UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Province Lake Golf Enters., Inc., and PLG Holding LLC

v. Civil No. 20-cv-309-JD Opinion No.

Philadelphia Indemnity Ins. Co.

O R D E R

Province Lake Golf Enterprises, Inc., and PLG Holding LLC

(collectively, “PLG”) brought this insurance coverage action

against Philadelphia Indemnity Insurance Company. PLG alleges

claims for breach of contract and claims for violations of the

Maine Unfair Claims Settlement Practices Act, 24-A Me. Rev.

Stat. Ann. (“M.R.S.A.”) § 2436-A; the New Hampshire Unfair

Insurance Trade Practices Act, RSA Chapter 417; the Maine Unfair

Trade Practices Act, 5 M.R.S.A. § 205-A; and the New Hampshire

Consumer Protection Act, RSA 358-A:2.

Philadelphia Indemnity moves to dismiss (doc. no. 8) the

Amended Complaint in part. Specifically, Philadelphia Indemnity

moves to dismiss PLG Holding LLC as a plaintiff for lack of

standing and moves to dismiss Counts II and III of the Amended

Complaint for failure to state a claim upon which relief can be

granted. PLG objects to dismissal. Standard of Review

In considering a motion to dismiss under Federal Rule of

Civil Procedure 12(b)(6), the court asks whether the plaintiff

has made allegations that are sufficient to render his

entitlement to relief plausible. Manning v. Boston Med. Ctr.

Corp.,

(1st Cir. 2013). The court accepts all

well-pleaded facts as true and draws all reasonable inferences

in the non-moving party’s favor. Hamann v. Carpenter,

(1st Cir. 2019). The court disregards conclusory

allegations that simply parrot the applicable legal standard.

Manning,

. To determine whether a complaint

survives a motion to dismiss, the court should use its “judicial

experience and common sense,” but should also avoid disregarding

a factual allegation merely because actual proof of the alleged

facts is improbable.

Background

A. Province Lake Golf

Province Lake Golf is an eighteen-hole golf course located

in Parsonsfield, Maine, and Effingham, New Hampshire. Plaintiff

PLG Holding LLC owns one part of the property, all of which is

located in Parsonsfield. The property owned by PLG Holding LLC

included a building that was used as a clubhouse, restaurant,

and pro shop (the “clubhouse building”). Non-party Edge Lake

2 Associates LLC owns other parts of the golf course located in

both Parsonsfield and Effingham.

Plaintiff Province Lake Golf Enterprises (“PLG

Enterprises”) is an operating entity that leases the properties

from PLG Holding LLC and Edge Lake Associates LLC. PLG

Enterprises obtained insurance for the property through an

insurance agent in North Conway, New Hampshire. The same family

controls all the entities.

B. Clubhouse Fire & Replacement Coverage Claim

Late on March 7, 2018, a fire started at the clubhouse

building. The fire continued through the early morning of March

8, resulting in the building’s destruction. PLG notified its

insurance agent about the fire on March 8. PLG filed claims

under several different coverages, including a claim for the

replacement cost of the clubhouse building.

Philadelphia Indemnity hired Peter Riesbeck and Brian

Vanderhoff to provide a valuation of the loss and cost of

replacement. Risebeck told PLG that the claim should not exceed

$1.977 million or PLG would face a co-insurance penalty. On

March 31, Philadelphia Indemnity, based on evaluations from

Riesbeck and Vanderhoff, “reserved” a replacement estimate of

approximately $1.99 million. Doc. 5 ¶ 49.

3 Additionally, Philadelphia Indemnity asserted that it would

withhold approximately $570,000 of its estimate amount as a

“depreciation holdback.” Philadelphia Indemnity told PLG that

the depreciation holdback amount would be paid when the rest of

the payment amount was spent. Philadelphia Indemnity made its

first payout, for $150,000, to PLG in April 2018.

In early May 2018, PLG filed a preliminary statement of

loss, claiming a $2.97 million replacement cost for the

building. Doc. 5 ¶ 44. Philadelphia Indemnity accepted PLG’s

loss amount for the building and property in July 2018.

