author: NICHOLAS, J.,

text:
    Wiedinmyer v. Harleysville Mutual Insurance Co.

      C.P. of Montgomery County,
    no. 94-19450.

      Patrick McMenamin Jr., for plaintiff.

      James C. Haggerty and Scott J. Tredwell, for defendant.
    August 5, 1999
   NICHOLAS, J.,

This opinion is necessitated by plaintiff’s appeal to the Superior Court of Pennsylvania from our order dated June 4, 1999, granting defendant’s motion for summary judgment.

Plaintiff, Karen Wiedinmyer, is the administratrix of the estate of Micah C. Wiedinmyer, who died on May 29, 1993, as the result of injuries sustained in a two-vehicle automobile accident which also claimed the lives of four other people. Defendant, Harleysville Mutual Insurance Company, is an insurance carrier which issued a policy for automobile insurance to one Benjamin Griscom which was in effect at the time of the accident and which provided underinsured motorist coverage in accordance with 75 Pa.C.S. §1701 et seq.

Plaintiff filed her complaint in this action on October 4, 1994. In her complaint, plaintiff seeks damages for defendant’s alleged bad faith handling of an underinsured motorist claim made by plaintiff upon the insurance policy issued to Mr. Griscom. Plaintiff alleges that demand was made upon defendant for payment on January 13,1994, and that defendant failed to make a timely payment, despite knowledge of the claim’s legitimacy. Plaintiff further alleges that defendant acted in bad faith by failing to reasonably investigate and process plaintiff’s claim and by not attempting to negotiate an equitable settlement of plaintiff’s claim.

On February 14, 1995, defendant filed its motion for summary judgment, contending that, at most, plaintiff’s complaint alleges that defendant was negligent in handling plaintiff’s underinsured motorist claim and that mere negligence by an insurer is not actionable pursuant to 42 Pa.C.S. §8371. Defendant contends that any apparent delay in processing plaintiff’s claim upon the insurance policy issued to Mr. Griscom is readily explained by the fact that plaintiff was not the only party making claim to the proceeds of this policy. Mr. Griscom’s policy contained a single limit of $300,000 in underinsured motorist benefits. In addition to plaintiff’s claim upon this policy, a claim was also made by the estate of Sean Rocks, another individual killed in the accident. Defendant contends that these rival claims required investigation and negotiation and that neither claim could be settled without taking into account the rights of the other claimant. Defendant avers — and plaintiff admits — that payment ultimately was made upon Mr. Griscom’s policy, with plaintiff and the estate of Sean Rocks receiving equal $150,000 shares of the $300,000 policy benefits.

On September 11,1996, defendant’s motion for summary judgment came on for oral argument before the undersigned. By order dated September 13, 1996, disposition of defendant’s motion was deferred pending further development of the record. Upon agreement of the parties, counsel were directed to submit to the court, within 10 days, an agreed stipulation of facts to assist the court in making its determination. The court’s order further provided that:

“In the event either party believes that even after the stipulated facts, depositions may be required to further develop the record sufficiently for the court to rule on the defendant’s motion for summary judgment, such party is to advise the court of the nature of the disputed fact and the identity of the person or persons to be deposed with respect thereto.”

Following our order of September 13,1996, this case engendered no further docket activity until October 29, 1998, when an active status certification was filed in response to a notice to teminate issued pursuant to Montgomery County Local Rule 406.

On March 11, 1999, the parties filed a sipulation of facts, consisting of correspondence related to plaintiff’s claim. Neither party made any request to conduct depositions to further develop the record as provided for in our order dated September 13, 1996.

Defendant’s motion for summary judgment came on for oral argument before the undersigned for the second time on May 4, 1999. Upon careful consideration of the motion, plaintiff’s response thereto, the briefs of counsel, and the stipulation of facts, the court granted defendant’s motion for summary judgment by order dated June 4, 1999.

Plaintiff filed her notice of appeal to the Superior Court of Pennsylvania on June 28, 1999. By order dated July 9, 1999, plaintiff was directed to provide this court with a concise statement of the matters complained of on appeal, pursuant to Pa.R.A.P. 1925(b). Plaintiff’s concise statement was received on July 22, 1999.

In her concise statement, plaintiff contends:

“(1) The trial court erred in its determination that no genuine issue of any material fact existed, as to a necessary element of the cause of action under 42 Pa.C.S. §8371.
“(2) The trial court erred in its determination that, as a matter of law, no reasonable jury could find that the stipulation of facts establishes, by clear and convincing evidence, bad faith pursuant to 42 Pa.C.S. §8371, with regard to plaintiff’s underinsured motorist claim.”

We see no merit to plaintiff’s contentions of error.

We note first the standards governing an award of summary judgment. Pa.R.C.P. 1035.2 provides that summary judgment may be granted:

“(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or
“(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.”

Discovery in the instant case was completed upon the filing with this court of the parties’ stipulation of facts without any request for further depositions. Our review of this stipulation convinced the court that plaintiff had failed, as a matter of law, to offer sufficient evidence for a reasonable jury to conclude that defendant acted in bad faith with regard to its handling of plaintiff’s underinsured motorist claim. In reaching this conclusion, this court did not make any factual determination as to the truth of plaintiff’s allegations. This court, rather, made a legal determination that the record reveals no genuine issue of material fact as to which a factual determination need be made. Boring v. Erie Insurance Group, 434 Pa. Super. 40, 641 A.2d 1189 (1994). While the party requesting that summary judgment be entered in its favor has the initial burden of demonstrating that no genuine issue of material fact exists, First Wisconsin Trust Co. v. Strausser, 439 Pa. Super. 192, 653 A.2d 688 (1995), the non-moving party may not avoid summary judgment where it produces no evidence to support an issue on which it bears the burden of proof. Ertel v. Patriot-News Co., 544 Pa. 93, 674 A.2d 1038 (1996), cert. denied, 117 S.Ct. 512, 136 L.Ed.2d 401.

Plaintiff brought this action pursuant to 42 Pa.C.S. §8371, which provides:

“In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions:
“(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate plus 3 percent.
“(2) Award punitive damages against the insurer.
“(3) Assess court costs and attorney fees against the insurer.”

While 42 Pa.C.S. §8371 does not define the term “bad faith,” our Superior Court has identified bad faith on the part of an insurer as: “any frivolous or unfounded refusal to pay proceeds of a policy; it is not necessary that such refusal be fraudulent. For purposes of an action against an insurer for failure to pay a claim, such conduct imports a dishonest purpose and means a breach of a known duty (i.e., good faith and fair dealing), through some motive of self-interest or ill will; mere negligence or bad judgment is not bad faith.” Romano v. Nationwide Mutual Fire Insurance Co., 435 Pa. Super. 545, 553, 646 A.2d 1228, 1232 (1994) (citing Black’s Law Dictionary, 139, 6th ed. 1990).

Where an insured accuses an insurer of bad faith in its handling of a claim, the burden is on the insured to demonstrate that the insurer had no reasonable basis for its actions and that the insurer either knew or recklessly disregarded its lack of a reasonable basis for handling the insured’s claim as it did. See e.g., MGA Insurance Co. v. Bakos, 699 A.2d 751, 754 (Pa. Super. 1997); Terletsky v. Prudential Property and Casualty Insurance Co., 437 Pa. Super. 108, 649 A.2d 680 (1994), appeal denied, 540 Pa. 641, 659 A. 2d 560 (1995). Further, the evidence offered to prove such bad faith on the part of an insurer must be “clear and convincing.” See e.g., O’Donnell v. Allstate Insurance Company, 1999 Pa. Super. 161; MGA Insurance Co., supra; Quaciari v. Allstate Insurance Co., 998 F. Supp. 578 (E.D. Pa. 1998). Bad faith on the part of an insurer may not be “merely insinuated.” See e.g., Terletsky, supra at 125, 649 A.2d at 688. Where a plaintiff fails to offer clear and convincing evidence of bad faith, plaintiff’s claim is properly withheld from the jury. See e.g., Quaciari, supra and O’Donnell, supra, to wit:

“As a matter of law, the evidence presented by appellant of Allstate’s conduct during the course of litigation does not constitute bad faith and, therefore, such evidence was properly excluded from the jury’s consideration.” O’Donnell, supra, 1999 Pa. Super. 161, 6.

The O’Donnell court cited with approval Jung v. Nationwide Mutual Fire Insurance Co., 949 F. Supp. 353, 360 (E.D. Pa. 1997), where the court, in granting plaintiff’s motion for summary judgment, held that, in the absence of evidence revealing a dishonest purpose, it is not bad faith for an insurer to aggressively investigate an insured’s claim in order to protect its own interests.

Thus, summary judgment is properly entered against a plaintiff where that plaintiff alleges bad faith on the part of its insurer but fails to present sufficient evidence for a reasonable jury to find by clear and convincing evidence that plaintiff’s insurer acted in bad faith. O’Donnell, supra, 1999 Pa. Super. 161, 9; Quaciari, supra; Jung, supra.

