Bologna v. Allstate Ins. Co.

Decision Date20 March 2001
Docket NumberNo. CV 98-5767(ADS).,CV 98-5767(ADS).
PartiesJoseph BOLOGNA, individually, and d/b/a U.S.A. Development, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Sears Roebuck & Co., Pro-Tech Construction, Inc., John Varanelli, Lucille Varanelli, Feldman & Rudy, P.C., Brian Rudy, Hoffman Construction Company, Robert Hoffman, Philip Genova, George Loue, Dennis Meehan, Anne Inguanti, James North, Gary Pace, and All Quality Vendor Program Members, the name being fictitious to account for all known and unknown Quality Vendor Program members from January 1, 1992 to December 31, 1997, Defendants.
CourtU.S. District Court — Eastern District of New York

Joseph Bologna, Cape Coral, Florida, plaintiff pro se.

Rivkin Radler & Kremer, LLP, Uniondale, New York City, by Frank J. Giliberti, for defendants Allstate Insurance Company, Philip Genova, George Loue, Dennis Meehan, Anne Iguanti, and Gary Pace.

Novack, Burnbaum & Crystal, LLP, New York City, by Howard C. Crystal, of counsel, for defendants Sears, Roebuck and Co., and James North.

Somer & Heller, Commack, New York City, by Jeffrey T. Heller, of counsel, for defendants Pro-Tech Construction, Inc., John Varanelli, and Lucille Varanelli.

Feldman & Rudy, P.C., Westbury, New York City, by Brian Rudy, of counsel, for defendants Feldman & Rudy, P.C. and Brian Rudy.

Croutier & Ryan, Garden City, New York, by Thomas C. Awad, of counsel, for defendants Hoffman Construction and Robert Hoffman.


SPATT, District Judge.

This case originated with a 99-page, 1087-paragraph amended complaint in which a pro se plaintiff, Joseph Bologna ("Bologna" or the "plaintiff"), individually and doing business as U.S.A. Development, raises 57 causes of action against Allstate Insurance Company ("Allstate" or a "defendant"), Philip Genova ("Genova" or a "defendant"), George Loue ("Loue" or a "defendant"), Dennis Meehan ("Meehan" or a "defendant"), Anne Iguanti ("Iguanti" or a "defendant"), Gary Pace ("Pace" or a "defendant") (collectively, the "Allstate defendants"), Sears, Roebuck and Co. ("Sears" or a "defendant"), James North ("North" or a "defendant") (collectively, the "Sears defendants"), Pro-Tech Construction, Inc. ("Pro-Tech" or a "defendant"), John Varanelli ("Varanelli" or a "defendant"), Lucille Varanelli ("L. Varanelli" or a "defendant") (collectively, the "Pro-Tech defendants"), Feldman & Rudy, P.C. ("Feldman & Rudy" or a "defendant"), Brian Rudy ("Rudy" or a "defendant") (collectively the "Rudy defendants"), Hoffman Construction ("Hoffman Construction" or a "defendant"), Robert Hoffman ("Hoffman" or a "defendant") (collectively, the "Hoffman defendants") and all Quality Vendor Program Members ("QVPM's" or a "defendant") (collectively, the "defendants"). Presently before the Court are two motions to dismiss the complaint: one brought by the Allstate and Sears defendants and the other brought by the Rudy defendants.


Unless otherwise stated, the following facts are from the plaintiff's amended complaint. On September 18, 1993 a fire caused substantial damage to property owned by Rose Scavo ("Scavo") at 11 Colonial Place, Centereach, New York (the "premises"). The premises was insured against fire loss by Allstate. The Centereach Fire Department declared the premises unsafe for habitation due to extensive damage caused by the fire and the resulting unsafe conditions. In addition, the Long Island Lighting Company cut the electricity to the premises.

On September 22, 1993, Scavo and Bologna, Scavo's son-in-law and the owner and operator of USA Development, entered into a contract (the "General Management Agreement"), whereby the plaintiff agreed to perform and manage all restoration of the damaged property including subcontracting any of the restoration that he could not do on his own. The General Management Agreement, which governed the restoration, stated that the "General Manager shall act in the stead of the Owner in all matters pertaining to the Property until repairs are complete, all funds are collected, all creditors are paid, and all aspects of the project are completed." In addition, the Agreement stated that the "General Manager shall cause to be restored the dwelling and real property to at least its condition before the fire loss" (see amended complaint, ex. 3, p. 1). Under the Agreement, the plaintiff had a duty to pay the expenses to restore the property, and he relied on a fair settlement of the insurance claims to meet these obligations.

