LESLIE L. MYERS, NAOMI J. MANALO and OLIVER A. MANALO, on behalf of themselves and all others similarly situated, Plaintiffs,
TRAVELERS COMMERCIAL INSURANCE COMPANY, Defendant.
Submitted Date: October 27, 2014
Upon Defendant Travelers Commercial Insurance Company's Motion to Dismiss Plaintiffs' Complaint Pursuant to Super. Ct. Civ. R. 12(b)(1) and 12(b)(6):
John S. Spadaro, Esquire, John Sheehan Spadaro, LLC, Attorney for Plaintiffs.
Matthew A. Goldberg, Esquire (pro hac vice) (argued), DLA Piper LLP US, One Liberty Place, Nancy Shane Rappaport, Esquire, Brian A. Biggs, Esquire, DLA Piper U.S. LLP-Wilmington, Attorney for Defendant Travelers.
Jan R. Jurden, President Judge.
Leslie L. Myers, Naomi J. Manalo, and Oliver A. Manalo (and others similarly situated) ("Plaintiffs") seek a declaration that Defendant Travelers Commercial Insurance Company ("Travelers") has acted improperly and in violation of Delaware law by adopting a practice under 21 Del. C. § 2118B whereby it unlawfully delays processing, payment, and denial of claims for Personal Injury Protection ("PIP"). Plaintiffs also seek a declaration that this practice constitutes a repudiation of the contractual obligations owed by Travelers to its Delaware automobile policyholders.
Travelers has filed a Motion to Dismiss Plaintiffs' Complaint Pursuant to Superior Court Civil Rule 12(b)(1) and 12(b)(6) for failure to state a claim upon which relief can be granted. Travelers argues that Plaintiffs lack standing to bring the lawsuit because they have failed to plead any injury in fact and, in the absence of any personalized harm, Plaintiffs' claim for declaratory relief does not present a live case or controversy that is ripe for adjudication.
Travelers is a prolific underwriter of automobile insurance in Delaware, including first-party medical benefits for persons injured while driving or occupying motor vehicles. Plaintiffs are named insureds under automobile insurance policies issued by Travelers.
21 Del. C. § 2118B governs the processing and payment of insurance benefits for personal injury protection. The purpose of § 2118B "is to ensure reasonably prompt processing and payment of sums owed by insurers to their policyholders and other persons covered by their policies . . . and to prevent the financial hardship and damage to personal credit ratings that can result from the unjustifiable delays of such payments." § 2118B(c) requires insurers to pay or deny a claim for first-party benefits "no later than 30 days following the insurer's receipt of . . . written request for first-party insurance benefits and documentation that the treatment or expense is compensable . . . ." If an insurer fails to comply with this requirement, then the amount of unpaid benefits due from the insurer to the claimant is increased.
Plaintiffs allege that Travelers has improperly "adopt[ed] a practice whereby it fails and refuses to either (a) reach a coverage determination on its insured's PIP claims, or (b) communicate such a determination to its insured, within the statutorily-required 30-day period under 21 Del. C. § 2118B."
Plaintiffs seek a declaration that Travelers improperly exempts itself from the statutory 30-day period by routinely withholding coverage determinations pending results of independent medical examinations ...