In the instant case, plaintiff’s complaint and her briefs in opposition to defendant’s motion for summary judgment insinuate bad faith on the part of defendant, but nowhere in the record does plaintiff offer clear and convincing evidence that defendant acted in bad faith. Nowhere in the stipulation of facts — or elsewhere in the record — is there evidence that defendant handled plaintiff’s claim with dishonest purpose or ill will. Not only does the stipulation of facts fail to offer evidence that defendant had no reasonable basis for the manner in which it handled plaintiff’s claim, the stipulation in fact supports defendant’s contention that the apparent delays in processing plaintiff’s claim resulted largely from the need to collect documentation from multiple parties and the need to coordinate settlement between two parties making claims upon the same single limit policy. While these delays might arguably be at least partially attributable to sloth on the part of defendant such as might constitute negligence, there is in the record no evidence whatever of bad faith on defendant’s part.

The accident which took the life of Mr. Wiedinmyer occurred on May 29, 1993. Plaintiff first notified defendant of her claim on August 26, 1993, when plaintiff’s then counsel, Stewart B. Liebman, Esquire, informed Casualty Research Service Inc. that he represented the estate of Micah Wiedinmyer “in connection with claims arising from the accident.”

Defendant responded to Mr. Liebman’s letter on November 9,1993, apologizing for the delay (which apparently was not complained of by plaintiff), noting “a file like this seems to require many reports.” Defendant asked for information concerning the nature of plaintiff’s claim, the estate’s legal representation, and other insurance policies which might be at issue. Defendant also requested “all the material usual with a death claim.” Also on November 9,1993, defendant wrote to Kenneth E. Calloway, Esquire, counsel for the estate of Sean Rocks, asking for information on the status of his client’s claim.

The stipulation of facts provides no indication that plaintiff provided any documentation in immediate response to defendant’s letter of November 9, 1993. On November 12, 1993, plaintiff’s counsel wrote to defendant, confirming representation of the Wiedinmyer estate by Mr. Liebman’s law firm and requesting information concerning the amounts available under Mr. Griscom’s insurance policy.

Defendant responded to plaintiff’s request on January 4, 1994, apologizing for the delay and informing plaintiff that there was a $300,000 limit on Mr. Griscom’s policy. Defendant asked again for information concerning whether plaintiff’s decedent had any other insurance coverage which might be at issue. Defendant also requested a specific list of documentation required to process the claim. Also on January 4,1994, defendant wrote to Mr. Calloway, requesting similar information and documentation from the estate of Sean Rocks.

On January 13, 1994, plaintiff presented defendant with a formal demand for payment, detailing claims the amount of which would far exceed the $300,000 available under Mr. Griscom’s policy. Plaintiff’s letter stated that the documentation requested by defendant was enclosed.

On February 1, 1994, plaintiff again wrote to defendant, complaining that defendant had not yet reviewed the documentation forwarded. Defendant responded on February 10,1994, informing plaintiff that defendant had not forwarded all of the requested documentation, including the decedent’s autopsy report and a letter from Prudential Insurance Company “tendering their bodily injury limits.” Defendant also informed plaintiff that the estate of Sean Rocks was making a claim upon Mr. Griscom’s policy and that defendant could not settle one claim without addressing the other. Defendant informed plaintiff that documentation had been requested from counsel for Mr. Rock’s estate, but that Mr. Calloway had not yet responded. Defendant suggested that if plaintiff was anxious to expedite settlement, plaintiff’s counsel should contact Mr. Calloway directly since the two estates would ultimately have to “split” the proceeds of Mr. Griscom’s underinsured motorist policy.

There is no indication in the record that plaintiff’s counsel at this point availed himself of the suggestion that he contact Mr. Calloway.

On February 15, 1994, Mr. Calloway wrote to defendant, stating that he was enclosing requested documentation and expressing an interest in resolving the claim of the estate of Sean Rocks “without the commencement of litigation.” Defendant’s adjuster responded to Mr. Calloway’s letter on March 7, 1994, stating that Mr. Calloway had not sent her most of the documentation she had requested and had indeed sent her the autopsy report not for Sean Rocks, but for Micah Wiedinmyer. Defendant informed Mr. Calloway that settlement could not be arranged prior to receipt of the required documentation, which included a correct autopsy report, an affidavit of no insurance, and information concerning other insurance policies which might provide coverage.

Also on March 7, 1994, plaintiff’s counsel wrote to defendant, stating that he was enclosing a copy of Micah Wiedinmyer’s autopsy report and a letter from Prudential Insurance Company “tendering their bodily injury limits.” That same date, defendant contacted Prudential for information regarding its subrogation interest. Plaintiff’s counsel wrote again to defendant on March 24,1994, stating that he was “once again” enclosing correspondence from Prudential “verifying the Marcucci limits of liability.” Plaintiff’s counsel stated that he had requested from the Prudential adjuster a copy of “the actual dec sheet” which he would forward to defendant as soon as he had it. On April 1,1994, a casualty analyst for Prudential wrote directly to defendant, stating that she did not have most of the information defendant wanted.

On April 6, 1994, plaintiff’s counsel wrote to defendant to announce that he was demanding arbitration of plaintiff’s claim. Counsel announced his choice for an arbitrator and requested that defendant do the same. Counsel’s letter states that he encloses “a copy of verification received from Prudential Insurance Company regarding the Marcucci’s insurance coverage.” Someone, apparently a representative of defendant, has handwritten upon this letter what appears to be: “not a dec sheet but printout.”

Defendant took no immediate action to appoint an arbitrator and, on My 21, 1994, plaintiff’s counsel wrote defendant’s counsel to inform him that plaintiff would file a petition to appoint arbitrator because “Although you have indicated that you are attempting to obtain authority from Harleysville to resolve this matter, no offer of settlement has been made.” Plaintiff formally filed a petition to appoint arbitrator on My 28, 1994. Defendant appointed its arbitrator on August 22,1994. A neutral arbitrator was selected on September 30, 1994, and a hearing was scheduled for January 19, 1995.

On November 3,1994, Mr. Calloway wrote to defendant, expressing annoyance that he had not been contacted by defendant since March 7, 1994, when defendant requested further documentation and information regarding the claim of the estate of Sean Rocks. Mr. Calloway stated that he provided documentation on April 7, 1994, June 17, 1994, and July 8, 1994 but had received no response. Mr. Calloway stated that he had recently received a phone call from plaintiff’s counsel and that he was interested in resolving the matter by “dividing the $300,000 policy equally.”

On December 1,1994, the parties formally agreed that the $300,000 Griscom policy would be divided equally between the estate of Sean Rocks and plaintiff.

We find in the above facts no clear and convincing evidence that defendant acted in bad faith in handling plaintiff’s claim. Indeed, we find no evidence of bad faith at all. Although the accident claiming the life of Mr. Wiedinmyer took place on May 29, 1993, plaintiff did not make formal demand for payment of her claim until January 13,1994. Plaintiff received payment on her claim on December 1, 1994, following the agreed settlement with defendant and the estate of Sean Rocks. Although this delay of some 10 1/2 months was doubtless frustrating to plaintiff, it certainly is not per se evidence of bad faith. See e.g., Quaciari, supra, 998 F. Supp. at 583. In order for plaintiff to recover upon a bad faith claim against defendant, the evidence must demonstrate that this delay is attributable to defendant, that defendant had no reasonable basis for the actions it undertook which resulted in the delay, and that defendant knew or recklessly disregarded the fact that it had no reasonable basis to delay payment. Quaciari, supra; Terletsky, supra.

In the instant case, the record establishes that the entire period of delay cannot be attributed solely to defendant. Although demand for payment was made on January 13, 1994, the stipulation of facts indicates that defendant made repeated requests to plaintiff’s counsel for information and documentation in order to process the claim. For example, the autopsy report for Mr. Wiedinmyer, first specifically requested on January 4, 1994, was not provided until March 7,1994. The record indicates that as late as April 1994, defendant was still attempting to obtain information from plaintiff and Prudential regarding the possible existence of other insurance policies which might provide coverage for the parties to the accident. The stipulation of facts further indicates that Mr. Calloway was still providing the documentation required by defendant from the estate of Sean Rocks as late as July 8, 1994 (see Mr. Calloway’s letter of November 3, 1994).

The record further fails to indicate that defendant had no reasonable basis for its handling of plaintiff’s claim. The accident which killed plaintiff’s decedent also claimed four other lives. Two of the estates of those killed in the accident (Mr. Wiedinmyer’s estate and the estate of Sean Rocks) were making claim to the proceeds from Mr. Griscom’s policy of insurance. Both estates were making claims for amounts which individually would have exhausted that policy’s $300,000 limit for underinsured motorist coverage. Defendant believed that it could not simply pay out these benefits on one claim and ignore the other. Defendant notified plaintiff of this situation as early as February 10, 1994.

