The opinion of the court was delivered by: Hillman, District Judge
This matter has come before the Court on the motions of plaintiff to dismiss the counterclaims, crossclaims, and third-party complaint brought by defendants Michael W. Kwasnik and Kwasnik, Kanowitz & Associates, P.C. For the reasons expressed below, plaintiff's motions will be granted in part and denied in part.
Plaintiff, Colony Insurance Company, issued a lawyers professional liability insurance policy to defendant Kwasnik, Kanowitz & Associates, P.C. ("KKA"), and that policy purportedly insured defendants Michael W. Kwasnik, Robert J. Keltos, and Howard Z. Kanowitz, who were attorneys at the firm. Colony filed the instant suit against the defendants seeking a rescission of the policy, a declaration that the policy is void ab initio, and damages under the New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A et seq., as a result of Kwasnik's alleged fraud in the application process. Specifically, Colony claims that Kwasnik fraudulently and intentionally misrepresented that neither he nor anyone else in the firm had been the subject of an ethics complaint, when Kwasnik was actually the subject of a pending disciplinary proceeding for misappropriation of client funds at that time.*fn2
Kwasnik and KKA filed four counterclaims against Colony for deceptive trade practices, fraud, breach of contract, and breach of duty to defend. They seek compensatory and punitive damages. In addition, Kwasnik and KKA filed crossclaims against Keltos and Kanowitz for "intentional acts," negligence, false witness, and false light. Kwasnik and KKA also filed a third-party complaint against the controller of the firm and the office manager of the firm, claiming that they misused Kwasnik's signature stamp and misappropriated client funds.*fn3 Keltos and Kanowitz answered Colony's complaint and filed crossclaims against Kwasnik and KKA.
Colony has moved to dismiss Kwasnik and KKA's request for punitive
damages, as well as their counterclaims, except for breach of
contract. Colony has also moved to dismiss Kwasnik and KKA's
third-party complaint and four of their five crossclaims, arguing that
they are outside the scope of Colony's claims against them.*fn4
Kwasnik has opposed the motions, but, as previously noted,
see note 2, because KKA is no longer represented by Kwasnik or any
other counsel, it has not filed any opposition.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.
B. Standard for Motion to Dismiss
When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6), a court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005). It is well settled that a pleading is sufficient if it contains "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Under the liberal federal pleading rules, it is not necessary to plead evidence, and it is not necessary to plead all the facts that serve as a basis for the claim. Bogosian v. Gulf Oil Corp., 562 F.2d 434, 446 (3d Cir. 1977). However, "[a]lthough the Federal Rules of Civil Procedure do not require a claimant to set forth an intricately detailed description of the asserted basis for relief, they do require that the pleadings give defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Baldwin County Welcome Ctr. v. Brown, 466 U.S. 147, 149-50 n.3 (1984) (quotation and citation omitted).
A district court, in weighing a motion to dismiss, asks "'not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claim.'" Bell Atlantic v. Twombly, 127 S. Ct. 1955, 1969 n.8 (2007) (quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) ("Our decision in Twombly expounded the pleading standard for 'all civil actions' . . . ."); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) ("Iqbal . . . provides the final nail-in-the-coffin for the 'no set of facts' standard that applied to federal complaints before Twombly.").
Following the Twombly/Iqbal standard, the Third Circuit has instructed a two-part analysis in reviewing a complaint under Rule 12(b)(6). First, the factual and legal elements of a claim should be separated; a district court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Fowler, 578 F.3d at 210 (citing Iqbal, 129 S. Ct. at 1950). Second, a district court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a "'plausible claim for relief.'" Id. (quoting Iqbal, 129 S. Ct. at 1950). A complaint must do more than allege the plaintiff's entitlement to relief. Id.; see also Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (stating that the "Supreme Court's Twombly formulation of the pleading standard can be summed up thus: 'stating . . . a claim requires a complaint with enough factual matter (taken as true) to suggest' the required element. This 'does not impose a probability requirement at the pleading stage,' but instead 'simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of' the necessary element"). A court need not credit either "bald assertions" or "legal conclusions" in a complaint when deciding a motion to dismiss. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir. 1997). The defendant bears the burden of showing that no claim has been presented. Hedges v. U.S., 404 F.3d 744, 750 (3d Cir. 2005) (citing Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991)).
Finally, a court in reviewing a Rule 12(b)(6) motion must only consider the facts alleged in the pleadings, the documents attached thereto as exhibits, and matters of judicial notice. Southern Cross Overseas Agencies, Inc. v. Kwong Shipping Group Ltd., 181 F.3d 410, 426 (3d Cir. 1999). A court may consider, however, "an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). If any other matters outside the pleadings are presented to the ...