IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

 

: 

MARVIN MANDEL : CIVIL ACTION 

 Plaintiff :

 : NO. 02-CV-4468 

v. :

: JUDGE KATZ

UNUMPROVIDENT CORPORATION : 

 Defendant : 

 

ORDER

AND NOW, this ____________ day of __________________________, 2002, upon 

consideration of Defendant UnumProvident Corporation’s Motion to Dismiss Plaintiff’s 

Complaint, and any response thereto, it is hereby ORDERED and DECREED that said motion 

is GRANTED. Accordingly, the following is ORDERED: 

1. Plaintiff’s complaint is dismissed without prejudice. Plaintiff may re-file his complaint 

within 20 days, naming the correct defendant, Provident Life and Accident Insurance 

Company. 

2. Count III (Breach of Fiduciary Duty) is dismissed with prejudice. 

3. Count VI (Fraud) is dismissed with prejudice. 

4. Count VII (Declaratory Judgment of Permanent Disability and Entitlement to Future,

Unaccrued Disability Benefits) is dismissed with prejudice.

5. Count VIII (Punitive Damages) is dismissed with prejudice. 

BY THE COURT: 

_____________________________ 

J. 

Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 1 of 14
IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

 

: 

MARVIN MANDEL : CIVIL ACTION 

 Plaintiff :

 : NO. 02-CV-4468 

v. :

: JUDGE KATZ

UNUMPROVIDENT CORPORATION : 

 Defendant : 

 

DEFENDANT UNUMPROVIDENT CORPORATION’S MOTION TO DISMISS 

PLAINTIFF’S COMPLAINT 

Defendant UnumProvident Corporation, by and through its attorneys, hereby moves this 

Court to dismiss plaintiff’s complaint pursuant to Rule 12(b)(6). In support thereof, defendant

avers the following: 

1. Plaintiff’s complaint was originally docketed in the Philadelphia County Court of 

Common Pleas at June Term 2002, No. 001168. 

2. Defendant received plaintiff’s complaint via mail on June 14, 2002. 

3. Defendant removed this action to this Honorable Court on July 8, 2002. 

4. This action concerns plaintiff’s alleged entitlement to disability benefits under a 

policy of disability insurance issued to plaintiff by Provident Life and Accident Insurance 

Company. 

5. Defendant UnumProvident Corporation now files the instant motion to dismiss. 

6. As outlined in the attached Memorandum of Law, UnumProvident Corporation is

not the proper defendant in this matter and should be dismissed. The proper defendant is 

Provident Life and Accident Insurance Company. 

7. As outlined in the attached Memorandum of Law, Count III of plaintiff’s 

complaint (Breach of Fiduciary Duty) should be dismissed with prejudice. 

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 2 of 14
8. As outlined in the attached Memorandum of Law, Count VI of plaintiff’s 

complaint (Fraud) should be dismissed with prejudice. 

9. As outlined in the attached Memorandum of Law, Count VII of plaintiff’s 

complaint (Declaratory Judgment of Permanent Disability and Entitlement to Future, Unaccrued 

Disability Benefits) should be dismissed with prejudice. 

10. As outlined in the attached Memorandum of Law, Count VIII of plaintiff’s 

complaint (Punitive Damages) should be dismissed with prejudice. 

WHEREFORE, pursuant to the attached Memorandum of Law, defendant requests an 

order in the form proposed. 

 

DATE: __________ 

POST & SHELL, P.C.

BY:

 RICHARD L. MCMONIGLE, ESQUIRE 

STEVEN J. SCHILDT, ESQUIRE 

ATTORNEYS FOR DEFENDANT 

1800 JFK Boulevard, 19th Floor 

Philadelphia, PA 19103 

 (215) 587-1089 

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 3 of 14
IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

 

: 

MARVIN MANDEL : CIVIL ACTION 

 Plaintiff :

 : NO. 02-CV-4468 

v. :

: JUDGE KATZ

UNUMPROVIDENT CORPORATION : 

 Defendant : 

 

 MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT UNUMPROVIDENT 

CORPORATION’S MOTION TO DISMISS

I. PROCEDURAL HISTORY, NATURE OF THE ACTION, AND CHOICE OF 

LAW

Plaintiff’s complaint was originally docketed in the Philadelphia County Court of 

Common Pleas at June Term 2002, No. 001168. Defendant received plaintiff’s complaint via 

mail on June 14, 2002. Defendant removed this action to this Honorable Court on July 8, 2002. 