There appears in the record no evidence of ill will or dishonest purpose in defendant’s conclusion that payment could not be made upon plaintiff’s claim without also arranging settlement of the Rocks claim. Again, defendant had a single insurance policy with a $300,000 limit, with two parties equally entitled to this policy’s benefits, each making individual claims for amounts greater than the entire proceeds of the policy.

Plaintiff has presented the court with no persuasive authority indicating that defendant was incorrect in interpreting the law as preventing defendant from paying the claim of one of the estates without also arranging settlement with the other. In any event, it is not necessary that defendant have been legally correct in its judgment in this matter in order for this court to determine that plaintiff has failed to present sufficient evidence for a jury to conclude that defendant acted in bad faith. Bad faith cannot be found where the insurer’s actions are in accordance with a reasonable, even if incorrect, interpretation of the law. J.H. France Refractories Co. v. Allstate Insurance Co., 534 Pa. 29, 44, 626 A.2d 502, 510 (1993); Jung, supra; Terletsky, supra. Bad judgment alone does not constitute bad faith.

In the instant case, plaintiff has offered no evidence indicating that defendant’s conclusion that it needed to arrange settlement with both estates was in any manner unreasonable or motivated by ill will. Defendant certainly did not attempt to hide its position on this matter from plaintiff. Defendant indeed suggested that plaintiff’s counsel directly contact counsel for the estate of Sean Rocks in an attempt to expedite a settlement. Defendant stated in its letter of February 10, 1994 that the two estates would ultimately have to negotiate a “split” of the policy proceeds and, indeed, this is eventually what transpired, albeit more than nine months later. Given that the two estates apparently were able to quickly arrange an equal split of the policy proceeds shortly after plaintiff’s counsel did contact counsel for the estate of Sean Rocks (see Mr. Calloway’s letter of November 3, 1994), it appears unfortunate that counsel for the two estates did not enter into direct negotiations sooner, as defendant had suggested in February. The record reflects that prior to Mr. Calloway’s letter of November 3,1994, the claims presented by the estate of Micah Wiedinmyer and the estate of Sean Rocks proceeded along separate paths, although made upon the same insurance policy proceeds. It was not until Mr. Calloway’s November 3, 1994 letter that either estate indicated, within this record, that it was willing to agree to an equal split of the proceeds. Settlement of the claims of both estates came less than one month later.

Again, we see nothing in this record from which a reasonable jury could find bad faith on the part of defendant by clear and convincing evidence. Up until plaintiff’s demand for arbitration, defendant was in regular — if not constant — contact with counsel for both estates. Defendant requested and reviewed documents. Defendant made clear to plaintiff its position that both estates would have to enter into an agreement in order for a payment to be made upon the policy. Defendant suggested that plaintiff’s counsel contact Mr. Calloway.

Following plaintiff’s demand for arbitration on April 6,1994, the record is silent as to any further actions taken or not taken by defendant to process plaintiff’s claim, and the matter appears to have been transferred to counsel. Although the record is not detailed on this point, the stipulation of facts appears to indicate that some level of settlement negotiations took place between counsel following the demand for arbitration. (See Mr. Liebman’s letter to Mr. Haggerty of July 21,1994.) There certainly is nothing in the stipulation providing clear and convine-ing evidence of bad faith by defendant, either in the period prior to plaintiff’s demand for arbitration or after.

While it might conceivably be argued that defendant was negligent in failing to attempt more forcefully to bring the two estates together to conduct the negotiations required to arrange the split of the Griscom proceeds which defendant believed was necessary, this is not indicative of bad faith given that defendant’s position had been clearly expressed to plaintiff. While it might conceivably be argued that defendant was negligent in failing to more actively pursue settlement following plaintiff’s demand for arbitration or to respond more expeditiously to that demand, this also — standing alone — is not clear and compelling evidence of bad faith. We note that plaintiff’s demand for arbitration came prior to defendant receiving all of the documentation requested of the estate of Sean Rocks. We further note that the first clear statement in the record that either side was willing to accept the division of the Griscom policy benefits eventually agreed to does not come until Mr. Calloway’s letter of November 4, 1994, less than one month prior to the actual settlement and after plaintiff filed this action alleging that defendant acted in bad faith.

The record presented, viewed in the light most favorable to plaintiff, simply is insufficient, as a matter of law, for a reasonable jury to find by clear and convincing evidence that defendant acted in bad faith in its handling of plaintiff’s claim.

For all the foregoing reasons, this court’s order of June 4,1999, granting defendant’s motion for summary judgment, should be affirmed.

      . Although it is not explicitly stated anywhere in the record, Mr. Griscom (not a party to the instant action) was apparently a passenger or driver involved in the accident which took the life of Mr. Wiedinmyer.

      . In her complaint, plaintiff styles this action as arising under 42 Pa.C.S. §2307(7) and (9). No such statute exists. It seems apparent that plaintiff intended to bring this action pursuant to 42 Pa.C.S. §8371.

      . The Prudential policy at issue apparently provided coverage to Christopher Marcucci, the alleged underlying tort-feaser in the May 29, 1993 accident.


source: Caselaw Access Project

author: BIESTER JR., J.,

license: Public Domain

text:
    Friel v. Prudential Property and Casualty Insurance Co.
    C.P. of Bucks County,
    no. 97-04945.

      Fred J. Silverman, for plaintiffs.

      Daniel G. Ronca, for for defendant.
    July 28, 1999
   BIESTER JR., J.,

This matter comes before us upon the petition of John F. Friel and Colleen A. Friel to modify an arbitration award of June 24,1997 in favor of petitioners. Petitioners argue that the arbitrators improperly determined that petitioners’ underinsured coverage under their automobile insurance policy should not be stacked. Petitioners seek a modification of the arbitration award from $96,000 to $192,000 in favor of John Friel and from $4,000 to $8,000 in favor of Colleen Friel.

We first address whether we have jurisdiction to determine this matter. A court may disturb or modify the decision of a common-law arbitration panel when a party challenges a particular clause of the insurance policy as “being contrary to a constitutional, legislative, or administrative mandate or against public policy, or unconscionable.” Schultz v. Aetna Casualty and Surety Company, 443 Pa. Super. 659, 663, 663 A.2d 166, 168 (1995) (quoting Webb v. United Services Automobile Association, 227 Pa. Super. 508, 516, 323 A.2d 737, 741 (1974). (emphasis added) In this instance, the crux of petitioners’ argument is that the provision within the insurance policy regarding waiver of stacking underinsured coverage limits is contrary to the mandates of 75 Pa.C.S. § 1738(e). We find, therefore, that we have jurisdiction to determine this matter and turn to the issue of whether the provision violates the statute.

75 Pa.C.S. § 1738(d)(2) provides:

“(2) The named insured shall be informed that he may exercise the waiver of the stacked limits of underinsured motorist coverage by signing the following written rejection form:
“Underinsured Coverage Limits
“By signing this waiver, I am rejecting stacked limits of underinsured motorist coverage under the policy for myself and members of my household under which the limits of coverage available would be the sum of limits for each motor vehicle insured under the policy. Instead, the limits of coverage that I am purchasing shall be reduced to the limits stated in the policy. I knowingly and voluntarily reject the stacked limits of coverage. I understand that my premiums will be reduced if I reject this coverage.
“Sign” 75 Pa.C.S. § 1738(d)(2) (1996).
The remedy for violation of section 1738(d)(2) is found in section 1738(e):
“(e) Signature and date. — The forms described in subsection (d) must be signed by the first name insured and dated to be valid. Any rejection form that does not comply with this section is void.” 75 Pa.C.S. §1738(e) (1996). (emphasis added)

Respondent compbed with section 1738(d)(2), with one exception. Instead of titling its provision “Underin-sured Coverage Limits” as required by the statute, respondent titled this provision of the policy “Rejection of stacked underinsured coverage limits. ”

We find that the addition of words by respondent to the heading of the provision addressing stacking of underinsured coverage limits to be potentially confusing to the insured. The heading used by respondent could be misread by one inexperienced and untutored in this area. The spirit of our appellate court cases requires a brittle and strict adherence to the legislative requirements regarding underinsured and uninsured coverage provisions. In Winslow-Quattlebaum v. Maryland Casualty Company, 723 A.2d 681 (Pa. Super. 1999), the appellant brought an action seeking a declaratory judgment that she was entitled to underinsured motorist benefits under her automobile insurance policy. Appellant’s automobile insurance company denied appellant such coverage on the basis that appellant had signed a waiver of underin-sured motorist coverage. However, the waiver did not appear on a separate sheet of paper as required under 75 Pa.C.S. §1731(c.1), which provides that “[i]nsurers shall print the rejection forms required by subsections (b) and (c) on separate sheets in prominent type and location.” The provision of the insurance policy regarding rejection of underinsured motorist benefits appeared on the same page as the provision of the policy addressing waiver of stacked underinsurance coverage limits. Our Superior Court found that “[t]he statute clearly mandates that rejection of uninsured motorist coverage and underinsured motorist coverage be on a separate sheet’ and therefore, voided the rejection of the underinsured motorist coverage in accordance with 75 Pa.C.S. §1731(c.1). Id. at 684. (emphasis in original)

If failure to provide a waiver on a separate sheet of paper is sufficient to void an insurance policy provision, then using different language than that required by the statute is also sufficient to void a provision. The legislature offered a safe harbor to respondent. One wonders why respondent declined to utilize it. 75 Pa.C.S. § 1738(e) is clear. Failure to use the exact wording as required by 75 Pa.C.S. § 1738(d)(2) renders the provision void.

