1

 Defendant State Farm notes in the instant motion to dismiss that the caption

for the case improperly refers to the defendant as “t/d/b/a State Farm Insurance

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

JASON RICE and :

STEPHANIE RICE, :

: Civil Action No. 4: 10-CV-1280

Plaintiffs, :

: (Judge McClure)

v. :

:

STATE FARM FIRE AND :

CASUALTY COMPANY, :

t/d/b/a/ STATE FARM :

INSURANCE COMPANIES, :

:

Defendant. :

MEMORANDUM

August 25, 2010

I. BACKGROUND

On April 30, 2010, the plaintiffs, Jason Rice and Stephanie Rice, filed a

four-count complaint in the Court of Common Pleas of Snyder County. (Rec. Doc.

No. 1, Exhbt. A). As of the date of the filing of the complaint, plaintiffs resided in

Selinsgrove, Snyder County, Pennsylvania. Id. at 1. The defendant named in the

complaint is State Farm Fire and Casualty Company t/d/b/a State Farm Insurance

Companies (“State Farm”), a company that does business in Pennsylvania but has a

principal place of business in Bloomington, Illinois. Id.

1

 This action was

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 1 of 16
Companies.” (See Rec. Doc. No. 5 at 1). If the parties so agree, they may file a

stipulation of counsel to amend the caption.

2 The instant matter was properly removed to this court pursuant to 28

U.S.C. § 1441(a), as this court has original jurisdiction, based upon diversity,

pursuant to 28 U.S.C. § 1332(a)(1): the amount in controversy exceeds $75,000,

and the parties involved are citizens of different states, as the plaintiffs are citizens

of Pennsylvania, and the defendant is a citizen of Illinois. In addition, removal is

appropriate as the defendant has filed notice of removal within thirty days of the

date on which it received service of the complaint. See 28 U.S.C. § 1446(b).

3

 Included in Count I of the plaintiffs’ complaint is a request for damages

that include, inter alia, “[s]ubstantial legal costs.” Id. at 5.

2

removed to the United States District Court for the Middle District of Pennsylvania

upon the defendant’s notice of removal, filed with this court on June 18, 2010. 

This court has proper jurisdiction based upon diversity of citizenship.2

In their complaint, plaintiffs seek to recover damages they say they incurred

as a result of a fire at their home in Selinsgrove, Pennsylvania. Count I of the

plaintiffs’ complaint is a breach of contract claim, based upon a contract of

insurance the plaintiffs claim they entered into with the defendant. (Rec. Doc. No.

1, Exhbt. A at 4-5).3

 Count II of the complaint is an action for bad faith in

violation of 42 Pa.C.S. § 8731, et seq. Id. at 5-7. In Count III of the complaint,

plaintiffs allege that State Farm “has acted in bad faith and breached its contractual

and fiduciary duties owed to the Plaintiffs . . . .” Id. at 7-9. Finally, in Count IV,

plaintiffs contend that the defendant violated the Unfair Trade Practices and

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Consumer Protection Law (“UTPCPL”), 73 P.S. § 201-1, et seq., “by engaging in

unfair or deceptive acts or practices . . . .” Id. at 9-10.

II. PROCEDURAL HISTORY

On June 25, 2010, defendant State Farm filed a Motion to Dismiss Plaintiffs’

Complaint pursuant to Fed. R. Civ. P. 12(b)(6). (Rec. Doc. No. 4). With this

motion, the defendant seeks to dismiss Counts II, III, and IV of the plaintiffs’

complaint for failure to state a claim upon which relief can be granted. On July 9,

2010, State Farm filed a brief in support of its motion to dismiss. (Rec. Doc. No.

5). In addition to providing support for its contention that Counts II, III, and IV of

the complaint should be dismissed, State Farm also argues that the plaintiffs’

demand for attorneys’ fees in Count I should be stricken, as plaintiffs are not

entitled to such fees in a breach of contract action.

Plaintiffs did not file a brief in opposition within the time period as required

by Middle District Local Rule 7.6. That rule states that “[a]ny party who fails to

comply with this rule shall be deemed not to oppose such motion.” Local Rule 7.6. 

