Bruno v. Erie Ins. Co.
| Decision Date | 15 December 2014 |
| Docket Number | No. 25 WAP 2013,25 WAP 2013 |
| Citation | 106 A.3d 48 |
| Court | Pennsylvania Supreme Court |
| Parties | David BRUNO and Angela Bruno, Husband and Wife and Anthony Gotti Bruno and McKayla Marie Blake, by their Parents and Legal Guardians, David Bruno and Angela Bruno, Appellants v. ERIE INSURANCE COMPANY, Rudick Forensic Engineering, Inc., Theresa Pitcher and Marc Pitcher, Appellees. |
Gary Mitchell Davis, Esq., Pittsburgh, for David Bruno and Angela Bruno, et al.
Mark E. Milsop, Esq., Berger and Green, P.C., Pittsburgh, for Pennsylvania Association for Justice.
Craig R.F. Murphey, Esq., MacDonald, Illig, Jones & Britton, L.L.P., Erie, for Erie Insurance Company.
Mark Reilly, Esq., Law Offices of John DeMarco, for Rudick Forensic Engineering Inc.
Louis C. Long, Esq., for PA Defense Institute and Insurance Federation of PA, Inc.
Theresa Pitcher, pro se.
OPINION
In this interlocutory appeal, we consider two questions: (1) whether a negligence claim brought against an insurer by its insureds—for alleged statements made by the insurer's adjuster, and an engineer the insurer had retained, that mold which the insureds discovered while performing home renovations was harmless and that they should continue their renovations—was barred by the “gist of the action” doctrine on the grounds that the true gist or gravamen of the action was an alleged breach of the insurance contract, their homeowners' policy; and (2) whether the provisions of Pa.R.C.P. 1042.1 and 1042.3 required the insureds to obtain a certificate of merit in order for them to proceed with their negligence suit against the professional engineer employed by the insurer to evaluate the mold. After careful review, we hold that the insureds' negligence claim was not barred by the gist of the action doctrine, as the claim was based on an alleged breach of a social duty imposed by the law of torts, and not a breach of a duty created by the underlying contract of insurance. We additionally conclude that the insureds were not required to obtain a certificate of merit in order to proceed with their negligence suit against the professional engineer, since they were not patients or clients of the engineering company which employed him. Consequently, we reverse the order of the Superior Court and remand for further proceedings.
In September 2007, Appellants David and Angela Bruno (“Brunos”), purchased a home in Bradford, McKean County from Appellees Theresa and Marc Pitcher, and obtained a policy of homeowner's insurance for it issued by Appellee, Erie Insurance Company (“Erie”). The policy covered both themselves and their two minor children—Appellants Anthony Gotti Bruno and McKayla Marie Blake—and it also included a separate endorsement or rider covering physical loss to the property caused by “fungi,” which the endorsement defined, inter alia, as “any type or form of ... molds.” See “Limited Fungi, Wet or Dry Rot or Bacteria Coverage Endorsement” (Exhibit B to Complaint) at 1. This rider obligated Erie to pay the Brunos up to $5,000 for “[d]irect physical loss” to the property caused by mold, or any “[n]ecessary increase in costs” they incurred to maintain their “normal standard of living” should their residence be rendered uninhabitable as the result of mold. Id. The rider also required Erie to pay the cost of testing the air and any part of the covered property in order “to confirm the absence, presence or level of” mold “to the extent there is a reason to believe” mold was present, and, if mold was present, it obligated Erie to pay for the cost of its removal, including the cost of tearing out any part of the property needed to gain access to the mold. Id.
On October 5, 2007, after the Brunos moved into their home, David Bruno, with the assistance of a contractor he had hired, began the process of renovating the basement, during which they removed a portion of the wood paneling which was completely covering the block walls of the basement. Once the paneling was detached, Mr. Bruno discovered two areas of black mold growing on the block walls underneath, which were in proximity to leaking water pipes.
