Colbert v. Allstate Prop. & Cas. Ins. Co.
| Decision Date | 16 August 2021 |
| Docket Number | Civil Action 3:20-CV-1066 |
| Parties | TERRANCE A. COLBERT, Plaintiff v. ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, et al., Defendants |
| Court | U.S. District Court — Middle District of Pennsylvania |
MANNION, D.J.
REPORT AND RECOMMENDATION
Defendants, an insurance company and its agent, filed the present motion to dismiss (Doc. 6), arguing that Plaintiff's action is barred by a one (1)-year limitation provision in Plaintiff's insurance policy. The limitation provision bars Plaintiff's breach of contract claim. However, because statutory bad faith claims are independent of underlying contract claims, and Defendants do not address any other limitation period or the merits of the bad faith claim, they have not shown entitlement to dismissal of that claim. Defendants also do not establish that all of Plaintiff's tort claims arise under the contract, are subject to the policy's limitation clause, are barred by the policy's limitation period or applicable statute of limitations, or that they fail on the merits. I therefore recommend that Defendant's Motion be granted only in part and denied in part.
On June 24, 2020, Terrance A. Colbert (“Plaintiff”) and Hal H. Harris commenced this civil suit (see Doc. 1) against Defendants Allstate Property and Casualty Insurance Company (“Allstate”) and Debra Colucci, in her individual capacity and as an agent of Allstate (collectively, “Defendants”). On April 28, 2021, Harris filed a Notice of Voluntary Dismissal (Doc. 19), causing his termination as a plaintiff in this matter. (See Doc. 25). Plaintiff's action arises from Allstate's denial of his homeowners' insurance claim for personal property coverage under a policy issued by Allstate for a residence at which Plaintiff, Harris, and non-party Leticia R. Couttien lived, following the taking of personal property by Couttien.
On July 23, 2020, Defendants filed a Motion to Dismiss for Failure to State a Claim (Doc. 6) and a Brief in Support (Doc. 7). On August 7, 2020, I issued a briefing order requiring Plaintiff to file a Brief in Opposition, or risk having the Motion to Dismiss deemed unopposed. (Doc. 10). On September 9, 2020, Plaintiff filed Brief in Opposition (Doc. 11). On September 21, 2020, Defendants filed a Reply Brief (Doc. 12). On October 23, 2020, I issued an Order (Doc. 16) granting a Motion to Stay Discovery (Doc. 14) by Defendants, pending the resolution of the Motion to Dismiss (Doc. 6).
On March 31, 2021, I issued an Order (Doc. 17) directing Plaintiff to explain why this Court has subject-matter jurisdiction, given an apparent lack of diversity between then-plaintiff Harris and Defendant Colucci. Harris's subsequent Notice of Voluntary Dismissal (Doc. 19) resulted in complete diversity of citizenship among the parties and proper diversity jurisdiction. See 28 U.S.C. § 1332(a); (Doc. 25).
According to the Complaint, Plaintiff and Harris are close friends and business associates. On June 10, 2010, Plaintiff and Harris's fiancée, non-party Couttien, became co-owners of a residential property in Taminent, Pennsylvania (the “Real Property”). (See Doc. 1, ¶¶ 10, 14, 22). Harris, as a real estate broker, assisted Plaintiff and Couttien with the purchase of the Real Property, and all three planned to move into it, along with Couttien's daughter. Id. at ¶¶ 10, 20, 23. Harris was not on the mortgage or deed. Id. at 19. Plaintiff, Harris, and Couttien agreed that Harris would invest “sweat equity” by making or overseeing repairs, and he and Plaintiff would finance the repairs. Id. at ¶¶ 10, 20. The three agreed that Harris could buy Plaintiff's property interest if Harris and Couttien got married before April 1, 2013. Id. at ¶ 21. If Harris and Couttien did not marry by that date, or if Couttien did not repay monies owed to Plaintiff and Harris by that date, then Couttien's interest in the Real Property would be surrendered to Plaintiff. Id.
Harris referred Plaintiff and Couttien to Defendant Debra Colucci, an insurance agent of Defendant Allstate, to procure homeowners' insurance for the Real Property. Id. at ¶ 24. Before the insurance policy was issued, Allstate sent an Evidence of Insurance document to Harris, who provided it to Plaintiff and Couttien. Id. at ¶ 29. Plaintiff noticed that the Evidence of Insurance omitted him as an insured, and he asked Harris to contact Colucci about the omission. Id. at 30. Colucci stated the omission would be corrected, and Plaintiff would be listed as an insured. Id. Allstate issued a Homeowners Insurance Policy for the Real Property (“Policy”) on July 2, 2010. Id. at 32; (Doc. 6-4). The Policy lists Plaintiff as an “Additional Insured” instead of an “Insured, ” which Plaintiff believes was due to verbal requests by Couttien that were unknown to Plaintiff or Harris. (Doc. 1, ¶ 33).