However, as granting the motion at issue would dispose of a number of the

plaintiffs’ claims, we allowed the plaintiffs until August 9, 2010, in which to file

an opposition brief to the defendant’s motion to dismiss. (Rec. Doc. No. 8). As of

the date of this order, the plaintiffs have yet to file any brief in opposition.

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 3 of 16
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Now, in light of the following, we will grant the defendant’s motion to

dismiss to the extent that the defendant seeks the dismissal of Count III of the

complaint and the plaintiffs’ request for legal costs in Count I. We will deny the

motion to the extent that the defendant seeks the dismissal of Count II and IV of

the plaintiffs’ complaint.

III. STANDARD OF REVIEW

When considering a motion to dismiss under Federal Rule of Civil

Procedure 12(b)(6), the court must view all allegations stated in the complaint as

true and construe all inferences in the light most favorable to plaintiff. Hishon v.

King & Spaulding, 467 U.S. 69, 73 (1984); Kost v. Kozakiewicz, 1 F.3d 176, 183

(3d Cir. 1993). “The tenet that a court must accept as true all of the [factual]

allegations contained in the complaint is inapplicable to legal conclusions.” 

Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (internal citations omitted). In

ruling on such a motion, the court primarily considers the allegations of the

pleading, but is not required to consider legal conclusions alleged in the complaint. 

Kost, 1 F.3d at 183. “Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.” Iqbal, 129 S.Ct. at

1949. At the motion to dismiss stage, the court considers whether plaintiff is

entitled to offer evidence to support the allegations in the complaint. Maio v.

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5

Aetna, Inc., 221 F.3d 472, 482 (3d Cir. 2000). 

A complaint should only be dismissed if, accepting as true all of the

allegations in the complaint, plaintiff has not pled enough facts to state a claim to

relief that is plausible on its face. Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955,

1960 (2007). “Determining whether a complaint states a plausible claim for relief

will . . . be a context-specific task that requires the reviewing court to draw on its

judicial experience and common sense.” Iqbal, 129 S.Ct. at 1950. In considering a

Rule 12(b)(6) motion, we must be mindful that federal courts require notice

pleading, as opposed to the heightened standard of fact pleading. Hellmann v.

Kercher, 2008 U.S. Dist. LEXIS 54882, 4 (W.D. Pa. 2008). Federal Rule of Civil

Procedure 8 "'requires only a short and plain statement of the claim showing that

the pleader is entitled to relief,' in order to 'give the defendant fair notice of what

the . . . claim is and the grounds on which it rests,'" Bell Atlantic Corp. v.

Twombly, 127 S.Ct. 1955, 1964, (2007) (citing Conley v. Gibson, 355 U.S. 41, 47,

78 S. Ct. 99, (1957)). However, even under this lower notice pleading standard, a

plaintiff must do more than recite the elements of a cause of action, and then make

a blanket assertion of an entitlement to relief under it. Hellmann, 2008 U.S. Dist.

LEXIS at 4-5. Instead, a plaintiff must make a factual showing of his entitlement

to relief by alleging sufficient facts that, when taken as true, suggest the required

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elements of a particular legal theory. Twombly, 127 S.Ct. at 1965. “[W]here the

well-pleaded facts do not permit the court to infer more than the mere possibility of

misconduct, the complaint has alleged - - but it has not “shown” - - “that the

pleader is entitled to relief.” Iqbal, 129 S.Ct. at 1950, citing Fed. R. Civ. P. 8(a). 

The failure-to-state-a-claim standard of Rule 12(b)(6) “streamlines litigation

by dispensing with needless discovery and factfinding.” Neitzke v. Williams, 490

U.S. 319, 326-27 (1989). A court may dismiss a claim under Rule 12(b)(6) where

there is a “dispositive issue of law.” Id. at 326. If it is beyond a doubt that the

non-moving party can prove no set of facts in support of its allegations, then a

claim must be dismissed “without regard to whether it is based on an outlandish

legal theory or on a close but ultimately unavailing one.” Id. at 327.