Philadelphia Indemnity, however, maintained that a depreciation

holdback of approximately twenty-eight percent ($830,564) should

apply. Philadelphia Indemnity made a payment of $750,000 in May

2018 and a payment of $730,000 in August 2018.

PLG alleges that a full payment for the loss was due within

thirty days of the statement of loss’s submission and an

agreement on the amount of loss. PLG alleges that it and

Philadelphia Indemnity agreed that the loss was at least $1.99

million in May 2018 and that they agreed the loss was

approximately $2.97 million in July 2018. PLG asserts that

Philadelphia Indemnity failed to pay the amount due within

thirty days. PLG also asserts that Philadelphia Indemnity

improperly withheld $830,564 as a depreciation holdback.

4 C. Co-Insurance Penalty

In addition to delaying payment, PLG alleges that

Philadelphia Indemnity overinflated the value of other

structures/improvements on the property, which were undamaged by

the fire, for the purpose of increasing or creating a co-

insurance penalty and reducing the amount owed by Philadelphia

Indemnity. PLG alleges that Philadelphia Indemnity also

misrepresented the applicable terms of the policy by insisting

that the value of an irrigation system that was exempted from

coverage counted for purposes of determining the co-insurance

penalty.

D. Other Coverages Claims

PLG further alleges misconduct in Philadelphia Indemnity’s

handling of claims stemming from the fire under coverages other

than replacement cost coverage for the clubhouse building. For

example, PLG alleges that Philadelphia Indemnity delayed paying

a claim under business personal property coverage for several

months after agreeing to the amount of loss. PLG alleges that

Philadelphia Indemnity delayed payment to leverage a settlement

of the claims on favorable terms. PLG alleges that Philadelphia

Indemnity similarly delayed or refused payment under coverages

for business interruption, commercial inland marine property,

5 computers, building demolition, personal effects, fine arts, and

property of others.

E. Claims

PLG’s Amended Complaint contains three counts. In Count I,

PLG alleges that Philadelphia Indemnity breached the insurance

contract. In Count II, PLG brings claims under both the Maine

Unfair Claims Settlement Practices Act, 24-A M.R.S.A. § 2436-A

(“Count II-ME”) and the New Hampshire Unfair Insurance Trade

Practices Act, RSA Chapter 417 (Count II-NH). In Count III, PLG

brings claims under the Maine Unfair Trade Practices Act,

5 M.R.S.A. § 205-A (“Count III-ME”) and the New Hampshire

Consumer Protection Act, RSA 358-A:2 (“Count III-NH”).

Discussion

Philadelphia Indemnity moves to dismiss PLG Holding LLC as

a plaintiff for lack of standing. Philadelphia Indemnity also

moves to dismiss all parts of Counts II and III of the Amended

Complaint. PLG objects to dismissal of PLG Holding LLC and to

dismissal of Counts II and III. Philadelphia Indemnity replied

and PLG filed a surreply.

A. PLG Holding LLC’s Standing

Philadelphia Indemnity argues that PLG Holding LLC lacks

standing to bring any claims based on the insurance contract

6 because PLG Holding LLC was not listed as a named insured on the

named insureds schedule, which Philadelphia Indemnity attached

to its motion to dismiss.1 PLG responds, arguing that PLG

Holding LLC is an intended insured under the contract. PLG

argues that “Province Lake Holdings LLC” is listed on the named

insureds schedule, and it argues that “Province Lake Holdings,

LLC” is meant to be PLG Holding LLC but Philadelphia Indemnity

mistakenly wrote the wrong name when creating the schedule.2

The Constitution requires that a party bringing suit have

standing to bring the suit, that is, “such a personal stake in

the outcome of the controversy as to assure that concrete

adverseness which sharpens the presentation of issues upon which

the court so largely depends.” Katz v. Pershing, LLC,

(1st Cir. 2012) (quoting Baker v. Carr,

, 204

1 Ordinarily, when considering a motion to dismiss the court is limited to the facts alleged in the pleadings, but when jurisdiction is challenged the court may consider materials outside the pleadings. See Skwira v. United States,

(1st Cir. 2003).

