County of Delaware v. Travelers Property and Casualty Company of America

• Decision Date: 09 September 2021
• Docket Number: CIVIL ACTION NO. 19-2430-JMY
• Citation: 559 F.Supp.3d 425
• Parties: COUNTY OF DELAWARE v. TRAVELERS PROPERTY AND CASUALTY COMPANY OF AMERICA
• Court: U.S. District Court — Eastern District of Pennsylvania

559 F.Supp.3d 425

COUNTY OF DELAWARE

v.TRAVELERS PROPERTY AND CASUALTY COMPANY OF AMERICA

CIVIL ACTION NO. 19-2430-JMY

United States District Court, E.D. Pennsylvania.

Filed September 9, 2021

Allen R. Wolff, Ethan W. Middlebrooks, Anderson Kill PC, New York, NY, Arthur R. Armstrong, Flaster Greenberg PC, Pamela Dianne Hans, Anderson Kill P.C., Philadelphia, PA, Nicholas Manuel Insua, McCarter & English, LLP, Newark, NJ, for County of Delaware.

Michael J. McLaughlin, Reid & Associates, Hartford, CT, Adam B. Masef, Andrea R. Procton, Richard D. Gable, Jr., Butler Weihmuller Katz Craig LLP, Philadelphia, PA, Kenneth Clark Schirle, Butler Weihmuller Katz Craig LLP, Chicago, IL, for Travelers Property and Casualty Company of America.

MEMORANDUM

YOUNGE, JUDGE

I. INTRODUCTION

This is an insurance coverage and bad faith action by the County of Delaware, Pennsylvania (the "County") against its property insurer, Travelers Property and Casualty Insurance Company of America ("Travelers"). The County seeks coverage from Travelers for damages allegedly caused when, on July 27, 2018, a precast, concrete spandrel beam fell from the top-level roof to the top-level parking deck of a municipal parking garage at 201 West Front Street, Media, Pennsylvania (the "Garage"). The County contends that the damages it seeks—including the costs to demolish and replace the Garage and adjacent Toal and Sweeney Buildings—are covered under the Abrupt Collapse provision of its Travelers policy. Travelers, in contrast, contends that the Abrupt Collapse provision does not apply to any of the alleged damages, all of which, it claims, are also barred by policy exclusions. Travelers alternatively argues that to the extent any coverage is found to exist, it must be limited to damages in the impact area that were directly caused by the concrete beam's fall.

Presently before the Court are Travelers’ Motion for Summary Judgment ("Trav. MSJ," ECF No. 60) as to all the County's claims, and the County's Motion for Partial Summary ("Cty MSJ," ECF No. 61) seeking judgment: (1) that the "abrupt collapse" of the beam is covered under the Travelers policy; (2) judgment in the County's favor as to its claims for declaratory judgment and breach of contract; (3) that Travelers is estopped from challenging the reasonableness of the County's decision to replace the Garage; and (4) that the County is entitled to replacement cost coverage for the Garage in an amount no less than $18,239,180.15.

For the following reasons, summary judgment will be granted in favor of Travelers, and the County's Partial Motion for Summary Judgment will be denied.

II. BACKGROUND

A. Factual Background¹

1. The Garage and Adjacent Buildings

The County owned and operated the Garage, which was used for employee and juror parking. (Cty. SMF ¶ 1, ECF No. 61-1.) The Garage was built in the early 1970s and was adjacent to and constructed around two preexisting County municipal buildings, commonly known as the Toal and Sweeney buildings. (Trav. SMF ¶ 3, ECF No. 60-2.) The Garage was a pre-cast concrete structure, with pre-cast concrete elements such as columns, girders, spandrels, and double-tee pre-stressed beams. (Cty. SMF ¶ 2.) It consisted of four levels and approximately 175,000 square feet and had 409 parking spaces. (Trav. SMF ¶ 4.)

2. Relevant Insurance Policy Provisions

Travelers issued to the County a Deluxe Property insurance policy, with policy number 630-1H967220-TIL-18, for the policy period June 26, 2018 through June 1, 2019 (the "Policy"). (Policy at TRAVELERS-000378, Middlebrooks Dec., Ex. A, ECF No. 60-4.) The Policy's limit of insurance for the County's buildings and business personal property is $435,448,433. (Id. at TRAVELERS-000401.)

The Policy Coverage Form states:

A. COVERAGE

We will pay for direct physical loss of or damage to Covered Property caused by or resulting from a Covered Cause of Loss.

(Id. at TRAVELERS-00412.) The Policy defines "Covered Property" as, among other things, "Buildings." (Cty. SMF ¶ 9; Trav. SMF Resp. ¶ 9, ECF No. 66; Policy at TRAVELERS-00412.) "Buildings," in turn, are defined as "the designated building or structure at the premises described in the Declarations." (Policy at TRAVELERS-000412.) The "Locations" on the Policy Declarations references the "Schedule of Locations and Buildings." (Policy at TRAVELERS-000378, 000383.) The Garage is designated on the Schedule of Locations and Buildings as Location No. 1, Building Nos. 9 and 10. The Sweeney and Toal Buildings are designated as Location No. 1, Building Nos. 7 and 8, respectively. (Id. at TRAVELERS-000383.)