IV. ALLEGATIONS IN THE COMPLAINT

The material facts as contained in the complaint are as follows. Plaintiffs

Jason Rice and Stephanie Rice were at all times relevant to the instant action the

owners of a property located at 1253 North Old Trail, Selinsgrove, Snyder County,

Pennsylvania. (Rec. Doc. No. 1, Exhbt. A at 2). At all times relevant to this suit,

defendant State Farm provided Mr. and Mrs. Rice with insurance coverage for this

property under Policy No. 78-PT-6539-2. This policy provided coverage for the

dwelling located at 1253 North Old Trail, as well as the personal property located

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 6 of 16
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in the dwelling, and the plaintiffs paid a premium for such coverage. Id. at 3.

On or about September 19, 2009, a fire broke out in the plaintiffs’ residence

which caused fire, smoke, and water damage to the dwelling and the plaintiffs’

personal property located in the dwelling. The Pennsylvania State Police Fire

Marshall ruled the fire as undetermined. Id.

Since September 19, 2009, the plaintiffs have been displaced from their

residence. Although plaintiffs have demanded payment for the losses they have

incurred, defendant State Farm has failed to make any such payments. As a result

of this failure, a Complaint in Mortgage Foreclosure was served upon the plaintiffs

on April 27, 2010. Id. at 3. Plaintiffs claim that, “[d]espite [their] repeated

demands and more than reasonable period for investigation, the Defendant has

failed to confirm or deny Plaintiffs’ claims relative to the above-referenced fire, to

date.” Id. at 4.

V. DISCUSSION

A. Count II - Bad Faith Claim

 Pursuant to 42 Pa.C.S. § 8731, Pennsylvania’s bad faith statute:

In an action arising under an insurance policy, if the court finds that

the insurer has acted in bad faith toward the insured, the court may

take all of the following actions:

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(1) Award interest on the amount of the claim from the date

the claim was made by the insured in an amount equal to

the prime rate of interest plus 3%.

 (2) Award punitive damages against the insurer.

 (3) Assess court costs and attorney fees against the insurer.

42 Pa.C.S. § 8731. As the defendant notes, there are two elements that must be

made out by a plaintiff seeking recovery for the denial of insurance coverage under

the bad faith statute. The Pennsylvania Superior Court, in the seminal case

concerning § 8731, defined bad faith as “any frivolous or unfounded refusal to pay

proceeds of a policy” and stated that “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.” Terletsky v. Prudential Prop. & cas. Ins. Co., 649 A.2d 680, 689 (Pa. Super.

Ct. 1994) (quoting Black’s Law Dictionary 139 (6th ed. 1990)). To succeed on a

bad faith claim, “the plaintiff must show that the defendant did not have a

reasonable basis for denying benefits under the policy and that defendant knew or

recklessly disregarded its lack of reasonable basis in denying the claim.” Id.

(citing American Franklin Life Insurance Company v. Galati, 776 F. Supp. 1054,

1064 (E.D.Pa. 1991)). In addition, a claim of bad faith must be proven by clear

and convincing evidence; mere insinuation is not enough. Id.; see also Polselli v.

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 8 of 16
4 For example, plaintiffs allege that State Farm “has unreasonably delayed,

and continues to unreasonably delay,” in paying plaintiffs for their loss; that there

was and is no reasonable basis for such denial; and that State Farm has acted “with

ill will, malicious intent and self-motive” in its handling of the plaintiffs’ claims. 

(Rec. Doc. No. 1, Exhbt. A at 5-6). Plaintiffs similarly allege that State Farm

engaged in unreasonable and bad faith investigative practices in handling the

plaintiffs’ claims; subjected Mr. and Mrs. Rice “to harassment, inconvenience and

embarrassment”; and “intentionally, maliciously, fraudulently and recklessly

engag[ed] in a course of conduct to deprive [them] of benefits . . . .” Id. at 7.

9

Nationwide Mutual Fire Insurance Co., 126 F.3d 524, 528 (3d Cir. 1997).

We cannot agree with defendant State Farm that the plaintiffs have failed to

properly allege a claim sounding in bad faith. In support of its motion to dismiss,

State Farm contends that “Count II contains boilerplate allegations of bad faith and

unsubstantiated conclusions of law.” (Rec. Doc. No. 5 at 5). In addition, State

Farm alleges that “[t]here is no evidence that State Farm acted in bad faith . . . .” 