Harris and Couttien accrued debts to Plaintiff. In 2012, due to his debts, Harris surrendered his personal property in the Real Property to Plaintiff. Id. at ¶¶ 40, 45. In September 2012, due to debts Couttein owed Plaintiff and Harris, Harris informed Couttien that her interest in the Real Property would be transferred to Plaintiff, unless she became current by April 1, 2013. Id. at ¶ 41. To ensure this transfer if needed, Couttien provided Harris with Power of Attorney (“POA”). Id. Both Couttien and Plaintiff executed notarized POA forms granting Harris power to make various financial, real estate, and insurance transactions on behalf of each. Id. at 42-44; (Doc. 2, pp. 10-13 (Couttien POA), pp. 14-17 (Colbert POA)).
On October 15, 2012, after execution of the POAs, Harris instructed Defendant Colucci to remove Couttien as an insured in the Policy. (Doc. 1, ¶¶ 46-49). Harris did this by delivering a copy of a letter to a front-desk employee at Colucci's office and by mailing the letter and POA forms to Colucci. Id. at ¶¶ 46, 49. The letter instructed Colucci to “immediately remove” Couttien from the Policy. Id. at ¶ 48; (Doc. 2, p. 18). Harris also mailed the letter to Couttien and Plaintiff. (Doc. 1, ¶ 46).
On April 8, 2013, Harris executed a quit claim deed that transferred Couttien's ownership interest in the Real Property to Plaintiff. Id. at ¶ 52. Couttien did not object. Id. On June 5, 2013, pursuant to a state court Protection from Abuse Order (“PFA”) obtained by Couttien against Harris, based on allegations that Harris sexually assaulted Couttien's daughter, [1] Harris was evicted from the Real Property and Couttien was granted temporary exclusive control of it. Id. at ¶¶ 61, 64-65. Later in June 2013, Plaintiff served a Notice to Quit requiring Couttien to vacate the Real Property by July 25, 2013, due to her lacking a written lease or ownership interest Id. at ¶ 66-67. On July 21, 2013, Couttien called Allstate and removed Plaintiff from the Policy, without Plaintiff's knowledge or permission. Id. at 69.
On July 24, 2013, Couttien filed a state court civil action against Plaintiff and Harris regarding ownership of the Real Property. Id. at ¶¶ 71-72. Couttien continued living in the Real Property.[2] The state court case was stayed in May 2014, when Couttien filed for Chapter 7 bankruptcy. Id. at ¶¶ 83-84.
On August 21, 2014, Couttien's attorney informed Plaintiff's attorney that Couttien had vacated the Real Property. Id. at ¶ 89. On August 22, 2014, Plaintiff discovered that personal property covered by the Policy was missing from the Real Property. Id. at ¶ 91. Couttien later admitted in her bankruptcy proceeding that she stole the property and that Plaintiff had not authorized her to remove him as an insured in the Policy in 2013. Id. at ¶¶ 100, 124-25; see also (Doc. 2, pp. 22, 29-31).
(Docs. 1, ¶ 95; 2 at p. 20).
Plaintiff's counsel in the state civil case, Attorney Brown, assumed representation of Plaintiff in connection with the insurance claim. (Doc. 1, ¶ 96). Attorney Brown contacted Allstate after its September 17, 2014 letter and relayed to Plaintiff that Allstate requested “1) Proof Couttien was not a co-owner of The Real Property at the time of loss 2) Proof the personal property was stolen by Couttien and 3) Proof the stolen personal property was not owned or co-owned by Couttien.” (Doc. 1, ¶ 98). On December 15, 2014, Attorney Brown sent a follow-up letter to Allstate asserting that Allstate had already been provided with a letter removing Couttien from the Policy, stating that Couttien had been removed from the deed as co-owner of the Real Property, and “requesting Allstate reconsider the determination set forth in [the September 17, 2014 letter].” Id. at ¶ 102; (Doc. 2, p. 21).
In late December 2014, Attorney Brown informed Plaintiff that Allstate responded to his letter and stated it was reconsidering its determination. (Doc. 1, ¶ 105). He relayed that Allstate also “requested that Plaintiffs a) ‘drop' Plaintiffs' Counterclaims against Couttien in the State Case, . . . b) provide...
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