The Policy defines Covered Causes of Loss as:

B. COVERED CAUSES OF LOSS

Covered Causes of Loss means RISKS OF DIRECT PHYSICAL LOSS unless the loss is:

1. Excluded in Section C., Exclusions

2. Limited in Section D., Limitations; or

3. Excluded or limited in the Declarations or by endorsement.

(Id. at TRAVELERS-000429.)

The Policy at the Section C., Exclusions, includes the following exclusions for Collapse and certain Other Types of Losses:

C. EXCLUSIONS

* * *

2. We will not pay for loss or damage caused by or resulting from any of the following:

* * *

a. Collapse

(1) Collapse, including any of the following conditions of property or any portion of the property:

(a) An abrupt falling down or caving in;

(b) Loss of structural integrity, including separation of portions of the property in danger of falling down or caving in; or

(c) Any cracking, bulging, sagging, bending, leaning, settling, shrinkage, or expansion as such condition relates to Paragraphs (a) or (b) above.

But if collapse results in a Covered Cause of Loss at the described premises, we will pay for the loss or damage caused by that Covered Cause of Loss.

(2) This Exclusion does not apply:

(a) To an abrupt collapse to the extent that coverage is provided under the Abrupt Collapse Additional Coverage in (3) below[.]

* * *

i. Other Types of Losses

(1) Wear and tear;

(2) Rust, or other corrosion, decay, deterioration, hidden or latent defect or any quality in property that causes it to damage or destroy itself;

* * *

(Id. at TRAVELERS 000429, 000432-00435.)

The Collapse exclusion includes an exception providing for Abrupt Collapse Additional Coverage, which states, in relevant part:

(3) Abrupt Collapse Additional Coverage

The term Covered Cause of Loss includes abrupt collapse as described and limited under Paragraphs (a) through (g) below.

(a) As used in this Additional Coverage, abrupt collapse means abrupt falling down or caving in of a building or any portion of a building with the result that the building or portion of the building cannot be occupied for its intended purpose.

(b) We will pay for direct physical loss of or damage to Covered Property, caused by abrupt collapse of a building or any portion of a building that is insured under this Coverage Form, or that contains Covered Property insured under this Coverage Form, if such collapse is caused by one or more of the following:

(i) Building decay that is hidden from view, unless the presence of such decay is known to an insured prior to collapse;

* * *

(c) Abrupt Collapse under Paragraphs (3)(a) and (b) above does not apply to:

(i) A building or any portion of a building that is in danger of falling down or caving in;

(ii) A portion of a building that is standing, even if it has separated from another portion of the building;

(iii) A building that is standing or any portion of a building that is standing, even if it shows evidence of cracking, bulging, sagging, bending, leaning, settling, shrinkage, or expansion.

(Id. at TRAVELERS 000433-000434.)

3. The July 27, 2018 Incident

In the early morning hours of July 27, 2018, an 8-inch thick, 4-foot-6-inch high, 48-foot long precast concrete spandrel beam fell from the north end of the top-level Garage roof onto the top-level parking deck (the "Incident"). (Cty. SMF ¶ 24, Trav. SMF ¶ 46.) Later the same day, Joseph Barbato of Joseph Barbato Associates ("JBA"), an outside consulting structural engineer for the County, conducted a site visit at the Garage, during which he reviewed the area of the fallen beam and then reviewed "the remainder of the structure to assess the potential for further collapse." (7/30/18 JBA Rept. at 2, Middlebrooks Dec. Ex. L, ECF No. 61-15.) Barbato documented his findings in a letter Report dated July 30, 2018, addressed to County officials, Thomas N. Micozzie and Jack A. Bierling Jr. (Cty. SMF ¶ 30; 7/30/18 JBA Rept.)

The July 30, 2018 JBA Report did not opine as to cause of the Incident, but observed:

Based on our site review, it appears that the spandrel was connected to the supporting pre-cast concrete girders via steel weld plates cast into the concrete and connected on site during the original construction with three welds at each girder. We observed that these welds had sheared allowing the spandrel to fall to the main roof deck below (refer to Photos 5 and 6).

(JBA 7/30/18 Rept. at 5.) The Report further reflects that in the "immediate area of the collapse," Barbato reviewed the "welds connecting the spandrel on the south end of the high roof to the supporting girders" and the "steel plates and welds connecting the south spandrel to the sides of the supporting girders," but was unable during the site visit to review and verify the condition of the connections between the spandrels on the east and west sides of the high roof and the supporting double-T elements." (Id. at 6.) However, the Report states that "[w]e observed out-of-line and out-of-plumb conditions of the spandrels at the east and west sides of the high roof which indicate movement of these elements has occurred." (Id. ) The Report also includes the following observations about the condition of the overall Garage:

• The majority of the lateral connections between the main roof spandrel beams and supporting columns are displaying evidence of failure, movement and/or corrosion.... The failure of this type of connection warranted the removal of the spandrel beam at the northwest corner

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