THE ONE JAMES PLAZA CONDOMINIUM ASSOCIATION, INC. v. RSUI GROUP, INC., No. 1:2015cv00294 - Document 19 (D.N.J. 2015)
Court Description: OPINION filed. Signed by Judge Joseph H. Rodriguez on 12/1/2015. (drw)
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THE ONE JAMES PLAZA CONDOMINIUM ASSOCIATION, INC. v. RSUI GROUP, INC. Doc. 19 UNITED STATES DISTRICT COURT DISTRICT OF NEW J ERSEY THE ONE J AMES PLAZA : CONDOMINIUM ASSOCIATION, INC., Plaintiff, : v. Hon. J oseph H. Rodriguez Civil Action No. 15-294 : RSUI GROUP, INC., : Defendant. OPINION : This insurance coverage m atter is before the Court on Defendant RSUI Group, Inc.’s (“RSUI”) Motion [Doc. 9] to Dism iss the Verified Com plaint filed by Plaintiff The One J am es Plaza Condom inium Association, Inc. (“OJ PCA”). The m atter was decided on the papers pursuant to Fed. R. Civ. P. 78(b). For the reasons set forth below, the m otion will be granted. Backgro u n d Plaintiff OJ PCA operates condom inium s known as One J am es Plaza in Wildwood, New J ersey and a non-profit rental business servicing those condom inium s known as the Trylon Motel. From September 17, 20 10 through Septem ber 17, 20 12, OJ PCA was insured by Great Am erican Insurance Group (“Great American”). 1 Dockets.Justia.com On September 24, 20 10 , twenty condom inium unit owners 1 sued OJ PCA & its board of directors in Cape May County Superior Court, Law Division, CPM-L-646-10 (“Lawsuit 1”). They alleged that: 1) OJ PCA and the Trylon Motel failed to allow individual unit owners the opportunity to inspect financial records; 2) OJ PCA made several capital expenditures without holding m eetings or conducting a vote; 3) OJ PCA decisions were announced without following OJ PCA bylaws; 4) OJ PCA violated its own governing laws; 5) OJ PCA failed to utilize alternative dispute resolution; and 6) invasion of privacy. The sam e day, OJ PCA filed an insurance claim with the Great Am erican to recoup losses and the costs of defending Lawsuit 1. On October 28, 20 10 , the Com plaint in Lawsuit 1 was am ended to rem ove eighteen of the plaintiffs, leaving only Eugene and Kathy Colsher as plaintiffs. The Cape May County Superior Court transferred Lawsuit 1 from the Law Division to the Chancery Division, as CPM-C-60 -10 , on December 3, 20 10 . 2 J ames Klapm uts, Bruce & Fran Barlow, J ames & Sherry Gallo, Eugene & Kathy Colsher, Elaine & Paul Midiri, Victor & Donna Molinari, Peter & Eileen J askelewicz, Paul & Lucille Stanziale, Anthony & Diana Buono, Richard & Kathy Finn Allen, Mike McFadden. 2 OJ PCA filed another claim with Great Am erican on May 12, 20 12 seeking coverage for all losses and costs of defense associated with Lawsuit 1. This claim was denied because the policy was a claim s-m ade policy and the actual claim related back to the policy in effect September 17, 20 10 -11. 1 2 The Colshers & OJ PCA signed and filed a Stipulation of Settlem ent dism issing Lawsuit 1 with prejudice on J anuary 23, 20 13. The Stipulation stated, in part, “As set forth in Paragraph 6 of the Order dated August 11, 20 11, each party shall continue the right to assert claim s which have arisen since the filing of the m ost recent amended com plaint in subsequent litigation [so any claim that arose after 10 / 28/ 20 10 ].” Great Am erican closed the claim in March of 20 12, having spent approximately $ 57,0 0 0 in defense fees. From Septem ber 17, 20 12 to September 17, 20 13, Defendant RSUI insured OJ PCA via a claim s m ade Directors and Officers Liability Policy, NHP648145. The Policy included a Specific Litigation exclusion, which stated “The Insurer shall not be liable to m ake any payment for Loss arising out of or in connection with any Claim m ade against any Insured alleging, arising out of, based upon or attributable to, directly or indirectly, in whole or in part, the following litigation: Gene and Kathy Colsher.”3 On April 4, 20 13, eight unit owners 4 including Eugene and Kathy Colsher, “individually and derivatively on behalf of” OJ PCA, sued seven The Colshers were the only rem aining plaintiffs in the Lawsuit 1 when it settled on J anuary 18, 20 13. 4 Pete & Eileen J askelewicz, Elaine & Paul Midiri, Paul & Lucille Stanziale, and Eugene & Kathy Colsher. 3 3 OJ PCA board m embers and m anagers of the Trylon Motel, again in Cape May County, CPM-C-21-13 (“Lawsuit 2”). 