Based on the foregoing reasons, we enter the following order:

ORDER

And now, July 28, 1999, it is hereby ordered and decreed that petitioners’ petition is granted. The arbitration award of June 24, 1997 is modified as follows: Plaintiff John F. Friel is awarded $192,000 and plaintiff Colleen A. Friel is awarded $8,000.

      . Subsection (b) addresses rejection of uninsured motorist coverage. Subsection (c) concerns rejection of underinsured motorist protection.


author: MINORA, J.,

text:
    Dibble v. Penn State Geisinger Clinic Inc.

      C.P. of Lackawanna County,
    no. 98 CV 2281.

      Kevin P. Foley, for plaintiffs.

      John Q. Durkin, for defendant clinic.

      Kenwyn M. Dougherty, for defendant plan.
    June 27, 1999
   MINORA, J.,

The current action sounds in medical malpractice and is before this court by way of numerous preliminary objections filed by defendants Penn State Geisinger Clinic Inc. and Penn State Geisinger Health Plan (formerly Geisinger Health Plan). The parties have briefed their respective positions and this matter is now ripe for decision.

FACTS

Charles Dibble and his wife, Rhoda Dibble, have commenced this action against various health care and insurance entities and physicians. Instantly, plaintiffs allege that on January 21, 1994, Charles Dibble was admitted to the defendant Geisinger Wyoming Valley Medical Center with a myocardial infarction. At that time, Dibble was a private subscriber of the plan under its insurance contract. Subsequently, Dibble was transferred to the Geisinger Hospital in Danville at which time an agent, employee and/or servant of the defendants determined Charles had an enlarged prostate and ordered a Prostate Specific Antigen test. Plaintiffs allege that Charles’ PSA test came back with an elevated level. Plaintiffs further aver that the physicians named in the caption above as defendants, all of whom were in some way affiliated with the clinic, neglected to appreciate the serious nature of the test results.

Plaintiffs allege that each of the defendants were aware of the elevated PSA and thus, were aware of the fact that Charles suffered from prostate cancer or at a minimum should have performed further testing for purposes of confirming said diagnosis, but failed to do so. Specifically, plaintiffs’ complaint alleges that the defendants had either constructive or actual knowledge of the elevated PSA as well as the fact that Charles suffered from prostate cancer in January of 1994, but failed to render any treatment or do anything for a period of two and a half years. The delayed diagnosis and treatment is claimed to be a result of negligence. Plaintiffs claim, that due to the two and a half year delay, a more extensive amount of damage occurred than if an earlier detection were made and treatment started.

Presently, this court is confronted with two of the 11 named defendants’ preliminary objections. The two defendants presently filing the preliminary objections are: (1) clinic; and (2) plan. In order to provide a clear and concise opinion, this court will address the two above named defendants’ preliminary objections separately.

DISCUSSION

Preliminary Objections Sounding in Demurrers

In considering a demurrer, all material facts set forth in the complaint, as well as all inferences reasonably deducible therefrom are admitted as true. The court cannot accept as true conclusions of law. The question presented by the demurrer is whether, on the facts averred, the law holds with certainty that no recovery is possible. A demurrer should be sustained only in cases where the plaintiff has clearly failed to state a claim on which any relief may be granted. A demurrer should not be sustained if any doubt exists as to whether the complaint adequately states a claim for relief under any theory. Pittsburgh National Bank v. Perr, 431 Pa. Super. 580, 584, 637 A.2d 334, 336 (1994). Since the sustaining of a demurrer results in a denial of the pleader’s claim or dismissal of his suit, a preliminary objection in the nature of a demurrer should be sustained only in cases that clearly and without doubt fail to state a claim for which relief may be granted. Shick v. Shirey, 552 Pa. 590, _, 716 A.2d 1231, 1233 (1998), citing County of Allegheny v. Commonwealth, 507 Pa. 360, 372, 490 A.2d 402, 407 (1985).

“A demurrer will not be sustained unless the face of the complaint shows that the law will not permit recovery, and any doubts should be resolved against sustaining the demurrer.” Giffin v. Chronister, 151 Pa. Commw. 286, 290, 616 A.2d 1070, 1073 (1992). “[I]n pleading its case, the complaint need not cite evidence but only those facts necessary for the defendant to prepare a defense.” PennDOT v. Bethlehem Steel Corp., 33 Pa. Commw. 1, 11, 380 A.2d 1308, 1313 (1977). A preliminary objection in the nature of a demurrer cannot be used to raise substantive defenses against a plaintiff’s right to recover. Goodrich-Amram 2d, vol. 2 §1017(b):25 (1991).

“A preliminary objection in the nature of a demurrer may only be sustained where the complaint is clearly insufficient to establish the pleader’s right to relief.” McCaskill v. Philadelphia Housing Authority, 419 Pa. Super. 313, 316, 615 A.2d 382, 383 (1992).

With these standards in mind we will examine the clinic and plan’s preliminary objections.

The clinic’s preliminary objections concern the following four points: (1) plaintiffs’ complaint fails to state a claim for punitive damages; (2) a claim for corporate negligence or corporate liability cannot be maintained against a medical clinic or group of medical practitioners; (3) plaintiffs’ complaint fails to state a claim for negligent infliction of emotional distress; and (4) in the alternative, plaintiffs’ complaint fails to specifically state the various detailed areas of negligence as against the individual defendants and as such, it requires at least an amendment.

I

Initially, we will address the clinic’s preliminary objections to the plaintiffs’ claims for punitive damages. In order to resolve the issue concerning punitive damages, this court is mindful that under Pennsylvania law, punitive damages may be recovered only if a tort-feasor’s actions were outrageous, wanton, willful, oppressive or so careless as to exhibit a reckless indifference to the rights of others. G.J.D. by G.J.D. v. Johnson, 552 Pa. 169, _, 713 A.2d 1127, 1129 (1998). Pennsylvania has adopted the punitive damages standard enunciated in section 908 of the Restatement (Second) of Torts. Chambers v. Montgomery, 411 Pa. 339, 344, 192 A.2d 355, 358 (1963). The pertinent part of that section states:

“Punitive damages are damages awarded against a person to punish him for his outrageous conduct and to deter him and others like him from similar conduct in the future. Punitive damages may be awarded for conduct that is evil motive or reckless indifference to the rights of others. In assessing punitive damages, the trier of fact can properly pursue the character of the defendant’s act, the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause and the wealth of the defendants.” Restatement (Second) of Torts §908.
Hence, conduct that exhibits a reckless indifference to another’s interest may warrant the imposition of punitive damages. See also, Rhoads v. Heberling, 306 Pa. Super. 35, 46-47, 451 A.2d 1378, 1384 (1982).
Clinic has also objected to the punitive damages claim contained in Count XIV of the plaintiffs’ complaint seeking loss of consortium on behalf of plaintiff Rhoda Dibble. In her claim, Rhoda incorporates the forgoing paragraphs of the complaint at issue and alleges she suffered damages “[a]s a direct and proximate result of the defendants’ conduct as stated in the preceding paragraphs.”

We would like to note that plaintiff Rhoda Dibble’s consortium action is derivative and dependent upon her spouse’s action. Therefore, her claims for punitive damages will be allowed to the extent punitive damages are allowed for Charles Dibble by the holdings of this court contained in this memorandum.

To begin, we will address the clinic’s preliminary objections concerning the claim for punitive damages. We hold that the allegations of the plaintiffs’ complaint alleging that defendants’ failure to advise Charles of the fact that he suffered from prostate cancer in January of 1994 and/or recommend further follow-up testing to confirm the diagnosis may, if proven, support a cause of action for punitive damages. This alleged failure to warn Charles of his condition, if proven, can be construed as an illustration of the clinic’s “reckless indifference” to Dibble’s rights as a patient. Therefore, this court holds that the clinic’s preliminary objections to plaintiffs’ claims for punitive damages must be denied, because we find that the allegations enumerated in the plaintiffs’ complaint, on their face, could be construed by a finder of fact to support the possibility of recovery for said claim.

