period of approximately ten months. See 1996 WL 711488, at *3. Defendant, like the insurer in Klinger, waited nine months before providing payment under the policy despite multiple requests from the insured. See 115 F.3d at 233. In both Kraeger and Klinger, the court determined that a jury should be permitted to consider an award of punitive damages. We are satisfied that a jury in this case should be permitted to decide Plaintiff's bad faith claim under § 8371. Unlike the insurers in Brown, Sanders, and Aquila that offered an explanation for their delay, Defendant has offered no explanation for its inaction and there is no evidence of any "red flags" that might have delayed the investigation. Summary judgment in favor of Defendant must be denied as to Count Two.*fn8
For all of these reasons, Defendant's Motion will be granted in part and denied in part. An appropriate Order follows.
AND NOW, this 7th day of April, 2009, upon consideration of Defendant's Motion for Summary Judgment (Doc. No. 12), it is ORDERED as follows:
1. The Motion is GRANTED as to Count I, and Count I is DISMISSED.
2. The Motion is DENIED as to Count II.
R. Barclay Surrick, J.
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text:
Scallop Piccata on Angel Hair Pasta
Total Time
Prep 20 mins
Cook 15 mins
"Superfine angel hair and delicate scallops are coated with a light lemon, white wine and caper sauce. Make it a Meal: Serve with a crisp Sauvignon Blanc and Asparagus with Anchovies & Garlic." Found on Eating Well Newsletter, May/07. We made this for Live Strong Day - the sauce is very lemony just like with the veal - and it is just wonderful!
Ingredients Nutrition
- 1 lb dry sea scallops, tough muscle removed
- 1⁄4 teaspoon kosher salt
- 1⁄4 teaspoon fresh ground pepper
- 1 tablespoon extra virgin olive oil
- 8 ounces whole wheat angel hair pasta
- 1⁄2 cup white wine
- 1⁄2 cup clam juice
- 2 teaspoons cornstarch
- 1⁄4 cup chopped garlic
- 3 tablespoons lemon juice (not that bottled stuff!)
- 1 tablespoon capers, rinsed and chopped
- 2 teaspoons butter
- 2 tablespoons chopped fresh parsley
- Put a large pot of water on to boil.
- Sprinkle scallops on both sides with salt and pepper.
- Heat oil in a large nonstick skillet over medium-high heat.
- Reduce heat to medium and add the scallops; cook, turning once, until browned on both sides, about 6 minutes total.
- Transfer to a plate.
- Cook pasta in the boiling water until not quite tender, about 4 minutes.
- Drain and rinse.
- Whisk wine, clam juice and cornstarch in a small bowl until smooth.
- Cook garlic in the pan over medium-high heat, stirring often, until softened, 1 to 2 minutes.
- Add the wine mixture; bring to a boil and cook until thickened, about 2 minutes.
- Stir in lemon juice, capers and butter; cook until the butter melts, 1 to 2 minutes.
- Return the scallops to the pan, add the pasta and cook, stirring gently, until heated through and coated with the sauce, about 1 minute.
- Stir in parsley and serve immediately.
Most Helpful
"I Love A Flexible Recipe"! This one is a "keeper"! Don't have Sea Scallops? Use Bay Scallops like I did. - Don't have Clam Juice? Use a 6.5 oz can of Chopped Clams, for the juice, like I did. I followed the rest of the instructions for your recipe. (Bay Scallops need less time on high heat) I added the chopped clams before serving. (Just warmed them up) The combinations of scallops and clams with your super sauce was "fantastic". Served with Asparagus and a green salad. Even the leftover was "delish". Thank you for a new favorite.
I followed the recipe exactly, except I used the juice of 1 jemon in place of the 3 T. as we like our pasta with lots of lemon flavor. This recipe is definately a winner in my house. We will be making often in the future! Thanks DiScharf for another lovely recipe for my file.
Made exactly following the recipe and it was wonderful. Next time, and there will be a next time, I think I will double the sauce and up the lemon juice as we love a real lemony taste for piccata. I think I will also try this with shrimp. I served with the Asparagus with Anchovies & Garlic, another one of our favorite sides. Thanks for posting.


text:
25% off Hoodies and Sweatshirts. 20% off everything else. Use MANICMON
London, April 2007
lake reflections sunset swan water
verry peaceful view. I like the color.
Nice reflective light here – a great addition to the Light & Reflection group
very calming, great shot!
Nice shot!
Stunning capture!
Gorgeous Capture Lucio!! And Congratulations on your Feature!!!!!!!!!!!!!!
Beautiful!! congratulations on your feature!! :D
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text:
Talking Tom Cat Toy with Sounds - 8" These Talking Tom plush toys pay homage to the mad moggy from the cult Smartphone app! Just press his paw and you will hear the original app sounds in their full glory, including purring, punch, shouting, groaning, grimacing and more! Tom's best friend Talking Ben is also available, but which of our Talking Friends will you choose?
Catalogue Number: 519-0986
- Made of soft plush with embroidered detailing
- Non replaceable batteries
- They measure approx 21 cm x 16 cm x 9 cm
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Product Details
Product specifications
Batteries Included
Power Source
Battery only
Product Height
13.5 Centimetre
Product Width
9.0 Centimetre
Product Depth
8.0 Centimetre
Product Weight
73.0 Gram
Key Information
Animated soft toy
Suitable Age From
Suitable from 4 years
Age Range
3-4 years


text:
Kevin Carey directs the Education Policy Program at the New America Foundation. His writing has appeared in the New York Times, the New Republic, the Washington Post, and elsewhere. Carey lives with his wife and daughter on Capitol Hill.
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" Something About You, the first book in the FBI-US Attorney Series is perfect listening for a day at the beach or a long automobile trip. Author Julie James establishes suspense early in the plot with ..."
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