5, 6 They alleged that the defendants were maintaining a for-profit rental business within OJ PCA which was detrimental to the non-profit status of OJ PCA, and that rental funds and m anagerial responsibilities of the Trylon Motel were com m ingled with those of OJ PCA. Lawsuit 2 seeks: 1) judgm ent declaring OJ PCA usage fees invalid and declaring that the plaintiffs were in good standing regarding all outstanding fees and dues owed; 2) a permanent injunction barring the defendants and OJ PCA from participating in their The sam e day, OJ PCA filed a claim with Great Am erican seeking coverage for all losses and defense costs associated with Lawsuit 2. Great American denied coverage September 13, 20 13, finding that the “Claim ” contained in the suit was first made against its Insureds when the Complaint was served on May 3, 20 13, outside of the Great Am erican policy period. 6 The Com plaint in Lawsuit 2 was am ended May 14, 20 13 to nam e OJ PCA as a Defendant and again August 14, 20 13 to add the Trylon Motel as a Defendant. On October 15, 20 13, the Com plaint in Lawsuit 2 was am ended a third tim e to include additional allegations and docum ents regarding the rental business operated by the Trylon Motel at The One J am es Plaza. On December 5, 20 13, the Presiding J udge, Chancery Division, after receiving subm issions from the parties and hearing oral argum ent, entered an Order in Lawsuit 2: 1) vacating a 11/ 15/ 20 14 Order “entered in error”; 2) granting in part and denying in part the plaintiffs’ m otion to amend their pleadings; 3) denying the plaintiff’s application for appointment of receiver; 4) denying the plaintiff’s application to invalidate 20 12 “assessment” or usage fee; 5) granting in part and denying in part the defendants’ m otion to dism iss plaintiffs’ pleading; 6) dism issing J ay and Louise Meehan as defendants; 7) deem ing the plaintiffs in good standing provided they deposited into their attorney’s trust account “the sum s of the disputed assessments.” 5 4 for-profit unlicensed rental activities; 3) appointment of a receiver to wind down the rental business; and 4) award of costs and fees for plaintiffs but denial of such for defendants. In August 20 13, OJ PCA subm itted a claim seeking coverage by the RSUI policy for all losses and costs of defense associated with Lawsuit 2. RSUI denied coverage August 21, 20 13 and again Septem ber 11, 20 13, citing the Specific Litigation Exclusionary Provision, and finding that the Insured knew or should have known that the RSUI Policy excluded any litigation related to the Colsher’s original action, Lawsuit 1. 7 In essence, RSUI determ ined that Lawsuit 2 arose out of, was based upon, and attributable to Lawsuit 1, and therefore is excluded under the Specific Litigation exclusion of the RSUI Policy. In a letter dated August 21, 20 13, RSUI explained: Prior to the filing of [Lawsuit 2], the Association settled a prior suit [Lawsuit 1] with Association m embers Gene and Kathy Colsher, who are nam ed Plaintiffs in [Lawsuit 2]. The Colshers filed [Lawsuit 1] in September 20 10 , alleging that the Association intended to present financial records to all Association m em bers, but never offered the records for review. The com plaint in [Lawsuit 1] details the Colshers’ attem pts to review the docum ents, in addition to the efforts of Pete and Eileen J askelewicz, Paul and Elaine Midiri, and Paul and Lucille Stanziale (all nam ed Plaintiffs in [Lawsuit 2]) to review the docum ents. RSUI also referenced Lawsuit 1 as a pending claim on OJ PCA’s supplem ental claims application, the inclusion of which resulting in the claim having been m ade under the expiring policy and therefore not subject to coverage by RSUI. 7 5 The [Lawsuit 1] com plaint states that the Colshers attended a m eeting in October 20 0 5, which the Association board called to present financial docum ents to finalize the separation of the Association’s business from the Trylon rental business. Both businesses were operating on the same property and the Colshers alleged that the Association directors created a conflict of interest by operating both the Trylon rental business and the Association. According to the [Lawsuit 1] com plaint, the Colshers renewed their requests verbally and via em ail several tim es in the years following. To this day, the businesses have not been separated. In [Lawsuit 1], the plaintiffs were concerned about whether the board was com ingling the assets of the two businesses. The plaintiffs were concerned that their Association fees were subsidizing the rental business, which was an even greater concern