2 In its reply, Philadelphia Indemnity offered to withdraw its argument that PLG Holding LLC lacked standing if PLG stipulated “that the entity named in the Policy, Province Lake Holdings, LLC, is not a separate and distinct entity intended to be insured by the Policy, but rather is a misnomer for PLG Holding LLC, which is the entity that Plaintiffs intended to insure.” Doc. 10 at 2. PLG filed a surreply, but did not indicate whether it agreed to Philadelphia Indemnity’s stipulation. With no indication from PLG or Philadelphia Indemnity that the condition for withdrawing the argument is met, the court does not deem Philadelphia Indemnity’s argument withdrawn.

7 (1962)). Standing has three elements: injury in fact,

causation, and redressability.

. “[S]tanding also

has prudential dimensions,” which require the plaintiff to show,

inter alia, “that his claim is premised on his own legal rights

. . . .”

. In this case, Philadelphia Indemnity’s

challenge to PLG Holding LLC’s standing is premised on the

ground that a non-party to a contract does not have a legal

right to enforce it. See DiMillo v. Travelers Prop. Cas. Co. of

Amer.,

(D. Me. 2011).

One of the entities listed on the additional insureds

schedule, “Province Lake Holdings, LLC”, is highly similar to

“PLG Holding LLC”. PLG contends that “Province Lake Holdings

LLC” is a misnomer and is meant to refer to PLG Holding LLC.

The facts alleged in the Amended Complaint support PLG’s

contention: PLG Holding LLC owned the property covered by the

insurance agreement, PLG Holding LLC contracted with PLG

Enterprises to lease and manage the property, and PLG

Enterprises, consistent with its arrangement with PLG Holding

LLC, insured the property and made a claim to Philadelphia

Indemnity after the fire. From these facts, it can be

reasonably inferred that the additional insured on the policy

identified as “Province Lake Holdings LLC” is a misnomer for

“PLG Holding LLC.” Therefore, Philadelphia Indemnity’s motion

to dismiss is denied as to PLG Holding LLC’s standing.

8 B. Count II-ME (Maine Unfair Claims Settlement Practices Act)

In Count II-ME, PLG alleges that Philadelphia Indemnity

violated the Maine Unfair Claims Settlement Practices Act, 24-A

M.R.S.A. § 2436-A. Under the Maine Unfair Claims Settlement

Practices Act the following acts are prohibited:

A. Knowingly misrepresenting to an insured pertinent facts or policy provisions relating to coverage at issue; B. Failing to acknowledge and review claims, which may include payment or denial of a claim, within a reasonable time following receipt of written notice by the insurer of a claim by an insured arising under a policy; C. Threatening to appeal from an arbitration award in favor of an insured for the sole purpose of compelling the insured to accept a settlement less than the arbitration award; D. Failing to affirm or deny coverage, reserving any appropriate defenses, within a reasonable time after having completed its investigation related to a claim; or E. Without just cause, failing to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear. 24-A M.R.S.A. § 2436-A(1). The statute defines “without just

cause” as refusing “to settle claims without a reasonable basis

to contest liability, the amount of any damages or the extent of

any injuries claimed.” Id. § 2436-A(2).

Philadelphia Indemnity contends that Marquis v. Farm Family

Mut. Ins. Co.,

(Me. 1993), requires that complaints

alleging violations of § 2436-A identify the specific subsection

9 of § 2436-A that the defendant is alleged to have violated.

Marquis, however, merely held that, after successfully

prosecuting a different claim, a plaintiff cannot use § 2436-A

to obtain statutory interest and attorneys’ fees if he never

pleaded or proved a claim under § 2436-A. Marquis,

(“[T]he failure by the plaintiffs to allege and prove a

specific violation precludes recovery under the statute.

Accordingly, the trial court correctly denied awarding statutory

interest and attorney fees on the basis of a violation of

section 2436-A.”). Furthermore, under the Federal Rules of

Civil Procedure, a complaint need only provide a short and clear

statement of the claim showing that the complaining party is

entitled to relief. Fed. R. Civ. P. 8(a)(2); Manning,

.