Id. Of course, for the purposes of deciding a motion to dismiss, the court cannot

look to the evidence that might prove or disprove the plaintiffs’ case; instead, the

court must decide “whether a complaint states a plausible claim for relief . . . .” 

Iqbal, 129 S.Ct. at 1950. Here, we believe that plaintiffs have stated a plausible

claim for relief under the bad faith statute. Plaintiffs have outlined a number of

examples of how the defendant has violated § 8731,4

 and whether the plaintiffs will

be able to prove such violations by clear and convincing evidence is a question that

cannot be addressed by this court at the present time.

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 9 of 16
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In light of the above, we will deny defendant State Farm’s motion to dismiss

Count II for failure to state a claim under Pennsylvania law.

B. Count III - Breach of Duty of Good Faith and Fair Dealing Claim

State Farm contends that Count III should be dismissed, as it appears to

combine the plaintiffs’ claims for breach of contract and bad faith that are

contained in Counts I and II. Id. at 5-6. We agree with the defendant that Count

III is redundant and unnecessary, especially in light of our denial of the

defendant’s motion to dismiss Count II of the plaintiffs’ complaint.

Therefore, we will grant defendant State Farm’s motion to dismiss Count III

of the plaintiffs’ complaint for failure to state a claim under Pennsylvania law.

C. Count IV - Unfair Trade Practices and Consumer Protection Law Claim

The UTPCPL prohibits the use of “unfair methods of competition” and

unfair or deceptive acts or practices” involved in a transaction between the parties

that constitutes “trade or commerce.” See 73 P.S. § 201-3. A wide range of

activities constitute “unfair or deceptive acts or practices.” See 73 P.S. § 201-

2(4)(I)-(xxi). Plaintiffs allege that the defendant violated the UTPCPL “by

engaging in unfair or deceptive acts or practices in general,” as well as:

(a) By engaging in negligent, reckless and/or intentional

conduct by failing to properly pay benefits they knew were due and

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 10 of 16
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owing;

(b) By engaging in conduct causing the likelihood of confusion

and/or misunderstanding regarding the payments of premiums and

cancellation of the insurance policy; [and]

(c) By failing to comply with terms of the policy and written

warranties and guarantees in the policy.

(Rec. Doc. No. 1, Exhbt. A at 9). A private party can bring an action pursuant to §

201-9.2, which states, in pertinent part, that “[a]ny person who purchases or leases

goods or services primarily for personal, family or household purposes and thereby

suffers any ascertainable loss of money or property, real or personal, as a result of

the use or employment by any person of a method, act or practice declared

unlawful by section 3 of this act, may bring a private action . . . .” 

The plaintiffs do not specifically state which subsections of the UTPCPL

they believe the defendant has violated. The defendant contends that the plaintiffs’

UTPCPL claim should be dismissed as it only alleges nonfeasance on the part of

the defendant, and simple nonfeasance cannot form the basis for an action under

the UTPCPL. (Rec. Doc. No. 5 at 7) (“A fair reading of the Complaint leads to the

inescapable conclusion that State Farm is being accused of nonfeasance – failing to

pay Plaintiffs’ insurance claim.”).

The Court of Appeals for the Third Circuit has held “that ‘[i]n Pennsylvania,

only malfeasance, the improper performance of a contractual obligation, raises a

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cause of action under the [UTPCPL], and an insurer's mere refusal to pay a claim

which constitutes nonfeasance, the failure to perform a contractual duty, is not

actionable.’” Gardner v. State Farm Fire & Cas. Co., 544 F.3d 553, 564 (3d Cir.

2008) (quoting Horowitz v. Fed. Kemper Life Assur. Co., 57 F.3d 300, 307 (3d

Cir. 1995)). We agree with the defendant that the plaintiffs allege that State Farm

has not paid benefits allegedly owed under an insurance contract and that this

“failure to perform a contractual duty” is typically considered to be nonfeasance. 

However, we believe that, at this stage of the litigation, the plaintiffs have

sufficiently alleged that the defendant has gone beyond nonfeasance, alleging that

State Farm has engaged in conduct it knew was improper and that would cause the

likelihood of confusion or misunderstanding concerning, for example, premium

payments. See, e.g., Zaloga v. Provident Life & Accident Ins. Co. of Am., 671 F.