when the Association im posed a higher assessm ent on owners to m ake up for a $ 42,0 0 0 shortfall. The plaintiffs were suspicious of the increased assessment because the Association failed to adequately describe how the shortfall developed. The inability to access records m ade the Colshers question whether expenses that should be charged to the Trylon rental business were actually being charged to the Association. The Colshers also com plained that the Association was allowing Trylon guests to use Association com m on areas at the expense of the Association m em bers, further putting at issue the directors’ conflicting interests. The conflicts of interests are still prevalent, as [Lawsuit 2] alleges that the “individuals in control have favored putting the guests into their units at the expense of other owners participating in the rental program .” * * * The same core allegations run through both [Lawsuit 2] and [Lawsuit 1]. The first core allegation is the Plaintiffs’ concerns that the Association’s directors were co-m ingling the assets of the Association and the Trylon rental business. [Lawsuit 1] expresses these concerns and contains a detailed account of the Colshers’ attem pt to obtain relevant records to show separate accounting between the Association and the Trylon rental 6 business. The second core allegation is the use of com m on areas by renters, to the detrim ent of owners, and the use of Association fees to support the rental business and im provem ents to the com m on areas. Finally, the third core allegation detailed the Association’s directors’ discrim ination against those owners who do not participate in the rental program , specifically by noting that rental units received im provem ents, presum ably with com m on Association funds, where non-rented units did not receive the im provem ents. Specifically, both lawsuits allege that the Association’s directors were unable to put the best interests of the owners ahead of the directors’ personal profits. OJ PCA filed this declaratory judgment action against RSUI in Cape May County, CPM-L-623-14, seeking coverage for Lawsuit 2. The case was subsequently rem oved to this Court based upon diversity jurisdiction. Count I seeks a declaration: 1) that the Specific Litigation exclusionary provision in the RSUI policy is inapplicable (as is the Prior and Pending Litigation exclusion) because it is overbroad, and 2) compelling specific perform ance to require RSUI to extend coverage to OJ PCA for all claim s m ade regarding all litigation having com m enced after April 4, 20 13, when Lawsuit 2 was filed. Count II alleges unjust enrichment in that RSUI wrongly retained prem ium s paid by OJ PCA but denied coverage and Count III asserts bad faith arising from RSUI’s alleged breach of the im plied covenant of good faith and fair dealing in denying coverage. 7 Ju ris d ictio n The Court has subject m atter jurisdiction over this m atter pursuant to 28 U.S.C. § 1332, the diversity jurisdiction statute, which provides that: “[t]he district courts shall have original jurisdiction of all civil actions where the m atter in controversy exceeds the sum or value of $ 75,0 0 0 , exclusive of interest and costs, and is between [c]itizens of different States[.]” 28 U.S.C. § 1331(a)(1). Plaintiff The One J ames Plaza Condom inium Association is a New J ersey non-profit corporation with its principal place of business located in Wildwood, New J ersey. Defendant RSUI Group, Inc. is a Delaware corporation with its principal place of business located in Atlanta, Georgia. As such, com plete diversity exists between the parties. Moreover, the am ount in controversy in this dispute is alleged to exceed $ 75,0 0 0 . Le gal Stan d ard When considering a m otion to dism iss a com plaint under Rule 12(b)(6) for failure to state a claim , “[f]irst, the court m ust take note of the elements a plaintiff m ust plead to state a claim .” Malleus v. George, 641 F.3d 560 , 563 (3d Cir. 20 11) (citation and internal quotation m arks om itted). Then the court m ust determ ine if a claim has facial plausibility, a threshold that can be reached only when a plaintiff pleads factual content— as opposed to m ere conclusions—allowing the court to “draw the 8 reasonable inference that the defendant is liable for the m isconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9). Although the court “m ust accept the allegations in the [c]om plaint as true, [it is] not com pelled to accept unsupported