In this case, the Amended Complaint is sufficiently

specific to provide Philadelphia Indemnity notice of the

statutory basis for the claims under § 2436-A. Apart from the

factual allegations made to support the legal conclusions, the

Amended Complaint sums up the legal basis for the allegations in

Count II-ME by mirroring the language of § 2436-A:

Philadelphia committed unfair claim practices by: knowingly misrepresenting to insureds relevant facts or policy provisions related to coverages at issue; failing to acknowledge with reasonable promptness pertinent written communications with respect to claims arising under its policies; failing to adopt and implement reasonable standards for the prompt

10 investigation and settlement of claims arising under its policies; failing to develop and maintain documented claim files supporting decisions made regarding liability; refusing to pay claims without conducting a reasonable investigation; and failing to affirm coverage or deny coverage, reserving any appropriate defenses, within a reasonable time after having completed its investigation related to a claim.

Doc. 5 ¶ 194.

Philadelphia Indemnity further argues that § 2436-A(2)

creates a safe harbor from liability if the insurer had a

reasonable basis to contest coverage. Philadelphia Indemnity

asserts that the facts in the Amended Complaint show that it had

a “reasonable basis for the few remaining disputed issues” and

that it had a “legitimate doubt” about coverage. Doc. 8-1 at

13.

Taking the facts in the complaint as true and construing

the reasonable inferences in PLG’s favor, a jury could conclude

that Philadelphia did not have a reasonable basis to contest

coverage. For example, PLG alleges that Philadelphia

Indemnity’s adjustors intentionally overvalued property to

create a co-insurance penalty and delayed payment under other

coverages about which there was no dispute. Philadelphia

Indemnity’s motion to dismiss is denied as to Count II-ME.

C. Count II-NH

Under RSA 417:4, an insurer is prohibited from certain

unfair settlement practices in New Hampshire similar to those

11 prohibited under § 2436-A in Maine. See RSA 417:4(XV)(a) (“Any

of the following acts by an insurer, if committed without just

cause and not merely inadvertently or accidentally, shall

constitute unfair claim settlement practices . . . .”).

Philadelphia Indemnity argues that a prerequisite for the filing

of a claim for violations of RSA 417:4 is a finding of

violations by the New Hampshire Insurance Commissioner.

Philadelphia Indemnity argues that the Commissioner has not

found any violations here. PLG acknowledges that “certain trial

courts” have held that a ruling by the Commissioner is a

necessary prerequisite, but it argues that the New Hampshire

Supreme Court has never held as such. Doc. 9 at 18.

The First Circuit, however, has held that a ruling from the

Commissioner is a necessary prerequisite to bringing a claim for

violations of RSA 417:4. Hunt v. Golden Rule Ins. Co.,

(1st Cir. 2011). Specifically, in Hunt, the First

Circuit stated that the New Hampshire Supreme Court would

require a finding from the Commissioner that the insurer

violated RSA 417:4 before permitting any private action from a

consumer.

(“If there is to be a declaration that [the

defendant] has violated Chapter 417, it must first come from the

New Hampshire insurance commissioner.”); see also U.S. Bank,

N.A. v. Foremost Ins. Co.,

, at *3 (D.N.H. June

14, 2017) (“[A] finding by the insurance commissioner that a

12 supplier has violated chapter 417 is a prerequisite to bringing

a private action.”). PLG has not alleged that the New Hampshire

Insurance Commissioner has found that Philadelphia Indemnity

violated RSA 417:4. Accordingly, PLG’s claim alleging

violations of RSA 417:4 (Count II-NH) is dismissed.

The parties also argue about whether evidence that

Philadelphia Indemnity violated RSA 417:4 may be presented in

support of an argument that Philadelphia Indemnity violated RSA

358-A:2. That discussion, however, is not relevant to the

issues at hand. Therefore, the court declines to address the

parties’ arguments on that subject.