II

The second issue raised in the clinic’s preliminary objections is whether a claim for corporate negligence can be maintained against them. The crux of clinic’s argument is that a claim for corporate negligence is strictly limited to hospitals and does not extend to individuals or group medical practices such as the clinic. Therefore, the claim should be dismissed against the clinic because they do not fit within the narrow parameters of liability based on corporate negligence.

“Corporate negligence is a doctrine under which [a defendant] is liable if it fails to uphold the proper standard of care [it owes] the patient. . . This theory of liability creates a nondelegable duty which the [defendant] owes directly to a patient. Therefore, an injured party does not have to rely on and establish the negligence of a third party.” Thompson v. Nason Hospital, 527 Pa. 330, 339, 591 A.2d 703, 707 (1991). (footnote omitted) The Thompson court then set forth four general areas of corporate liability:

“(1) A duty to use reasonable care in the maintenance of safe and adequate facilities and equipment...;
“(2) A duty to select and retain only competent physicians ...;
“(3) A duty to oversee all persons who practice medicine within its walls as to patient care ... ;
“(4) A duty to formulate, adopt and enforce adequate rules and policies to [enforce] quality care for patients.” Id. at 339-40, 591 A.2d at 707. (citations omitted)

Additionally, the Thompson court stated that “we adopt as a theory of hospital liability the doctrine of corporate negligence or corporate liability under which the hospital is liable if it fails to uphold the proper standard of care owed its patient.” Id. at 341, 591 A.2d at 708.

Until recently, hospitals were the only medical providers recognized to be subject to such a claim. Last year the Pennsylvania Superior Court extended liability under corporate negligence to include health maintenance organizations. Shannon v. McNulty, 718 A.2d 828, 830 (Pa. Super. 1998). The clinic, however, is not a hospital or an HMO but it is described in plaintiffs’ complaint as “a regional system of primary care facilities . . . which offered for sale and sold medical services and devices....” Plaintiffs’ complaint, paragraph 4.

In order to decide whether the doctrine of corporate negligence should be extended to an entity such as the clinic, it is instructive to review the reasons for its application to hospitals and HMOs. Corporate negligence was applied to corporate hospitals “in full recognition of [their] role in the total health care of [their] patients.” Thompson, supra at 341, 591 A.2d at 708. The Thompson court stated that “[t]he corporate hospital of today has assumed the role of comprehensive health center with responsibility for arranging and coordinating the total health care of its patients.” Id. at 338, 591 A.2d at 706. (footnote omitted) Therefore, the Thompson court held that for a hospital to be independently liable for negligence it must be shown that the hospital had actual or constructive knowledge of the defects which caused the harm, and the hospital’s own negligence must have been a substantial factor in causing the harm. Id. at 341, 591 A.2d at 708.

In extending the doctrine to HMOs, the Pennsylvania Superior Court stated:

“[HMOs play a] central role... in the total health care of its subscribers. A great deal of today’s health care is channeled through HMOs with the subscribers being given little or no say so in the stewardship of their care. Specifically, while these providers do not practice medicine, they do involve themselves daily in decisions affecting their subscribers’ medical care.” Shannon, supra at 835.

Therefore, the Superior Court extended the doctrine of corporate negligence to HMOs because HMOs control their subscribers’ care and interject themselves “into the rendering of medical decisions affecting a subscriber’s care.” Id. at 836.

Here, it appears that the clinic, like a hospital and an HMO, is a critical component of the comprehensive health care delivery system to the patient. Further, it is generally the first interface that a patient has in entering into the health care delivery system. Despite this role, a clinic cannot be considered a comprehensive health care center such as a hospital, nor can it be construed to play a central role in the “total health care of its subscribers.” Shannon, supra. In fact, this type of facility is referred to as a primary care facility. As such it is only a gateway for further referrals into the health care delivery system where appropriate. Because a clinic is not a comprehensive medical care facility, but instead is a primary care facility this court believes Thompson, supra, does not apply.

A clinic, while it plays a critical primary role, albeit limited, in providing health care it cannot be considered to be a central role ... in the total health care of its subscribers. Therefore, Shannon, supra, is not applicable to a clinic. Oftentimes, both the primary care facility and primary care doctor are told how a patient can be treated within the limits of the subscriber’s HMO plan. Therefore, based upon our findings, we hold that the clinic’s preliminary objection to Count I of plaintiffs’ complaint alleging a cause of action under a theory of corporate negligence is granted.

Ill

The clinic’s third preliminary objection pertains to Count XIV of plaintiffs’ complaint, which contains a claim for emotional distress. Upon a thorough review of plaintiffs’ brief in response to the clinic’s preliminary objections, this court is unable to locate any reply by the plaintiffs to said objection. Due to plaintiffs’ failure to respond to this objection, this court in making its determination on how to resolve this issue seeks guidance from the Lackawanna County Rules of Civil Procedure. Specifically, we cite to Rule 1028, disposition of preliminary objections and motions for judgment, which states in pertinent part as follows:

“(c) All parties who wish to contest the preliminary objections or the motion shall within 30 days from the filing of such preliminary objections or motion file a reply memorandum of law and a certificate that such has been served upon the moving party....
“(h) Timely filing of memoranda of law is essential to the proper functioning of this rule. Therefore, if a moving party fails to file a memorandum of law within the time provided in subsection (b) above, the preliminary objections or motion shall be dismissed. If an opposing party fails to file a memorandum of law within the time provided in subsection (c) above, that party shall be deemed not to contest the matters raised in the preliminary objections or motion and the court shall proceed to disposition on that basis.” Lacka. Co. R.C.P. 1028. (emphasis added)

The clinic’s preliminary objection concerning plaintiffs’ claim for emotional distress is granted due to plaintiffs’ failure to brief this issue. Therefore, this count is stricken from the complaint.

1 — I

The clinic’s final preliminary objection requests that the plaintiffs be ordered to file a more specific complaint with regard to those paragraphs and counts of the complaint delineating the various theories of negligence against the separate defendants. The complaint alleges negligence against “defendant doctors” without identifying the specific doctor for which each of these assertions is applicable. The specific counts of the complaint which make the general allegations against the doctors are as follows: Count I, paragraph 109, subparagraphs (a), (b), (i), (bb) and (hh); Count II, paragraph 112, sub-paragraphs (a), (b), (j), (k), (1) and (q); Count IX, paragraph 137, subparagraphs (a), (b), (i) and (cc); and Count X, paragraph 139, subparagraphs (a), (b), (i) and (bb). The clinic also asserts that the plaintiffs’ complaint sets forth numerous allegations of essentially identical theories of negligence against each and every defendant. Due to the length of time that has transpired over the alleged negligent conduct, the clinic avers that it is almost impossible to conclude that each and every theory of negligence against all the defendants are identical. Therefore, the clinic requests that the plaintiffs be ordered to file a more specific complaint.

In response to the above objection, the plaintiffs contend that if any question exists as to the sufficiency of the factual allegations, this court should liberally grant leave to amend the complaint. This remedy appears a suitable response to the preliminary objections at issue and thus, this court is striking the objectionable language delineating the various theories of negligence against the separate defendants. However, the plaintiffs are granted 20 days to amend the following counts of their complaint: Count I, paragraph 109, subparagraphs (a), (b), (i), (bb) and (hh); Count II, paragraph 112, subparagraphs (a), (b), (j), (k), (1) and (q); Count IX, paragraph 137, sub-paragraphs (a), (b), (i) and (cc); and Count X, paragraph 139, subparagraphs (a), (b), (i) and (bb) or in the alternative to proceed without the stricken language.

Despite the fact that the clinic makes no objection to the plaintiffs’ fiduciary duty claims, the plaintiffs’ brief in response to defendant clinic’s preliminary objections contains an allegation that the clinic breached their fiduciary duty of full disclosure to their patient, Dibble. However, as noted above, the clinic raised only four issues in their preliminary objections, none of which concerned a breach of fiduciary duty. Conversely, plan’s preliminary objections challenge the claims arising out of an alleged breach of fiduciary duty.

V

We shall now address the preliminary objections raised by plan to the plaintiffs’ complaint.

Preliminarily, the plan has filed preliminary objections to Counts II, III, IV, V and XIV of the plaintiffs’ complaint demanding punitive damages. The gravamen of the plaintiffs’ allegations for punitive damages is that they allege that the plan had employed the defendant doctors in this action with knowledge and notice or reason to know of the doctors’ lack of sufficient qualification, capacity or experience. Plaintiffs also allege that the plan held out the defendant doctors to the plaintiff as being competent, knowledgeable and experienced physicians capable of properly handling Charles’ medical conditions. Further, the plan is alleged to have been providing and promulgating policies and procedures detrimental to the treatment of Dibble.