conclusions and unwarranted inferences, or a legal conclusion couched as a factual allegation.” Morrow v. Balaski, 719 F.3d 160 , 165 (3d Cir. 20 13) (quoting Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 20 0 7)) (internal quotation m arks om itted). “Although a district court m ay not consider m atters extraneous to the pleadings, a document integral to or explicitly relied upon in the com plaint m ay be considered without converting the m otion to dism iss into one for sum m ary judgment.” U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 20 0 2) (internal quotation m arks and citations om itted) (em phasis deleted). That is, “a court m ay consider an undisputedly authentic docum ent that a defendant attaches as an exhibit to a m otion to dism iss if the plaintiff's claim s are based on the docum ent.” Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993) (internal citations om itted). In addition, a court m ay take judicial notice of public records. M & M Stone Co. v. Pa. Dept. of Envt’l Prot., 388 F. App'x 156, 162 (3d Cir. 20 10 ). As such, the Court need not convert Defendant’s m otion to dism iss into a sum m ary judgment m otion here. 9 D is cu s s io n Through the instant m otion, Defendant m oves to dism iss the entirety of Plaintiff’s Com plaint. In Count I, Plaintiff OJ PCA requests the Court to declare that Defendant RSUI was required to provide it with insurance coverage for Lawsuit 2 in New J ersey state court. As stated above, Count II alleges unjust enrichm ent that RSUI retained prem ium s paid by OJ PCA yet denied coverage and Count III asserts bad faith arising from RSUI’s alleged breach of the im plied covenant of good faith and fair dealing when it declined to provide coverage for the civil suit. RSUI bases its m otion on the prem ise that, under the express term s of the Policy, it was not required to provide coverage for Lawsuit 2 because Lawsuit 2 essentially is a continuation of Lawsuit 1, thereby precluded by the Specific Litigation exclusion contained in the Policy. OJ PCA opposes the motion, and argues that the claim s asserted against it in Lawsuit 2 are new claim s, separate and apart from those previously litigated. According to OJ PCA, Lawsuit 1 was directed at its Association for the type of com m on disputes that arise between condom inium associations and unit owners regarding daily operations, whereas Lawsuit 2 targets the Trylon Motel’s “illegal rental activities” sanctioned by OJ PCA. 10 Under New J ersey law, “[i]nsurance coverage is a m atter of contract law determ ined by the language of insurance agreements.” Ayala v. Assured Lending Corp., 80 4 F. Supp. 2d 273, 281 (D.N.J . 20 11) (citing Longobardi v. Chubb Ins. Co. of N.J ., 582 A.2d 1257, 1260 (N.J . 1990 )). When the policy’s language is clear and unam biguous, the court is bound to enforce it according to its plain and ordinary meaning. Stafford v. Scottsdale Ins. Co., 416 F. App’x 191, 194 (3d Cir. 20 10 ) (citing Voorhees v. Preferred Mut. Ins. Co., 60 7 A.2d 1255, 1260 (N.J . 1992)). If there is any am biguity with regard to wording in the policy, however, the language should be “construed liberally in the insured’s favor.” Ayala, 80 4 F. Supp. 2d at 281 (citing Longobardi, 582 A.2d at 1260 ); see also Zurich Am . Ins. Co. v. Keating Bldg. Corp., 513 F. Supp. 2d 55, 64 (D.N.J . 20 0 7). “A provision of an insurance policy is am biguous if reasonably intelligent [persons] on considering it in the context of the entire policy would honestly differ as to its m eaning.” Vlastos v. Sum itom a Marine Fire Ins. Co., 70 7 F.2d 775, 778 (3d Cir. 1983). Moreover, when analyzing an insurance policy, the court m ust view it from the perspective of an average policyholder. Zurich, 513 F. Supp. 2d at 69; Morrison v. Am. Int’l Ins. Co. of Am ., 887 A.2d 166, 169 (N.J . Super. Ct. App. Div. 20 0 5). 11 Here, the insurance policy agreem ent between RSUI and OJ PCA, Policy Num ber NHP648145, begins by stating: THIS IS A CLAIMS MADE AND REPORTED POLICY THAT APPLIES ONLY TO THOSE CLAIMS FIRST MADE AGAINST THE IN SU RED DURING THE POLICY PERIOD THAT ARE REPORTED TO THE IN SU RER DURING THE POLICY PERIOD OR WITHIN SIXTY (60 ) DAYS THEREAFTER . . . . PLEASE READ YOU R POLICY CAREFU LLY. In New J ersey, “the event that invokes coverage under a ‘claim sm ade’ policy is the transm ittal of notice of the claim to the insurance carrier.’” Zuckerm an v. Nat'l Union Fire Ins. Co., 495 A.2d 395, 40 6 (N.J . 