On September 20, 1993, the plaintiff reported the fire to Genova, an Allstate claims adjuster. The plaintiff and Genova agreed to meet at the premises on September 22, 1993 (the "site meeting"). Genova also asked Bologna for permission to invite Varanelli, an independent contractor and a principal of Pro-Tech, to the site meeting so that Bologna could meet Varanelli and determine whether he wanted to subcontract some of the work to him. Bologna agreed to include Varanelli in the site meeting.

Genova, Varanelli and the plaintiff met at the premises on September 22, 1993, and agreed to record the meeting on audiotape. During the meeting, Genova inspected the premises and opened two personal property claims files. The first was for damaged personal property, and the second for missing or destroyed property. The plaintiff gave Genova an inventory of the destroyed and damaged personal property. He included receipts for and photographs of the property and set forth their estimated replacement values.

Bologna alleges that Varanelli told him that Pro-Tech was a "Sears Restoration Contractor," and that although Allstate was recommending Pro-Tech for the repair work, Pro-Tech would be working for Bologna, not Allstate. The plaintiff retained Pro-Tech to represent his interest, to provide an estimate of repair costs, and to perform emergency repairs to secure the property. Thereafter, Pro-Tech performed emergency repairs at the property.

On November 2, 1993, the plaintiff received the repair estimate from Sears, Pro-Tech, and Varanelli. The plaintiff alleges that Genova acknowledged that the estimate was too low, but claimed that it was to ensure that Pro-Tech would get the job and said that the shortfall would be made up later. On November 10, 1993, the plaintiff discharged Pro-Tech. On November 12, 1993, Bologna hired a public adjuster, Howard Cohen, who concluded that the prior estimate was substantially undervalued.

The complaint alleges that the repair work performed by Pro-Tech, Sears, and Varanelli was "inferior and substandard" and that Allstate and Genova "did not properly supervise or inspect the repairs." As a result, the plaintiff claims that the Town of Brookhaven required that the work be redone. In April 1994, Allstate and Bologna entered into an Appraisal Agreement through the American Arbitration Association, pursuant to which Allstate and Bologna agreed to select separate impartial appraisers to evaluate the loss to the property. Allstate's attorneys, the defendant Feldman & Rudy, selected defendant Hoffman Construction, the principal of which is defendant Hoffman as its impartial appraiser. Bologna selected Frank T. Porco ("Porco"), a public adjuster. Hoffman evaluated the loss at $57,000 while Porco appraised the loss at $150,000. When the parties could not settle the difference, an arbitration award was made in the sum of $88,491.28. The plaintiff commenced restoration work on the property on October 4, 1995, and substantially completed the work in July 1997.

On November 17, 1995, Bologna, acting pursuant to a power of attorney, commenced an action in the name of Rose Scavo in the Supreme Court of the State of New York, Suffolk County, against Allstate and Genova (the "state complaint"). The state complaint alleges that Genova handled the claim for Allstate and met with Bologna at the loss site on September 22, 1993. The state complaint further alleges that Genova insisted that Bologna use a specific contractor, namely Varanelli's Pro-Tech, to perform the estimates and repairs, and that a failure to do so would result in "adverse consequences." The state complaint maintains that Varanelli's estimates were grossly insufficient but would be supplemented by additional funds if Bologna agreed to accept the lower bid. The state complaint further contends that Bologna would receive kickbacks if he agreed to employ Varanelli. According to the state complaint, Bologna hired a public adjustor, an act that caused Allstate and Genova to retaliate by cutting off funding for the repairs. The state complaint further alleges that Allstate obtained a fraudulently low bid for the arbitration from Hoffman, who was a biased estimator, and that the resultant arbitration award was fraudulent.

The state complaint raised causes of action sounding in fraud, bad faith, breach of duty, bad faith fraud, breach of contract, deceptive business practices, and punitive damages. On appeal, the Second Department found that the complaint stated a claim for deceptive business practices and breach of contract in connection with the adjustment of a first-party insurance claim. See Scavo v. Allstate Ins. Co., 238 A.D.2d 571, 657 N.Y.S.2d 193 (2d Dept. 1997).

On September 14, 1998, the plaintiff commenced this action. The amended complaint alleges 57 causes of action. In particular, Bologna claims breach of contract (1st, 6th, 9th, 16th causes of action) negligence (2nd 4th 7th, 10th, 13th, 15th, 17th, 33rd, 34th, 35th 36th, 37th, 38th, 39th, 40th, 41st 42nd, 43rd, 44th, 45th, 46th, 49th, 50th, causes of action), fraud (3rd 5th 8th, 11th, 14, 18th 53rd causes of action), false advertising (12th cause of action), breach of warranty (12th cause of action), discrimination (32nd cause of action), insurance fraud (47th and 48th causes of action), mail fraud (51st cause of action), and wire fraud (52nd cause of action) by the...

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