This action concerns plaintiff’s alleged entitlement to disability benefits under a policy of 

disability insurance issued to plaintiff by Provident Life and Accident Insurance Company. 

Plaintiff’s complaint is deficient/improper in several areas. First, UnumProvident 

Corporation is not the proper defendant in this matter and should be dismissed. The proper 

defendant is Provident Life and Accident Insurance Company. Second, Count III of plaintiff’s

complaint (Breach of Fiduciary Duty) should be dismissed with prejudice. Third, Count VI of

plaintiff’s complaint (Fraud) should be dismissed with prejudice. Fourth, Count VII of 

plaintiff’s complaint (Declaratory Judgment of Permanent Disability and Entitlement to Future,

Unaccrued Disability Benefits) should be dismissed with prejudice. Fifth and finally, Count VIII 

of plaintiff’s complaint (Punitive Damages) should be dismissed with prejudice. 

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 4 of 14
As to choice of law, “[u]nder Pennsylvania choice of law rules, an insurance contract is 

governed by the law of the state in which the contract was made.” Travelers Indem. Co. v. 

Fantozzi, 825 F. Supp. 80, 84 (E.D. Pa. 1993) (citing Crawford v. Manhattan Life Ins. Co., 221 

A.2d 877, 880 (Pa. Super. Ct. 1966)). The “place of making an insurance contract is the place of

delivery,” which is presumed to be “the residence of the insured.” Id. (citing cases); Cabrelli v.

State Farm Fire & Casualty Co., 1997 U.S. Dist. LEXIS 197, *4 (E.D. Pa. 1997). Instantly, the 

disability policy at issue was delivered to the plaintiff at his former Pennsylvania residence. 

Accordingly, Pennsylvania law will control. 

II. UNUMPROVIDENT CORPORATION IS NOT THE PROPER PARTY TO THIS 

LITIGATION AND SHOULD BE DISMISSED (THE PROPER PARTY BEING 

PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY)

A. UnumProvident Corporation Should be Dismissed Because it is Not and Has 

Never Been a Party to the Insurance Contract Issued to Plaintiff

The insurance policy at issue was issued by one entity, Provident Life and Accident 

Insurance Company. A true and correct copy of this policy is attached hereto as Exhibit “A”. As 

is plain, the first line of the first page defines “we/our/us” as Provident Life and Accident 

Insurance Company. Further, both policy riders are signed by John Barnes, a Vice President 

with Provident Life and Accident Insurance Company. Finally, both application forms (the last

four pages) clearly state at the top “Provident Life and Accident Insurance Company.” 

Attached hereto as Exhibit “B” is an Affidavit from Susan Roth, who at UnumProvident 

Corporation holds the positions of Vice President, Corporate Secretary, and Assistant General 

Counsel. Ms. Roth’s Affidavit attests to the following facts: 

1. UnumProvident is a non-insurance holding company. 

2. UnumProvident is not an insurance company, is not and has never been licensed 

to sell insurance, and has never sold or issued an insurance policy. 

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 5 of 14
3. Provident Life and Accident Insurance Company is an operating insurance 

company licensed to sell insurance products in Pennsylvania. 

4. Provident Life and Accident Insurance Company is an indirect subsidiary of 

UnumProvident. 

5. UnumProvident has never assumed any liability for insurance policies issued by 

Provident Life and Accident Insurance Company or for claims under said policies. 

Therefore, any legal obligation arising out of the insurance policy at issue attaches exclusively to 

Provident Life and Accident Insurance Company, not UnumProvident Corporation. 