1985). The Declarations Page of the Policy here indicates that the Policy Period spanned from September 17, 20 12 through September 17, 20 13. Loss is defined by the Policy to include both dam ages and Defense Expenses, but the Policy also clarifies that RSUI has a duty “to defend any Claim against the Insured for w hich coverage applies.” (Em phasis added.) Further, the Policy provides “[t]he Insurer shall not be liable to m ake any payment for Loss in connection with any Claim m ade against any Insured”: Alleging, arising out of, based upon or attributable to, directly or indirectly, the sam e or essentially the same facts underlying or alleged in any matter which, prior to the inception date of this policy, has been the subject of notice to any insurer of a Claim , or a potential or threatened Claim or an occurrence or circum stance that m ight give rise to a Claim under any policy of which this insurance is a renewal or replacement or which it m ay succeed in tim e. [Claims Reported to a Prior Carrier Exclusion.] 12 Alleging, arising out of, based upon or attributable to, in whole or in part, any litigation involving any Insured that was com m enced or initiated prior to, or was pending at the inception date of this policy, or arising out of or based upon, in whole or in part, any facts or circumstances underlying or alleged in any such prior or pending litigation. Further, The Insurer shall not be liable to m ake any payment for Loss arising out of or in connection with any Claim m ade against any Insured alleging, arising out of, based upon or attributable to, directly or indirectly, in whole or in part, the following litigation: Gene and Kathy Colsher. [Specific Loss Exclusion.] RSUI argues that coverage for Lawsuit 2 was barred by these exclusion provisions. Exclusion provisions in insurance policies should be strictly construed against the insurer. Flomerfelt v. Cardiello, 997 A.2d 991, 99697 (N.J . 20 10 ). Coverage should only be excluded if the insurer can show a substantial overlap between the facts and claim s alleged in prior and subsequent actions. See Federal Ins. Co. v. Raytheon Co., 426 F.3d 491, 499 (1st Cir. 20 0 5) (For claim s “based upon, arising from , or in consequence of any dem and, suit or other proceeding pending” prior to the effective date, “or the sam e or any substantially sim ilar fact, circum stance or situation underlying or alleged therein” it was not required that the first action provide the sole support for the second,” but rather that “the 13 allegations in the second com plaint find substantial support in the first com plaint,” m eaning that “the allegations of the second com plaint substantially overlap with those of the first.”) RSUI has argued that the parties are com m on to both m atters, as are certain core allegations. For instance, the plaintiffs in both actions allege that OJ PCA failed to disclose financial inform ation to its m embers upon request. Plaintiffs in both actions allege that OJ PCA m aintains the Trylon Motel rental business to the detrim ent of owners who did not rent out their units. The plaintiffs in both cases allege unsuccessful attem pts at separating the business of OJ PCA from the rental business of the Trylon Motel. Both actions com plain of the com m ingling of assets and im proper use of the property, further asserting the illegality of the rental business to the detrim ent of non-renting owners. A review of the complaints filed in both actions indicates that Lawsuit 2 arose from and was based upon the sam e set of factual allegations and claim s m ade in Lawsuit 1. Both suits involved the sam e parties and sim ilar claim s. The overlap of factual allegations between the two lawsuits is substantial enough to find that Lawsuit 1 served as a “foundation and logical basis” for the Lawsuit 2. The pleadings in both underlying actions need not have been identical to preclude coverage. 14 Given the substantial overlap of factual allegations and causes of action in the two underlying suits, the Court finds that, based on the express language of the Specific Loss exclusion provision, Lawsuit 2 arose out of or in connection with claim s m ade against OJ PCA “alleging or arising out of, based upon or attributable to, directly or indirectly, in whole or in part,” Lawsuit 1 that took place prior to the start of the Policy Period. 