Supp. 2d 623, 633 (M.D. Pa. 2009) (Kosik, J.) (denying the defendant insurance

company’s motion to dismiss the plaintiff’s UTPCPL claim for alleging merely

nonfeasance because “the facts alleged by [the plaintiff] go beyond black or white

performance and inject the question of the propriety of Defendants' behavior in

performing their duty”). In any event, we do not believe it prudent at this stage of

the proceedings to dismiss the plaintiffs’ UTPCPL claim. See Lites v. Great Am.

Ins. Co., 2000 U.S. Dist. LEXIS 9036, *14 (E.D. Pa. June 23, 2000) (following an

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extensive review of the differences between the motion to dismiss and summary

judgment standards in UTPCPL actions, the district court concluded that, though

the defendant contended “that the entire complaint allege[d] nothing more than a

mere failure to perform and not impropriety in fulfilling its contractual

obligations[,] . . . [a] closer examination of the complaint reveal[ed] the contrary”).

As Judge Kosik noted in Zaloga, “it is plausible to view these facts in the

light most favorable to [the plaintiffs] and conclude that [the defendant]

misperformed [its] obligation to [the plaintiff] rather than failed to perform it.” 

Zaloga, 671 F. Supp. 2d at 633. As such, we will deny State Farm’s motion to

dismiss Count IV of the plaintiffs’ complaint.

D. Count I - Attorneys’ Fees and Costs Demand

Finally, defendant State Farm asks that this court strike the plaintiffs’

request in Count I of the complaint for “substantial legal costs.” (Rec. Doc. No. 1,

Exhbt. A at 4). A plaintiff may not recover attorneys’ fees from the opposing party

in an action “in the absence of express statutory allowance of the same, or clear

agreement by the parties, or some other established exception.” Chatham

Communications, Inc. v. General Press Corp., 463 Pa. 292, 301 (1975) (quoting

Corace v. Balint, et al., 210 A.2d 882, 886-87 (Pa. 1965)) (internal citations

omitted). Here, there is no express statutory basis for an award of attorneys’ fees

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 13 of 16
14

on plaintiffs’ breach of contract claim, and the plaintiffs have not alleged an

agreement between the parties or another established exception providing for such

an award on this claim. Therefore, we will grant defendant State Farm’s motion to

strike the plaintiffs’ request, in Count I of the complaint, for legal costs.

VI. CONCLUSION

Based on the foregoing, we will grant defendant State Farm’s motion to

dismiss in part and deny it in part. To the extent that the defendant seeks the

dismissal of Counts II and IV of the plaintiffs’ complaint, the motion will be

denied. In addition, we will grant the defendant’s motion to dismiss to the extent

that the defendant seeks the dismissal of Count III of the complaint and to strike

plaintiffs’ request, in Count I, for legal costs based upon the breach of contract

action. An appropriate order follows.

 s/ James F. McClure, Jr. 

James F. McClure, Jr.

United States District Judge

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

JASON RICE and :

STEPHANIE RICE, :

: Civil Action No. 4: 10-CV-1280

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 14 of 16
15

Plaintiffs, :

: (Judge McClure)

v. :

:

STATE FARM FIRE AND :

CASUALTY COMPANY, :

t/d/b/a/ STATE FARM :

INSURANCE COMPANIES, :

:

Defendant. :

ORDER

August 25, 2010

For the reasons set forth in the accompanying memorandum, IT IS

HEREBY ORDERED THAT:

1. Defendant State Farm’s motion to dismiss Count III of the plaintiffs’

complaint and to strike the plaintiffs’ request, in Count I, for legal

costs based upon the breach of contract action is GRANTED. (Rec.

Doc. No. 4).

2. Defendant State Farm’s motion to dismiss Counts II and IV of the

plaintiffs’ complaint is DENIED. (Rec. Doc. No. 4).

3. Defendant is directed to file an answer to Counts I, II and IV of the

complaint on or before September 15, 2010.

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 15 of 16
16

 s/ James F. McClure, Jr. 

James F. McClure, Jr.

United States District Judge

Case 4:10-cv-01280-JFM Document 9 Filed 08/25/10 Page 16 of 16