The plaintiffs’ complaint also alleges that the plan failed to provide qualified, competent and/or experienced medical personnel, failed to adequately supervise the same and promulgated treatment practices and policies that are recklessly indifferent and detrimental to Dibble’s treatment. Specifically, the plaintiffs’ complaint alleges “gross, wanton, reckless, careless and negligent” conduct on the part of plan. For the most part, this court finds that the aforementioned allegations are sufficient to support a cause of action for punitive damages; however, there are some areas in which they do not.

Therefore, the plan’s preliminary objections to plaintiffs’ claims for punitive damages are granted in part and denied in part and shall be discussed in full in this writing as we address each count of the plaintiffs’ complaint objected to by the plan.

The plan objected to paragraph 104 and subparagraphs 112(u), 122(c) and 122(d) for legal insufficiency. Paragraph 104 of the plaintiffs’ complaint alleges that the plan owed plaintiff a fiduciary duty “arising out of its physician/patient/health care provider relations and/or contractual relationship.” Paragraph 112 alleges “gross, wanton, reckless, careless and negligent conduct and improper treatment on the part of defendant plan.” Specifically, subparagraph 112(u), objected to by plan, avers that the plan committed a “breach of its fiduciary obligations to the plaintiff, Charles Dibble.”

Finally, subparagraphs 122(c) and (d) allege that:

“The foregoing conduct and action on the part of the defendant plan constituted bad faith towards its insured on the part of the defendant plan in that it: (c) has failed to exercise the utmost good faith in the discharge of its contractual and fiduciary duties to the plaintiffs under the foregoing policy and governing law; and (d) has otherwise engaged in unfair claims and insurance practices in violation of statutory, contractual and fiduciary obligations.”

A thorough examination of the plaintiffs’ pleadings reveals that plaintiffs have failed to respond to the plan’s preliminary objections concerning a breach of fiduciary duty discussed supra. It appears that the plaintiffs have erroneously responded to the clinic’s preliminary objections, which do not deal with a breach of fiduciary duty. Instead, the plaintiffs should have responded to the plan’s preliminary objections concerning a breach of fiduciary duty. However, in the interest of judicial economy and expediency, this court will now address the plan’s preliminary objections and construe the plaintiffs’ response to the clinic’s nonexistent preliminary objection as a response to the plan’s objections. Thus, we recognize that Pennsylvania law holds that “members of a profession, especially the medical profession, stand in a confidential or fiduciary capacity as to their patients.” Alexander v. Knight, 25 D.&C.2d 649, 655 (1961), affirmed, 197 Pa. Super. 79, 177 A.2d 142 (1962). (emphasis added)

Based on the above reasoning, this court finds that it is not clear and free from doubt that based upon this complaint the pleader will be unable to prove facts legally sufficient to establish a right to relief. Accordingly, the aforementioned preliminary objections are disposed of as follows: paragraph 104 dealing with plan’s alleged fiduciary duty to the plaintiffs is denied; subparagraph 112(u) dealing with plaintiffs’ claim for a breach of fiduciary duty is denied; subparagraph 122(c) alleging a lack of good faith in plan’s dealings with the plaintiffs is denied; and subparagraph 122(d) alleging that plan engaged in unfair insurance practices is denied.

Additionally, paragraph 112’s allegations of “gross, wanton, reckless, careless and negligent conduct and improper treatment on the part of defendant plan . . .,” discussed supra, give rise to the punitive damages claim contained in Count II of the plaintiffs’ complaint which has also been objected to by plan. Based on our above holding and in the interest of consistency, this court finds that the plan’s preliminary objections to claims for punitive damages contained in Count II of the plaintiffs’ complaint are denied. As we find that the above allegations of “gross, wanton and reckless” conduct on behalf of plan are sufficient if proven to a jury’s satisfaction to support a cause of action for punitive damages.

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The plan has also made preliminary objections alleging a lack of specificity. The objected to portion of the plaintiffs’ complaint are subparagraphs 112(d), (e), (f), (g), (h), (k), (1), (m), (n), (o), (s), (w) and (x) and sub-paragraph 122(d). The objected to portions of subpara-graph 112 give rise to the plaintiffs’ claim for punitive damages which this court addressed supra, dealing with the plan’s alleged failure to provide qualified, competent and/or experienced medical personnel, failed to adequately supervise the same and promulgated treatment practices and policies detrimental to plaintiff’s treatment which this court held were sufficient to support a cause of action for punitive damages.

Specifically, in paragraph 112 of their complaint the plaintiffs have alleged that the gross, wanton, reckless, careless and negligent conduct and improper treatment on the part of the defendant plan consisted of the following:

“(d) failing to promulgate sufficient rules, regulations, and policies to ensure the delivery of competent medical services to plaintiff;
“(e) failing to follow prescribed rules, regulations, and policies and accepted medical standards and procedures in the care and treatment of plaintiff Charles Dibble;
“(f) failure to follow the medical code of ethics in promulgating rules, regulations and policies pertaining to the delivery of medical services of the plaintiff Charles Dibble;
“(g) failing to use proper methods and procedures to treat the plaintiff’s medical treatment;
“(h) incorrectly treating the condition of plaintiff Charles Dibble;
“(k) permitting the defendant doctors to continue to work as employees, agents, servants and/or representatives when they knew or should have known that their employees, agents, servants and representatives were unable to and incapable of performing the requirements of their respective employment;
“(1) failing to establish procedures and programs to determine whether the defendant doctors were fit and capable of properly performing the requirements of their respective employment;
“(m) failing to adequately observe, supervise and control the quality of care received by the plaintiff within its network of physicians and health care facility providers;
“(n) failing to ensure that the plaintiff received adequate medical attention necessary by a physician/specialist consultant;
“(o) developing and enforcing inappropriate policies and protocols which encourage providing a substandard care;
“(s) failing to provide appropriate preventive medical services;
“(w) violation of the “Health Maintenance Organization Act,” 40 P.S. §1551, et seq.; and
“(x) violation of the provisions of chapter 9 of title 28 and chapter 152 of title 31 of the Pennsylvania Code pertaining to the Managed Care Organization and Preferred Provider Organizations.”

The plan had also objected to subparagraph 122(d), which states:

“The forgoing conduct and actions on the part of the defendant plan constitute bad faith on the part of defendant plan towards its insured in that it:
“(d) has otherwise engaged in unfair claims and insurance practices in violation of its statutory, contractual and fiduciary obligations.”

Under Rule 1028(a)(3) of the Pa.R.C.P. a preliminary objection on the ground of insufficient specificity of a pleadmg requires that the pleading m question be tested as to whether it fully summarizes material facts. Namely, ultimate facts essential to support the claim must be pled or the plaintiff’s complaint must inform the defendant, with accuracy and completeness, of the specific basis on which recovery is sought, so the defendant may know without question upon what grounds to make the defense. Paz v. Commonwealth, Dept. of Corrections, 135 Pa. Commw. 162, 166, 580 A.2d 452, 454 (1990). A court may order a pleading to be stricken if found to be insufficient, or it may grant the party leave to amend the pleading. Rule 1033 of the Pa.R.C.P. provides that a party, either by filed consent or by leave of court, may at any time amend his pleading. This right to amend is liberally granted. W.I. Snyder Corp. v. Caracciolo, 373 Pa. Super. 486, 492, 541 A.2d 775, 778 (1988).

After careful review of subparagraphs 112(d), (e), (f), (g), (h), (k), (1), (m), (n), (o), (s), (w) and (x) and sub-paragraph 122(d) of the plaintiffs’ complaint objected to by the plan, we have determined that they make rather broad general statements without sufficient facts alleged in support thereof. Accordingly, plan’s preliminary objections for lack of specificity to subparagraphs 112(d), (e), (f), (g), (h), (k), (1), (m), (n), (o), (s), (w) and (x) and subparagraph 122(d) of the plaintiffs’ complaint are granted. However, plaintiffs’ and their counsel are granted 20 days to amend their complaint within the confines of this opinion or alternatively to proceed without the stricken averments. This ruling is consistent with Pennsylvania’s requirements that plaintiff plead sufficient facts to allow a defendant to adequately respond and leave to amend be liberally granted.

