Bostick v. Itt Hartford Group, Inc., CIV. A. 97-CV-6296.

• Decision Date: 27 July 1999
• Docket Number: No. CIV. A. 97-CV-6296.,CIV. A. 97-CV-6296.
• Citation: 56 F.Supp.2d 580
• Parties: Shirley BOSTICK and Adrienne Bostick, Plaintiffs, v. ITT HARTFORD GROUP, INC. a/k/a and/or d/b/a as ITT Hartford, and/or the Hartford, and Hartford Insurance Company of the Midwest, Defendants,
• Court: U.S. District Court — Eastern District of Pennsylvania

56 F.Supp.2d 580

Shirley BOSTICK and Adrienne Bostick, Plaintiffs, v. ITT HARTFORD GROUP, INC. a/k/a and/or d/b/a as ITT Hartford, and/or the Hartford, and Hartford Insurance Company of the Midwest, Defendants,

No. CIV. A. 97-CV-6296.

United States District Court, E.D. Pennsylvania.

July 27, 1999.

Neil E. Jokelson, Philadelphia, PA, for Plaintiffs.

Patrick J. Keenan, Philadelphia, PA, for Defendants.

MEMORANDUM

LOWELL A. REED, Senior District Judge.

Presently before the court is the motion of defendant ITT Hartford Groups, Inc. ("Hartford") for summary judgment (Document No. 22) pursuant to Federal Rule of Civil Procedure 56(c), the memorandum of plaintiffs in opposition thereto (Document No. 23) and the reply of Hartford (Document No. 25). Based on the following analysis, the motion of Hartford will be granted in part and denied in part.

I. Background

In their complaint, the plaintiffs contend that an outside wall of their house collapsed. See Defendants' Exhibit A, Plaintiffs' Complaint at 10. The loss involved the "[o]utside wall of the first floor, including the basement — on the side in the rear of house [sic] collapsed." See Defendants' Exhibit D, Plaintiffs' Answers to Hartford's Interrogatories, ¶ 5. The plaintiffs assert that the loss of the collapsed wall is covered under their Hartford Homeowners Policy. The policy, no. 55 RB 932355, was in effect between March 27, 1996 and March 27, 1997. See Defendants' Exhibit B, Homeowners Policy.

In order to qualify for policy coverage, several conditions must be met. First, the loss incurred must be provided for in the policy. Possible restrictions may limit the insured's ability to recover the incurred loss. See Defendants' Exhibit B, Homeowners Policy, Section 1 — Property Coverages, Additional Coverages, ¶ 8 at 5 of 18. Second, the loss must occur during the policy period. For instance, if a deterioration problem occurred prior to the effective date of a policy, an insurer would not be held liable for ongoing damage that began before the insurer's policy period. See Defendants' Exhibit B, Homeowners Policy, Section I and II — Conditions, ¶ 1 at 17 of 18. Third, the policy requires suit to be started within one year after the date of the loss. See Defendants' Exhibit B, Homeowners Policy, Section I — Conditions, ¶ 8 at 11 of 18. Plaintiffs filed their complaint here on October 8, 1997.

After receiving notice of the October 1996 loss, Hartford employed an engineer, Nicholas S. Colanzi, M.S.C.E., P.E., to inspect the plaintiff's property. Mr. Colanzi's December 18, 1996 report provided that "the damage to the Bostick dwelling is the direct result of long term water infiltration and differential earth movement which has occurred over time (years)." See Defendants' Exhibit H, The Defendants' Expert Report at 4. He further opined that the collapse of the wall could not causally be related in any way to any single occurrence or sudden event of weather-related or other phenomena. Id. The defendants further contend that because the plaintiffs' property was located in the Logan section of Philadelphia, an area that has experienced problems with its houses, including settlement, unevenness of the ground, drainage problems and wet basements, the plaintiffs were aware of such problems as early as 1991 or 1992. See Defendants' Exhibit C, Adrienne Bostick's Deposition at 49-50. Based on their expert's testimony and evidence of similar area damage, Hartford rejected the Bosticks' claim in a letter dated March 12, 1997, asserting that the loss to the Bostick's home was not covered by the policy. See Defendants' Exhibit J, Letter from Hartford Insurance Denying Coverage.