8 As such, RSUI was not required to provide OJ PCA with coverage for Lawsuit 2. Further, the Claim s in the two lawsuits are sufficiently interrelated to trigger exclusion from coverage pursuant to other exclusions contained in the Policy. Accordingly, Defendant’s request to dism iss Count I of Plaintiff’s Com plaint will be granted. Next, as to Count II, “[t]o establish a claim for unjust enrichm ent, ‘a plaintiff m ust show both that defendant received a benefit and that retention of that benefit without payment would be unjust.’ That quasicontract doctrine also ‘requires that plaintiff show that it expected rem uneration from the defendant at the tim e it perform ed or conferred a The phrase “arising out of” “which appears frequently in insurance policies, has been interpreted expansively by New J ersey courts in insurance coverage litigation.” Am erican Motorists Ins. Co. v. L-C-A Sales Co., 713 A.2d 10 0 7, 10 10 (N.J . 1998). “Arising out of” m eans “conduct ‘originating from,’ ‘growing out of’ or having a ‘substantial nexus’ with the activity for which coverage is provided.” Id. (citations om itted). 8 15 benefit on defendant and that the failure of rem uneration enriched defendant beyond its contractual rights.’” Iliadis v. Wal-Mart Stores, Inc., 922 A.2d 710 , 723 (N.J . 20 0 7) (quoting VRG Corp. v. GKN Realty Corp., 641 A.2d 519 (N.J . 1994)). Accordingly, to state a claim for unjust enrichment under New J ersey law, OJ PCA m ust plead that RSUI was enriched in an unjust m anner not governed by any enforceable contract. The parties’ rights and obligations in this case, however, are governed by their valid insurance contract. OJ PCA does not allege that it conferred any benefit on RSUI other than by paying its policy prem ium s. As such, OJ PCA has not adequately pled a benefit that is unjust; rather, as pled, OJ PCA received the benefit of its bargain, despite that its insurance claim was denied. The Court is m indful that federal law perm its alternative pleading of claims; however, Plaintiff’s unjust enrichment claim fails as a m atter of law and m ust be dism issed. Regarding Count III, to state a claim for bad faith denial of insurance coverage, Plaintiff m ust show: (1) the insurer lacked a reasonable basis for its denying benefits, and (2) the insurer knew or recklessly disregarded the lack of a reasonable basis for denying the claim . Pickett v. Lloyd’s, 621 A.2d 445 (N.J . 1993). Such bad faith claim s are to be analyzed in light of a “fairly debatable” standard, which posits that “[i]f a claim is ‘fairly debatable,’ no 16 liability in tort will arise.” Pickett, 621 A.2d at 453. The “fairly debatable” standard will be met if the claim ant could have established as a m atter of law a right to sum m ary judgm ent on the substantive claim . Id. As a m atter of law, a claim of bad faith m ust fail if there is an issue of m aterial fact as to the underlying claim regarding Plaintiff’s entitlem ent to insurance benefits. See Tarsio v. Provident Ins. Co., 10 8 F. Supp. 2d 397, 40 1 (D.N.J . 20 0 0 ). Thus, when the insured’s com plaint presents issues of m aterial fact as to the underlying claim , dism issal of a related bad faith claim is proper. Fuscarello v. Com bined Ins. Group, Ltd., 20 11 WL 4549152, at *5 (D.N.J . Sept. 29, 20 11) (dism issing plaintiff’s bad faith claim on a m otion to dism iss where insurer’s reason for refusing to pay, as alleged in the com plaint, presented disputed issues of m aterial fact as to the underlying substantive claim ); Dare Inv., LLC v. Chicago Title Ins. Co., 20 11 WL 260 0 594, at * 12 (D.N.J . J une 29, 20 11) (dism issing plaintiffs bad faith claim because plaintiff could not prevail on sum mary judgm ent for the underlying insurance claim due to the am biguity of the title policy at issue and the plaintiff’s reasonable expectations thereunder). Here, RSUI’s denial of coverage, as evidenced in the denial letter dated August 21, 20 12 and quoted above, provided an extensive explanation as to why OJ PCA’s claim did not fall within the coverage of the RSUI Policy. 17 Such explanation provides plausible reasons for the denial of coverage and dem onstrates that there are, at the very least, genuine questions regarding whether Plaintiff’s claim s fell within the coverage provided. Accordingly, OJ PCA’s claim under the Policy was fairly debatable and cannot form the basis of a bad faith claim . RSUI’s m otion to dism iss Count III will be granted. An appropriate Order will issue this date. Dated: December 1, 20 15 / s/ J oseph H. Rodriguez J OSEPH H. RODRIGUEZ U.S.D.J . 18
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