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Count IV of the plaintiffs’ complaint sets forth a cause of action in bad faith. Plaintiffs allege that “the defendant plan has acted in an unreasonable manner and in bad faith in misrepresenting about insurance benefits under the policy.” The plan has filed preliminary objections to subparagraph 122(a) contained in Count IV of the plaintiffs’ complaint which purports to set forth a cause of action under the Pennsylvania Unfair Insurance Practices Act. While addressing actions under the UIPA, the Pennsylvania Supreme Court held as follows:

“These statutory prohibitions are enforced by the insurance commissioner of Pennsylvania, who is empowered to ‘examine and investigate the affairs of every person engaged in the business of insurance in this state’ to determine whether the Act has been violated.... There is no evidence to suggest, and we have no reason to believe, that the system of sanctions established under the Unfair Insurance Practices Act must be supplemented by a judicially created cause of action....” D’Ambrosio v. Pennsylvania National Mutual Casualty Insurance Co., 494 Pa. 501, 507, 431 A.2d 966, 969-70 (1981). (emphasis added)
“It is clear that the UIPA and the Department of Insurance Regulations can only be enforced by the state insurance commissioner and not by way of private action.” Romano v. Nationwide Mutual Fire Insurance Company, 435 Pa. Super. 545, 552, 646 A.2d 1228, 1232 (1994). (emphasis added) Thus, as the UIPA provides for enforcement by the insurance commissioner and not by an individual citizen in a private cause of action, this court must find that subparagraph 122(a) of Count IV of the plaintiffs’ complaint fails to set forth a valid cause of action.

Therefore, the plan’s preliminary objections to sub-paragraph 122(a) of Count IV of the plaintiffs’ complaint are granted. Said subparagraph is hereby stricken for legal insufficiency as this court finds the above count fails to establish the plaintiffs’ right to relief against plan under the UIPA. Its enforcement is solely the responsibility of the insurance commissioner.

The plan has also objected to Count IV’s claim for punitive damages. As subparagraph 122(a) is stricken, plan’s preliminary objections to this portion of the count dealing with the issue of punitive damages has been rendered moot and need not be addressed. Additionally, this court has denied the plan’s preliminary objections for legal insufficiency to subparagraphs 122(c) and (d) discussed supra, and we also deny the plan’s preliminary objections to the remaining punitive damages claims contained in Count IV of the plaintiffs’ complaint.

VIII

The plan has also filed preliminary objections to Count III of the plaintiffs’ complaint alleging breach of contract. Specifically, the plan contends that the “conduct on the part of the defendant plan and its agents is a breach of implied duties of good faith and fair dealing which is implicit in all insurance contracts.” Paragraph 116 of the plaintiffs’ complaint proceeds to allege that the aforementioned conduct caused Dibble to “incur additional expenses, suffer unnecessary delay and hardship and has otherwise caused damage that could have been avoided if the defendant [plan] had promptly and reasonably honored and complied with its statutory and contractual duties.” The plan’s preliminary objections assert that Count III of the plaintiffs’ complaint should be dismissed because under Pennsylvania law, health care providers are neither warrantors nor guarantors of a cure, or the results of treatment rendered, absent an express promise to achieve a specific result. The plan’s preliminary objections on this issue instruct the reader to see accompanying memorandum of law. However, this court’s examination of the same fails to reveal any additional elaboration on this issue.

As stated above, Count III of the plaintiffs’ complaint alleges a breach by the plan of its obligation of good faith and fair dealing under their insurance contract with Dibble. The plaintiffs’ allegations of breach of good faith and fair dealing by the plan clearly gives rise to a valid cause of action under Pennsylvania law since the Pennsylvania Supreme Court has long held that an insurer must act with the “utmost good faith” toward its insured. Romano, supra at 550, 646 A.2d at 1231.

We find that it is unclear, at this stage of the case, whether the plan acted in “good faith” while providing insurance coverage to Dibble. Thus, this court holds that the plan has not satisfied the high burden placed upon defendants who file preliminary objections in the nature of a demurrer. It is not clear and free from doubt that the plaintiffs will be unable to prove facts legally sufficient to establish their right to relief. Therefore, the plan’s preliminary objections to plaintiffs’ claims for breach of contract under Count III of the plaintiffs’ complaint are denied. However, the plan has also objected to Count Ill’s claim for punitive damages, which are generally not recoverable in contract actions.

“It is undisputed that the imposition of exemplary or treble damages is essentially punitive in nature. The law of Pennsylvania clearly provides, however, that punitive damages are not recoverable in an action solely based on breach of contract.” However, treble damages may be recoverable. Johnson v. Hyundai Motor America, 698 A.2d 631, 639 (Pa. Super. 1997), citing Thorsen v. Iron and Glass Bank, 328 Pa. Super. 135, 143, 476 A.2d 928, 932 (1984). Thus, while it is possible for the plaintiffs to be awarded treble damages under breach of contract, a claim for unlimited punitive damages is clearly not allowed on only contract principles under Pennsylvania law. Therefore, the plan’s objections to plaintiffs’ claim for punitive damages in Count III of the plaintiffs’ complaint are granted and said claim is hereby stricken; however, the plaintiff is granted 20 days to amend and re-plead the contractual damages as treble damages.

X I — I

The plan avers m its preliminary objections to Count V of the plaintiffs’ complaint that said count fails to properly plead a cause of action for violations of the Unfair Trade Practices and Consumer Protection Law, 73 PS. §201-1. Under Pennsylvania law, the UTP/CPL makes it unlawful, inter alia, to engage in “unfair methods of competition and unfair or deceptive acts or practices.” 73 P.S. §201-3. The plan contends that the plaintiffs’ averments of a violation of the UTP/CPL are too vague and ambiguous to put the plan on notice of the true nature of the allegations made against it. Specifically, the objections indicate that the plaintiffs have failed to state how the alleged wrongful conduct is actionable under the UTP/CPL.

The plaintiffs maintain that the conduct and actions on the part of the plan constitute an unfair or deceptive practice that created the likelihood of confusion or misunderstanding on the part of the plaintiff and other insureds. Specifically, they contend that the “conduct and actions on the part of the defendant [plan] constitute active misfeasance by the defendant [plan] towards the insured, the plaintiff [Dibble].”

The UTP/CPL defines “unfair or Deceptive Acts or Practices” as “engaging in any other fraudulent conduct which creates a likelihood of confusion or of misunderstanding.” 73 P.S. §201-2(4)(xvii). While addressing the UTP/CPL the Pennsylvania Superior Court emphatically stated the following: “[a]s a statute for the prevention of fraud, it must be liberally construed to effect the purpose. ..

“Since the Consumer Protection Law was in relevant part designed to thwart fraud in the statutory sense, it is to be construed liberally to effect its object of preventing unfair and deceptive practices.” Kaplan v. Cablevision of PA Inc., 448 Pa. Super. 306, 313, 671 A.2d 716, 719 (1996). (emphasis added)

In view of the requirement for sustaining causes of action under the UTP/CPL for “unfair or deceptive acts or practices” such as “engaging in any other fraudulent conduct which creates a likelihood of confusion or of misunderstanding,” 73 P.S. §201-2(4)(xvii), we are granting the plan’s preliminary objections to Count V of the plaintiffs’ complaint. The plaintiffs have not pled a cause of action under the UTP/CPL, they merely stated in the most general terms that the plan’s conduct and actions toward Charles constituted active misfeasance. A more specific recitation of facts constituting fraud and of the nature and causal relationship between the plan’s alleged misconduct giving rise to the current action and the harm suffered by the plaintiffs is required to provide the plan with facts sufficient to prepare a defense. Further allegations of fraud must be pled with particularity. See Pa.R.C.P. 1019(b).

A court may order a pleading to be stricken if found to be insufficient, or it may grant the party leave to amend the pleading. Rule 1033 of the Pa.R.C.P. provides that a party, either by filed consent or by leave of court, may at any time amend his pleading. This right to amend is lib erally granted. W.I. Snyder Corp. v. Caracciolo, 373 Pa. Super. 486, 492, 541 A.2d 775, 778 (1988). (emphasis added)

Therefore, for these reasons and all those stated above, the aforementioned preliminary objections to Count V of the plaintiffs’ complaint alleging legal insufficiency are granted. However, the plaintiffs and their counsel are granted 20 days to amend their complaint within the confines of this opinion or alternatively to proceed without the stricken count.

Furthermore, the plan has again objected to the punitive damages claim contained in Count V of the plaintiffs’ complaint. “The clear language of the UTP/CPL allows an award of treble damages.” Metz v. Quaker Highlands Inc., 714 A.2d 447, 450 (Pa. Super 1998). Therefore, the plan’s objections to the claim for punitive damages contained in Count V of the plaintiffs’ complaint are granted and said claims are stricken. However, under Pennsylvania law the plaintiffs may obtain treble damages under the UTP/CPL “the trial court may in its discretion, award up to three times the actual damages sustained.” Johnson, supra at 639. Therefore, the plaintiffs are granted 20 days to amend their pleadings and plead treble damages as opposed to unlimited punitive damages.

X

The plan has filed preliminary objections in the form of a motion to strike paragraphs 39, 99, 100 and sub-paragraphs 112(f), (p) and (r) of the plaintiffs’ complaint for failure to state a claim upon which relief can be granted.