Significantly, however, the plaintiffs' expert, Kenneth P. Creech, P.E., who is a professional engineer, examined the property and opined in his November 13, 1998 report that "[o]n October 8, 1996, the rear section of the subject property collapsed" and "the cause of the collapse was failure of the mortar in the brick wall due to hidden water damage." See Defendants' Exhibit I, Plaintiffs' Expert Report at 1-2. He further concluded that the cause of the failure was not related to sinking, rising, or shifting of the earth at the time of the collapse. Id. Because the policy insures against hidden decay, the plaintiffs contend that the homeowners policy covers the loss suffered.

The defendants request that summary judgment be entered in their favor. The plaintiffs are Pennsylvania citizens. The defendants are foreign corporations with their principle places of business in Connecticut. The amount in controversy exceeds $75,000 exclusive of interests and costs. Diversity of citizenship exists and jurisdiction is founded upon 28 U.S.C. § 1332.

II. Standard for Summary Judgment

Rule 56(c) of the Federal Rules of Civil Procedure provides that "if the pleadings, depositions, answers to interrogatories, and admissions of file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law," then a motion for summary judgment may be granted.

The moving party has the initial burden of illustrating for the court the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-161, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The movant can satisfy this burden by "pointing out to the district court that there is an absence of evidence to support the non-moving party's case;" the movant is not required to produce affidavits or other evidence to establish that there are no genuine issues of material fact. Celotex, 477 U.S. at 323-325, 106 S.Ct. 2548.

Once the moving party has made a proper motion for summary judgment, the burden switches to the nonmoving party. Under Rule 56(e),

[w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.

Hence, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Electric Industries Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A party opposing the motion must come forward with specific facts. Id. Before a court will find that a dispute about a material fact is genuine there must be sufficient evidence upon which a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, the moving party is entitled to summary judgment, as a matter of law, when the "non-moving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

III. Analysis

The defendants have presented several alternative grounds upon which summary judgment may be granted based upon restrictions within the policy which may limit the plaintiffs' ability to recover for damages suffered. The defendants first assert that the plaintiffs' claimed loss is excluded from recovery under policy conditions. Second, the defendants contend that the loss, which began as early as January, 1996, occurred well before the effective date of the homeowners policy. Third, the defendants insist that because the plaintiffs failed to file suit within one year from the date of loss, the claim is time-barred.

A. Additional Coverage for Collapse

The plaintiffs' homeowners policy does not "insure for loss ... [i]nvolving collapse, other than as provided in Additional Coverage 8...." See Defendants' Exhibit B, Homeowners Policy Section I — Perils Insured Against, Coverage A, ¶ 1 at 6 of 18. Additional Coverage 8 provides coverage for collapse of a building or a part of a building caused by certain named perils. The additional coverage for collapse in the policy states, inter alia:

Collapse. We insure for direct physical loss to covered property involving collapse of a building or any part of a building caused only by one or more of the following:

a. Perils Insured Against in COVERAGE C — PERSONAL PROPERTY. These perils apply to covered buildings and personal property for loss insured by this additional coverage;

b. Hidden decay; ... [L]oss to an awning ... foundation, retaining wall... is not included under items b., c., d., e., and f. unless the loss is a direct result of a collapse of a building.

Defendants' Exhibit B, Homeowners Policy, Section I — Property Coverages, Additional Coverages, ¶ 8 at 5 of 18.

The parties do not dispute that Pennsylvania law applies. Under Pennsylvania law, if the loss of a house was caused by collapse due to hidden decay, it clearly and unambiguously would be covered by the terms of the aforementioned policy. See Norfolk & Dedham Mut. Fire Ins. Co. v. DeMarta, 799 F.Supp. 33, (E.D.Pa.1992), aff'd, 993 F.2d 225 (3d Cir.1993). In Norfolk, under an identical policy provision pertaining to collapse, the court found that the loss of the defendant's house was caused by collapse due to hidden decay. The court granted the policy holder defendant's motion for summary judgment and declared that his claim was covered under the homeowners policy.

However, in Norfolk, the affidavit of the building inspector was uncontested and relied upon by both parties to support their motions for summary judgment. Conversely, in this case both the plaintiffs and defendants have submitted conflicting expert reports. The plaintiffs' expert, Mr. Creech, has opined that hidden...