It is a well-settled proposition that “[t]o make out a cause of action for breach of contract 

under the law of Pennsylvania, four elements must be proven: (1) the existence of a contract to 

which plaintiff and defendant were parties; (2) the essential terms of the contract; (3) a breach

of the duty imposed by the contract; and (4) that damages resulted from the breach.” Caplan v.

Fellheimer, 5 F. Supp.2d 299, 303 (E.D. Pa. 1998) (citing Pennsylvania cases) (emphasis added). 

Concerning the first element, in Lockhart v. Federal Ins. Co., 1998 U.S. Dist. LEXIS 4046 (E.D. 

Pa. 1998), the court cited Pennsylvania cases for the well-established proposition that “one 

cannot be liable for a breach of contract unless one is a party to that contract.” Id. at *7. As to 

defendant UnumProvident Corporation, the first element is not met because UnumProvident is 

not a party to the insurance contract at issue. As such, plaintiff cannot assert any causes of action 

against UnumProvident arising out of, flowing from, or related to any alleged breach of 

plaintiff’s insurance contract. 

Under Pennsylvania law, in a suit concerning insurance contract benefits, the proper 

defendant is the insurer which issued the contract. For example, in Hudock v. Donegal Mutual

Ins. Co., 264 A.2d 668 (Pa. 1970), the plaintiffs, dissatisfied with the compensation offered on a 

fire loss claim, sued their insurers, the insurers’ adjustment companies, and the individual 

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 6 of 14
adjusters. In affirming the trial court’s dismissal of the adjustment companies and their 

individual adjusters, the court held as follows: 

The basic defect in these allegations, as noted by the court below, is the 

failure to establish a contractual relationship between the adjusters and the insured

appellants. Without such a relationship, it is impossible for the adjusters to be 

liable for breach of contract to the insureds. 

Id. at 672. Instantly, because UnumProvident Corporation is not in privity of contract with

plaintiff, it should be dismissed as a named defendant. 

Similarly, due to the lack of privity of contract between plaintiff and UnumProvident 

Corporation, plaintiff cannot assert against UnumProvident claims arising out of, flowing from,

or related to any alleged breach of his insurance contract. For example, Pennsylvania courts 

have refused to allow bad faith claims under 42 Pa.C.S.A. § 8371 against parties other than the

insurance company which issued the policy at issue. For example, in Lockhart v. Federal Ins.

Co., 1998 U.S. Dist. LEXIS 4046 (E.D. Pa. 1998), the plaintiff filed a breach of contract and bad 

faith action against both the insurer who issued the insurance policy at issue as well as several 

other affiliated/sister insurance companies. The court dismissed the affiliated/sister insurers,

reasoning as follows: 

From the evidence of record one cannot reasonably conclude that 

defendant Chubb was a party to the insurance policy [at issue]. The plain 

language of the policy categorically identifies Federal as the party which agreed 

to provide plaintiff with coverage. 

* * * 

That Federal and other affiliated companies use stationery with a common

Chubb Group letterhead or forms copyrighted by defendant Chubb does not make

that defendant a party to plaintiff’s insurance contract. 

Id. at *7-8. Thus, the court held that “plaintiff cannot sustain a claim against Chubb for 

breaching an insurance contract or for bad faith conduct ‘toward the insured’ by ‘the insurer.’” 

Id. at *10; Beaver v. Kemper National Ins. Co, 1994 U.S. Dist. LEXIS 2793 (E.D. Pa. 1994) 

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 7 of 14
(dismissing adjustment company and adjuster from bad faith suit due to lack of contractual 

privity with insured). 

Finally, in T&N PLC v. Pennsylvania Ins. Guaranty Ass’n, 800 F. Supp. 1259 (E.D. Pa. 