Mr. Bruno promptly informed Erie of this discovery and, also, that he wished to initiate a claim under his homeowners' policy. In response, on October 6, 2007, Erie sent an adjuster to his home to view the mold. The adjuster took no action at that time, but, instead, returned on October 8, 2007 with an engineer employed by Appellee, Rudick Forensic Engineering Company (“Rudick”), which had been retained by Erie to investigate the mold problem, determine its severity, and ascertain the extent to which remediation was required. After the adjuster and the engineer examined the mold growth, Mr. Bruno requested that the adjuster authorize payment of the policy limits—$5,000—in order to have the mold tested. In response to Mr. Bruno's request, the adjuster and the engineer informed Mr. Bruno that “the mold was harmless and that they should continue tearing out the existing paneling [and] that health problems associated with mold were a media frenzy and overblown.” Complaint, 8/30/10, at ¶ 19. The adjuster refused payment on the basis that he lacked authorization to pay the claim, and he additionally asserted that no determination as to coverage had been made.
Based on the assurances of the adjuster and engineer that the mold was not a health hazard, the Brunos continued to live in the house, and Mr. Bruno continued with the renovations. As the month of October progressed, Mr. Bruno and his contractor attempted to eradicate the mold which they had previously discovered, and they also removed additional sheets of paneling. These actions revealed more leaking pipes and additional areas of mold growing on the walls beyond that which was initially discovered.
Mr. Bruno informed Erie of these further discoveries, and Erie dispatched the same engineer employed by Rudick who had visited the premises previously, and the engineer visually inspected the newly-discovered areas of mold, but he did nothing else. Even though the engineer performed tests of the mold, he did not disclose those results to the Brunos, nor did he or the adjuster apprise the Brunos of the true hazard to human health posed by the mold, or indicate that it should be removed or remediated.
Meanwhile, during October, each member of the Bruno family began to suffer respiratory ailments which worsened in the months thereafter. By January 2008, Angela Bruno's physical condition had deteriorated to the point that she developed severe coughing, difficulty breathing and clearing her throat, and intense headaches. At this point, the Brunos elected to have the mold tested, at their own expense, which revealed that the mold was toxic in nature and hazardous to human health.
After receiving the test results in January 2008, the Brunos demanded payment from Erie of the full $5,000 for the purpose of eradicating the mold, and they also made a claim under other provisions of their policy for repair of the water damage caused by the leaking pipes. Erie informed them that the matter was still being investigated and a claim decision had not yet been made. Finally, in April 2008, Erie made a $5,000 payment under the mold endorsement of the homeowners' policy.
Angela Bruno was later diagnosed with cancer of the throat and esophagus, which her treating physicians attributed to her exposure to the toxic mold. Fearing for their safety, the Brunos subsequently vacated the house, which they were later forced to demolish, as the mold could not be eradicated.
On August 30, 2010, the Brunos filed a 12–count civil complaint against Erie, Rudick, and the Pitchers. Relevant to the specific question presented by the current appeal, in count 7 of this complaint, the Brunos asserted that Erie engaged in the following negligent acts and omissions which caused them damage and injury: “failure to recognize the nature and severity of the mold problem at the premises”; “misleading [the Brunos] concerning the nature of the mold problem in general and as it related to their health and home”; “minimizing the dangers and consequences of the mold infestation when it knew or should have known otherwise”; and the “creation or exacerbation of a dangerous condition.” Complaint, 8/30/10, at ¶ 91.2 , 3
We will, hereinafter, refer to these allegations collectively as the Brunos' “negligence claim.”
Additionally, in count 10 of their complaint, the Brunos raised a claim against Rudick for professional negligence, alleging, inter alia, that it was negligent for: delaying and then improperly conducting mold testing of the Bruno home; failing to properly read, interpret, and analyze the test results; delaying the reporting of the test results to the Brunos; failing to recognize and report to the Brunos the danger to their health and to the premises created by the mold; and minimizing the dangers and consequences posed by the mold infestation, when it knew or should have known otherwise. Id. at ¶ 111.
Both Erie and Rudick filed preliminary objections in the nature of a demurrer. The basis of Erie's demurrer was that the Brunos' negligence claim against it was barred by the “gist of the action” doctrine which, as discussed more fully herein, provides that an alleged tort claim against a party to a contract, based on the party's actions undertaken in the course of carrying out a contractual agreement, is barred when the gist4 or gravamen5 of the cause of action stated in the complaint, although sounding in tort, is, in actuality, a claim against the party for breach of its contractual obligations. Rudick grounded its demurrer on the contention that the Brunos' claim for professional negligence should be stricken due to their failure to file a certificate of merit within 60 days of the filing of their complaint, as required by Pa.R.C.P. 1042.3(a).
The trial court sustained...
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