This court will first address paragraphs 39,99 and 100 and then proceed to dispose of the objections to sub-paragraphs 112(f), (p) and (r). Paragraph 39 alleges in relevant part that: “[u]nder the aforementioned agreement, it is provided for a base salary to be paid to each of the Geisinger clinical physicians and further provided a formula whereby each of the physicians or physicians’ groups would be paid based upon referrals made or not made by physicians to other groups or testing facilities both inside and outside of the facility and which allowed the various physicians ... to receive additional bonuses for not prescribing tests, treatment and/or making appropriate referrals to subscribers such as the plaintiff Charles Dibble.”

Paragraph 99 alleges in part that: “[a]t all times relevant, the defendant Fino and the other defendant doctors had a direct financial interest in limiting the medical care provided to the plaintiff Charles Dibble.”

Paragraph 100 alleges in part that: “[a]t no time did the defendant plan and/or the defendant Fino and/or any of the defendant doctors advise the plaintiff of their direct financial interest in limiting medical care to the plaintiff.”

The plan asserts that the above claims should be dismissed because they fail to state a cause of action for which relief can be granted.

“It is settled beyond peradventure, however, that the judicial branch is precluded by constitutional mandate from addressing the ethical, moral, or social implications of a health care program which indirectly provides a diminished compensation for a provider who deems further medical attention necessary or desirable. The fundamental prerogative and duty of considering and establishing social policy, including, of course, the regulation of health care providers, is vested solely in the legislature.’’'’ McClellan v. Health Maintenance Organi zation of Pennsylvania, 413 Pa. Super. 128, 134 n.6, 604 A.2d 1053, 1056 n.6 (1992). (emphasis added)

Based on the preceding case law, however, we find that it is not clear and free from doubt that the plaintiffs will be unable to prove facts legally sufficient to establish their right to relief. Accordingly, the aforementioned preliminary objections to paragraphs 39, 99 and 100 of the plaintiffs’ complaint are denied. There are sufficient facts alleged which take these relevant paragraphs outside of social policy and regulation of health care providers. As the Alexander court has stated, the medical profession stands in a confidential or fiduciary capacity to their patients, and these allegations go to the heart of that fiduciary relationship. Alexander, supra, at 25 D.&C.2d at 655.

The plan also objected to subparagraph 112(p), (f) and (r) that state the following: paragraph 112 alleges in valid part that: “the gross, wanton, reckless, careless and negligent conduct and improper treatment on the part of the defendant plan is as follows:... (f) failure to follow the medical code of ethics in promulgating rules, regulations and policies pertaining to the delivery of medical services to the plaintiff Charles Dibble; . . . (p) providing financial and other disincentives to the providing of quality health care; . . . and (r) encouraging its network of physicians and health care facility providers, including the other defendants, to fail to make the appropriate referral of medical treatment....”

Based on this court’s reasoning discussed supra in disposing of the clinic’s preliminary objections concerning punitive damages, we hold that the above language shall not be stricken because if the allegations were proven to the satisfaction of a jury it provides the requisite allegations needed for that jury to sustain a cause of action for punitive damages if proven at trial. Thus, for these reasons and all those stated above we find it is not clear and free from doubt that the plaintiffs will be unable to prove the essential facts needed to establish their right to relief under subparagraphs 112(p) and (r) of the plaintiffs’ complaint. Therefore, the plan’s preliminary objections to subparagraphs 112(p) and (r) are denied.

Additionally, the plan’s preliminary objections to sub-paragraph 112(f) of the plaintiffs’ complaint are also denied as this court finds the allegation that the plan failed to “follow the medical code of ethics in promulgating rules, regulations and policies pertaining to the delivery of medical services to the plaintiff Charles Dibble” also does not deal with the social, moral or ethical implications of the plan’s treatment policies but deals with the legalities of their medical malpractice case. Thus, we again hold that it is not clear and free from doubt that the plaintiffs will be unable to prove facts necessary to establish their right to relief under subparagraph 112(f) of the plaintiffs’ complaint. Therefore, the plan’s preliminary objections to subparagraph 112(f) are denied.

Thus, for all of the aforementioned reasons the plan’s preliminary objections to subparagraphs 112(p), (r) and (f) of the plaintiffs’ complaint are denied.

XI

Finally, the plan has objected to the punitive damages claim contained in Count XIV of the plaintiffs’ complaint seeking loss of consortium on behalf of plaintiff Rhoda Dibble. In the claim, Rhoda incorporates the foregoing paragraphs of the complaint at issue and alleges to have suffered damages “[a]s a direct and proximate result of the defendant’s conduct as stated in the preceding paragraphs.” (emphasis added)

As Rhoda’s loss of consortium claim arises from the defendant plan’s conduct towards plaintiff Charles Dibble, her claim is bound by the holdings of this court contained in this memorandum. Thus, plan’s preliminary objections to Rhoda’s claims for punitive damages are granted in part and denied in part in a manner consistent with this court’s holdings on Counts II, III, IV and V of the plaintiffs’ complaint which were disposed of as follows: Count II denied; Count III granted; however, the plaintiffs are granted 20 days to amend their pleadings and plead treble damages; Count IV was stricken as to subparagraph 122(a) and denied to the remainder of Count IV; Count V granted; however, the plaintiffs are granted 20 days to amend their pleadings and plead treble damages. The rationale for each of these holdings was discussed in full supra.

While addressing the size of an award for a claim of loss of consortium the Pennsylvania Superior Court has held: “Consortium is an element of damages which has no market value and the amount to be awarded for its loss is particularly for the common sense and sound discretion of the jury.” Burns v. Pepsi-Cola Metropolitan Bottling Co., 353 Pa. Super. 571, 577, 510 A.2d 810, 813 (1986). (emphasis added)

The parties are to proceed in a manner consistent with this memorandum. An appropriate order follows.

ORDER

And now, to wit, June 27, 1999, it is hereby ordered that the defendants’ (clinic and plan) preliminary objections are granted in part and denied in part.

First, this court will address the clinic’s four preliminary objections concerning the following:

“(1) The clinic’s preliminary objections concerning punitive damages are denied.
“(2) The clinic’s preliminary objections concerning corporate negligence are granted.
“(3) The clinic’s preliminary objections concerning emotional distress are granted.
“(4) The clinic’s preliminary objections concerning filing a more specific complaint with regard to those paragraphs and counts of the complaint delineating the various theories of negligence against the separate defendants are granted. Specifically, the plaintiffs are allowed 20 days to amend the following counts of their complaint: Count I, paragraph 109, subparagraphs (a), (b), (i), (bb) and (hh); Count II, paragraph 112, subpara-graphs (a), (b), (j), (k), (1) and (q); Count IX, paragraph 137, subparagraphs (a),'(b), (i) and (cc); and Count X, paragraph 139, subparagraphs (a), (b), (i) and (bb) or in the alternative to proceed without the stricken language in conformity with this opinion.”

Second, this court will now address the plan’s preliminary objections to the plaintiffs’ complaint as follows:

“(1) The plan’s preliminary objections concerning the claims for punitive damages are granted in part and denied in part as follows: Count II denied; Count in granted; however, the plaintiffs are granted 20 days to amend their pleadings and plead treble damages; subparagraph 122(a) of Count IV was stricken and therefore rendered moot and denied as to the remainder of Count IV; Count V granted; however, the plaintiffs are granted 20 days to amend their pleadings and plead treble damages; Count XIV granted in part and denied in part in a manner consistent with the above holdings.
“(2) The plan’s preliminary objections to paragraph 104 of the plaintiffs’ complaint for legal insufficiency are denied.
“(3) The plan’s preliminary objections alleging a lack of specificity under Count II, subparagraphs 112(d), (e), (f), (g), (h), (k), (1), (m), (n), (o), (s), (w) and (x) and Count IV, subparagraph 122(d) are granted. However, plaintiffs are granted 20 days to amend only the above mentioned subparagraphs contained in Count II of their complaint, within the confines of this opinion or alternatively to proceed without the stricken counts.
“(4) The plan’s preliminary objections to Count III of the plaintiffs’ complaint are denied, with the exception of Count Ill’s punitive damages claim which has already been stricken by this court.
“(5) The plan’s preliminary objections alleging legal insufficiency to subparagraph 122(a) of Count IV of the plaintiffs’ complaint are granted, and the said subpara-graph is hereby stricken.
“(6) The plan’s preliminary objections alleging legal insufficiency to subparagraphs 122(c) and 122(d) of Count IV of the plaintiffs’ complaint are denied.
“(7) The plan’s preliminary objections to Count V of the plaintiffs’ complaint are granted. However, plaintiffs are granted 20 days to amend their complaint within the confines of this opinion or alternatively to proceed without the stricken counts.
“(8) The plan’s preliminary objections to paragraphs 39, 99, 100 and subparagraphs 112(p), (f), (r) and (u) of the plaintiffs’ complaint are denied.”

The parties are to proceed in a manner consistent with the memorandum and order.