1992), the court was faced a bad faith claim under 42 Pa.C.S.A. § 8371 against the Pennsylvania 

Insurance Guaranty Association (“PIGA”). The court reasoned that the key question was

whether or not PIGA was an “insurer” and began its analysis by citing the definition of an 

“insurer” contained in the 1990 edition of Black’s Law Dictionary: “Insurer. The underwriter or 

insurance company with whom a contract of insurance is made. The one who assumes risk or 

underwrites a policy, or the underwriter or company with whom a contract of insurance is 

made.” Id. at 1262. In the court’s words, “it is generally recognized that an insurer issues 

policies, collects premiums, and in exchange assumes certain risks and contractual obligations.” 

Id. The court concluded that, much like UnumProvident Corporation, PIGA issues no policies, 

collects no premiums, and assumes no contractual obligations to insureds. Id. at 1263. Thus, the 

court held that PIGA is not an insurer and is therefore not subject to bad faith claims under 42 

Pa.C.S.A. § 8371. Id. at 1264; Dresder v. State Farm Ins. Co., 1995 U.S. Dist. LEXIS 11213, *2 

(E.D. Pa. 1995) (noting that “[b]y its terms, 42 Pa.C.S.A. § 8371 applies only to the conduct of

an ‘insurer’ toward an insured.”). 

Much like PIGA, Ms. Roth’s Affidavit (attached hereto as Exhibit “B”) demonstrates that 

UnumProvident Corporation issues no insurance policies, collects no premiums, and assumes no 

policy-based contractual obligations to insureds. Thus, the above logic and authority dictates 

that UnumProvident is not an insurer, cannot be held liable for insurer bad faith (or for any other 

causes of action arising out of, flowing from, or related to any alleged breach of plaintiff’s 

insurance contract), and should be dismissed from this action. Instead, plaintiff’s causes of

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 8 of 14
action should be directed at the insurer who issued his policy, Provident Life and Accident 

Insurance Company. 

B. Mere Corporate Relationship Between UnumProvident Corporation and 

Provident Life and Accident Insurance Company is Irrelevant 

As Ms. Roth states in her Affidavit, Provident Life and Accident Insurance Company is 

an indirect subsidiary of UnumProvident Corporation. Provident Life and Accident Insurance 

Company maintains a separate corporate identity distinct from its parent. See Affidavit of Susan

Roth attached hereto as Exhibit “B”. Such relationship is insufficient to confer any liability upon 

UnumProvident for Provident’s conduct regarding plaintiff’s claim for disability benefits under 

his policy. 

It is well-settled under Pennsylvania law that a parent corporation and a wholly-owned 

subsidiary are “recognized as separate and distinct legal entities.” Shared Communications

Services v. Bell Atlantic Properties, 692 A.2d 570, 573 (Pa. Super. Ct. 1997); Commonwealth v.

Vienna Health Products, 726 A.2d 432, 434 (Pa. Commw. Ct. 1999) (“The general rule in 

Pennsylvania is that a corporation is to be treated as a separate and independent entity even if its 

stock is owned entirely by one person.”); Clark v. Matsushita Electric Co., 811 F. Supp. 1061, 

1067 (M.D. Pa. 1993) (“subsidiaries, even if wholly-owned, are presumed separate and distinct 

entities from their parent corporations.”); Everitt v. Dover Downs Entertainment, Inc., 1999 U.S. 

Dist. LEXIS 8525, *11 (E.D. Pa. 1999) (“The general rule is that a corporation shall be regarded

as an independent entity even if its stock is owned entirely by one person.”). 

Accordingly, the fact that UnumProvident Corporation indirectly owns Provident Life 

and Accident Insurance Company does not allow plaintiff to bring claims against 

UnumProvident Corporation as though they were simply one and the same. Provident Life and 

Accident Insurance Company is in good standing and is an operating insurance company 

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 9 of 14
licensed to sell insurance products in Pennsylvania. See Affidavit of Susan Roth attached hereto 

as Exhibit “B”. Furthermore, UnumProvident Corporation has never assumed any liability for 

insurance policies issued by Provident Life and Accident Insurance Company or for claims under 

said policies. See Affidavit of Susan Roth attached hereto as Exhibit “B”. Thus, the proper 

defendant in this case is Provident Life and Accident Insurance Company, the legal entity which

issued plaintiff’s insurance contract. Any legal obligations arising out of the insurance contract 

lies with Provident. 