D. Count III-ME

PLG alleges a claim under 5 M.R.S.A. § 205-A, the Maine

Unfair Trade Practices Act. Philadelphia Indemnity argues that

an action under § 205-A is only available to non-business

entities. PLG argues that it is family-owned and operated, so

purchases it makes fall within the scope of § 205-A.

A private right of action under § 205-A exists for “[a]ny

person who purchases or leases goods, services or property, real

or personal, primarily for personal, family or household

purposes . . . .” 5 M.R.S.A. § 213(1). The phrase “personal,

family or household purposes” in § 213(1) excludes commercial

purposes. Summit Auto Sales, Inc. v. Draco,

, at

13 *14 (N.D. Ala. Sept. 6, 2017) (stating that the Maine Unfair

Trade Practices Act did not apply because the plaintiff-business

“unquestionably purchased the [products] at issue here for

commercial purposes); Oliver Stores v. JCB, Inc.,

, at *3 (D. Me. Oct. 5, 2012). The facts of the Amended

Complant show that the purchase of insurance by PLG was not for

the family that owned the business, but for the business itself.

Therefore, Count III-ME is dismissed.

E. Count III-NH

Lastly, Philadelphia Indemnity argues that PLG’s claim

under the New Hampshire Consumer Protection Act, RSA 358-A:2,

fails because a claim under RSA 358-A:2 can only be brought if

the wrongful conduct occurred within New Hampshire.

Philadelphia Indemnity contends that wrongful conduct for the

purpose of RSA 358-A:2 occurs within New Hampshire only if New

Hampshire was the “locus” of the conduct, meaning when a

misrepresentation is received in New Hampshire. Philadelphia

Indemnity further asserts that an out-of-state defendant can

only be liable under the RSA 358-A:2 if its conduct harmed a New

Hampshire entity and impaired the entity’s ability to do

business in New Hampshire. Philadelphia Indemnity — a

Pennsylvania entity — contends that the two plaintiffs are Maine

entities not New Hampshire entities, which precludes them from

pursuing an action under RSA 358-A:2. Philadelphia Indemnity

14 adds that the property at issue and subject to the insurance

contracts at issue are in Maine. PLG responds, arguing that

“meetings and communications” occurred in New Hampshire and are

sufficient to trigger liability under the Consumer Protection

Act.

To be actionable, conduct that offends RSA 358-A:2 must

occur “within this state.” RSA 358-A:2; Wilcox Indus. Corp. v.

Hansen,

(D.N.H 2012) (“The NHCPA

permits relief only for unfair competition that occurs ‘within

this state.’”). As it stands, the Amended Complaint does not

allege facts from which it can be reasonably inferred that the

alleged offending conduct occurred in New Hampshire. Rather,

the Amended Complaint merely states that meetings occurred and

communications were received in New Hampshire, but it does not

identify any specific conduct that occurred in New Hampshire

that PLG claims was in violation of the Consumer Protection Act.

See Hansen,

(dismissing claim under

Consumer Protection Act because “[t]here is simply no allegation

that any offending conduct occurred in New Hampshire”).

In its opposition, PLG requests an opportunity to amend its

complaint to provide more detail about where certain

conversations took place if the court finds the complaint to be

presently insufficient. Under the court’s local rules, a motion

for affirmative relief cannot be combined with an objection.

15 LR 7.1(a)(1) (“Objections to pending motions and affirmative

motions for relief shall not be combined in one filing.”). If

PLG wants to seek leave to file an amended complaint, it must

ask through a separate motion. Count III-NH is dismissed

without prejudice.

Conclusion

For the foregoing reasons, Philadelphia Indemnity’s motion

to dismiss (doc. no. 8) is granted in part and denied in part.

The motion is denied as to PLG Holding LLC’s standing. The

motion is denied as to Count II-ME. The motion is granted as to

Count II-NH and Count III. Count II-NH and Count III-ME are

dismissed with prejudice. Count III-NH is dismissed without

prejudice.

SO ORDERED.

________________________ Joseph A. DiClerico, Jr. United States District Judge

July 7, 2020

cc: Counsel of Record

16