III. COUNT III (BREACH OF FIDUCIARY DUTY) SHOULD BE DISMISSED AS 

UNTENABLE UNDER PENNSYLVANIA LAW

Count III of plaintiff’s complaint alleges a breach of fiduciary duty claim against 

defendant. Under Pennsylvania law, such a claim does not exist in the first-party insurance

context. For example, in Keefe v. Prudential Ins. Co., 203 F.3d 218 (3d Cir. 2000), the Third 

Circuit recently observed that “[u]nder Pennsylvania law, a fiduciary duty higher than the duty of 

good faith and fair dealing does not arise out of an insurance contract until an insurer asserts a 

stated right under the policy to handle all claims asserted against the insured.” Id. at 227-28. 

Similarly, in Connecticut Indem. Co. v. Markman, 1993 U.S. Dist. LEXIS 10853 (E.D. 

Pa. 1993), the court was faced with a motion to dismiss a breach of fiduciary duty claim against 

the insurer. In dismissing the claim, the court reasoned that “Under Pennsylvania law, an insurer 

assumes a fiduciary duty in limited circumstances. . . .an insurer only assumes a fiduciary duty 

when it asserts a stated right under the policy to handle all claims brought against the insured.” 

Id. at *17, *19; Belmont Holdings Corp. v. Unicare Life & Health Ins. Co., 1999 U.S. Dist. 

LEXIS 1802, *10-11 (E.D. Pa. 1999) (same and citing additional cases). 

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 10 of 14
In other words, a fiduciary duty owed by an insurer to an insured only arises in the 

context of third party liability insurance. The case at bar is not such a case. Therefore, Count III 

should be dismissed. 

IV. COUNT VI (FRAUD) SHOULD BE DISMISSED AS UNTENABLE UNDER 

PENNSYLVANIA LAW

Count VI of plaintiff’s complaint alleges a claim of fraudulent inducement against 

defendant. Specifically, plaintiff alleges that “Plaintiff was induced to purchase” his policy with 

fraudulent representations made by defendant. See paragraphs 34-35 of plaintiff’s complaint.

Aside from such allegations being entirely baseless and untrue, such a claim is not tenable under 

Pennsylvania law. 

Plaintiff’s insurance policy, attached hereto as Exhibit “A”, contains an entire 

contract/integration clause on page 16. Said clause reads as follows: 

ENTIRE CONTRACT

This policy with the application and attached papers is the entire contract between 

you and us. . . .No agent may change this policy or waive any of its provisions. 

Such a clause, in conjunction with the parol evidence rule, bars claims of fraudulent inducement 

under Pennsylvania law. A recent case containing an extensive discussion of this issue is 

Titelman v. Rite Aid Corp., 2001 U.S. Dist. LEXIS 24049 (E.D. Pa. 2001). In Titelman the 

court, based on an entire contract/integration clause and Pennsylvania’s parol evidence rule, 

dismissed plaintiff’s claim that he was fraudulently induced to enter an employment agreement 

with Rite Aid Corporation. The court reasoned that any evidence of any allegedly fraudulent 

representations was barred. 

The employment contract at issue stated that “This Agreement constitutes the entire

agreement among the parties with respect to the matters herein provided.” Id. at *4-5. The 

Titelman court began its analysis by noting that the Third Circuit has established that under 

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Pennsylvania law entire contract/integration clauses, when read in conjunction with 

Pennsylvania’s parol evidence rule, bar consideration or prior representations, even those alleged

to be fraudulent, concerning matters covered in the written contract. Id. at *9 (citing cases). 

Thus, in such circumstances, claims of fraudulent inducement are barred. Id. The court then

discussed several Pennsylvania cases which, based on an integration clause and the parol 

evidence rule, barred claims of fraudulent inducement. Id. at *10-14 (citing cases). Based on 

these cases, the Titelman court reasoned as follows: 

The analysis of these cases makes sense. One of the assumptions 

underlying the parol evidence rule is that ‘parties logically will insist on the 

inclusion of all matters material or important to them in any integrated contract.’

There is no sound reason to allow a fraud in the inducement claim to go forward 

when the plaintiff alleges that he relied on allegedly fraudulent statements that he 

did not insist be included in the final written contract. Pennsylvania’s parol 

evidence rule ‘seeks to protect parties from fraudulent inducement claims which 

could have been prevented by more complete, more thorough contract formation.’ 

Id. at *15 (citations omitted). 

Accordingly, pursuant to Titelman and the authority discussed therein, plaintiff’s claim of 

fraudulent inducement (Count VI) should be dismissed. 

V. COUNT VII (DECLARATORY JUDGMENT OF PERMANENT DISABILITY 

AND ENTITLEMENT TO DISABILITY PAYMENTS FOR LIFE) SHOULD BE

DISMISSED AS UNTENABLE UNDER PENNSYLVANIA LAW

In Count VII plaintiff requests a declaratory judgment that he is “permanently disabled 

within the meaning of the policy and thus is entitled to payments for life.” See paragraph 41 of 

plaintiff’s complaint. Such a cause of action/remedy is unavailable under Pennsylvania law. It 

is well-settled under Pennsylvania law that an insured who brings suit under a disability 

insurance policy is only entitled to recover past benefits denied (not future, unaccrued benefits) 

calculated from the date of the claim denial through the filing of suit. See, e.g., Summers v. 

Prudential Ins. Co., 179 A. 78, 79 (Pa. 1935); Doe v. Provident Life & Accident Ins. Co., 936 F. 

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Supp. 302, 306-07 (E.D. Pa. 1996) (citing Pennsylvania cases); Hilley v. Massachusetts Mut.

Life Ins. Co., 32 F. Supp.2d 195, 197 n3 (E.D. Pa. 1998). Accordingly, Count VII should be

dismissed. 

VI. COUNT VIII (PUNITIVE DAMAGES) SHOULD BE DISMISSED AS 

UNTENABLE UNDER PENNSYLVANIA LAW

In Count VIII plaintiff alleges an independent cause of action for “Punitive Damages.” 

This count should be dismissed because there is no independent cause of action for punitive

damages under Pennsylvania law. See, e.g., Baram v. Farugia, 606 F.2d 42, 46 (3d Cir. 1979) 

(“under Pennsylvania law the right to punitive damages is a mere incident to a cause of action 

and not the subject of an action in itself.”); Winterberg v. CNA Ins. Co., 868 F. Supp. 713, 725 

n20 (E.D. Pa. 1994) (“a request for punitive damages is not a cause of action in and of itself”); 

Peer v. Minnesota Mut. Fire & Casualty Co., 1993 U.S. Dist. LEXIS 18008, *16 (E.D. Pa. 1993) 

(“There is no independent cause of action for punitive damages under Pennsylvania law.”). 

Accordingly, Count VIII should be dismissed. 

WHEREFORE, defendant requests an Order in the form proposed. 

DATE: __________ 

POST & SHELL, P.C.

BY:

RICHARD L. MCMONIGLE, ESQUIRE 

STEVEN J. SCHILDT, ESQUIRE 

ATTORNEYS FOR DEFENDANT 

1800 JFK Boulevard, 19th Floor 

Philadelphia, PA 19103 

(215) 587-1089 

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Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 13 of 14
11

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of defendant’s Motion to Dismiss and 

supporting Brief were sent via first class mail to the following individuals on 

____________________: 

Bentley M. Saul, Esquire 

Fourth Floor 

1601 Walnut Street 

Philadelphia, PA 19102 

Vincent F. Presto, Esquire 

Suite 16 

124 Chestnut Street 

Philadelphia, PA 19106 

POST & SHELL, P.C. 

BY: 

STEVEN J. SCHILDT, ESQUIRE 

ATTORNEY FOR DEFENDANT 

Case 2:02-cv-04468-MK Document 4 Filed 07/11/2002 Page 14 of 14