Currie v. State Farm Fire & Cas. Co.

• Decision Date: 19 August 2014
• Docket Number: CIVIL ACTION No. 13-6713
• Court: U.S. District Court — Eastern District of Pennsylvania
• Parties: ROBERT CURRIE and KATHLEEN CURRIE, Plaintiffs, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

ROBERT CURRIE and KATHLEEN CURRIE, Plaintiffs, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

CIVIL ACTION No. 13-6713

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

AUGUST 19, 2014

MEMORANDUM

ROBERT F. KELLY, Sr. J.

Presently before the Court is Defendant, State Farm Fire and Casualty Company's ("Stat Farm"), Motion for Partial Summary Judgment, Plaintiffs, Robert Currie and Kathleen Currie's ("Plaintiffs"), Response, State Farm's Reply, and Plaintiffs' Sur-Reply. For the reasons stated below, the Motion is granted in part and denied in part.

I. BACKGROUND

On October 3, 2013, Plaintiffs instituted this action by filing a Writ of Summons in the Bucks County Court of Common Pleas, and on October 21, 2013, Plaintiffs filed a Complaint averring breach of contract (Count I), and bad faith (Count II). On November 19, 2013, State Farm filed a Notice of Removal to this Court.

Plaintiffs, husband and wife, own a dwelling at 504 Heatons Mill Drive, Langhorne, Pennsylvania (the "Property") which was covered by a homeowner's insurance policy (the "Policy") issued by State Farm. On October 29, 2012, while Plaintiffs were away in Washington State, Superstorm Sandy struck the area causing a tree on the Property to crash into the dwelling resulting in damage. Compl. ¶ 4. The housesitter immediately contacted Plaintiffs to report the tree strike. (Pls.' Resp. Mot. Summ. J at 2.) Plaintiffs then contacted State Farm to report the loss. (Id.) They also contacted Kanga Roof ("Kanga"), a roofing company with whom Plaintiffs had a maintenance contract. (Id.)

At a later date, an inspection of the loss was conducted by State Farm adjuster, Travis Hengst ("Hengst"), and Ted Vingless ("Vingless") of Kanga Roof. (Id. at 3.) Plaintiffs assert that the inspection focused on the exterior damage to the Property, although Plaintiffs recall showing interior damage in the first, second, and third floors to Hengst. (Id.) Plaintiffs recall Vingless verbally quoting the roof replacement at more than $100,000. (Id.)

Thereafter, Plaintiffs received State Farm's estimate dated November 19, 2012, and State Farm's check for $56,940.54 (the actual cash value amount of the estimate less the deductible). (Id.) Plaintiff questioned the adequacy of the estimate including the roof replacement allowance of $50,338.47, especially in light of the verbal estimate given by Kanga of more than $100,000. (Id., Ex. C at 15.) Plaintiff then contacted Russell Roofing Contractors ("Russell") for a further estimate, and hired Richard Green & Son Public Adjuster ("Green"), and Tantala Associated, LLC ("Tantala") to assess damages. (Id. at 3.) On March 8, 2013, Green submitted to State Farm its estimated loss of $363,804.98, which incorporated estimates for roof and chimney replacement by Russell in the amount of $132,944 and $29,158. (Id. at 3-4.) The engineeringreport of Tantala was also submitted to State Farm. (Id.) These submissions prompted State Farm to hire its own engineer, Gary Popolizio (Popolizio"), who inspected the dwelling on April 11, 2013, with Hengst. (Id. at 4.) This inspection resulted in a second estimate from State Farm dated May 27, 2013, and a supplemental payment to Plaintiffs in the amount of $9,502.09. (Pls.' Resp., Ex. D.)

Plaintiffs assert that they still did not have sufficient funds to properly repair the damages from the loss and, subsequently, through Green, sent State Farm written demands for appraisal on June 4 and June 18, 2013.¹ (Id., Ex. J.) State Farm rejected the demand in a denial letter dated July 2, 2013, which states:

This claim involves certain items for which State Farm has not admitted liability. These items include, but are not necessarily limited to, sanding and refinishing of the wood floors. Since the dispute goes beyond the amount of loss, appraisal is not anappropriate method of resolution.

(Def.'s Mot. Summ. J., at 4.)

State Farm filed the instant Motion for Partial Summary Judgment on June 16, 2014. Plaintiffs filed a Response on June 27, 2014. State Farm filed a Reply on July 11, 2014, and Plaintiffs a Sur-Reply on July 16, 2014.

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 56(c) states that summary judgment is proper "if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." See Hines v. Consol. Rail Corp., 926 F.2d 262, 267 (3d Cir. 1991). The Court asks "whether the evidence presents a sufficient disagreement to require submission to the jury or whether . . . one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). The moving party has the initial burden of informing the court of the basis for the motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "A fact is material if it could affect the outcome of the suit after applying the substantive law. Further, a dispute over a material fact must be 'genuine,' i.e., the evidence must be such 'that a reasonable jury could return a verdict in favor of the non-moving party.'" Compton v. Nat'l League of Prof'l Baseball Clubs, 995 F. Supp. 554, 561 n.14 (E.D. Pa. 1998).

Summary judgment must be granted "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. Once the moving partyhas produced evidence in support of summary judgment, the non-moving party must go beyond the allegations set forth in its pleadings and counter with evidence that presents "specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e); see Big Apple BMW, Inc. v. BMW of N. Am. Inc., 974 F.2d 1358, 1362-63 (3d Cir. 1992). "More than a mere scintilla of evidence in its favor" must be presented by the non-moving party in order to overcome a summary judgment motion. Tziatzios v. United States, 164 F.R.D. 410, 411-12 (E.D. Pa. 1996). If the court determines that there are no genuine issues of material fact, then summary judgment will be granted. Celotex, 477 U.S. at 322.

III. DISCUSSION

A. Count I- Breach of Contract

State Farm first asserts that Plaintiffs' breach of contract claim as to the alleged damages to the wood floors of the Property should be dismissed because there is no genuine issue of material fact that the wood floors were damaged by Superstorm Sandy. (Def.'s Mot. Summ. J. at 10.) Under Pennsylvania law, a plaintiff asserting a claim for breach of contract must allege "the existence of a contract, including its essential terms; . . . a breach of a duty imposed by the contract; and . . . resultant damage." Pittsburgh Const. Co. v. Griffith, 834 A.2d 572, 580 (Pa. Super. 2003).

State Farm claims that Plaintiffs have failed to establish that the loss sustained to the Property is covered by the Policy. (Def.'s Mot. Summ. J. at 12.) State Farm states that the "[P]olicy provides coverage for accidental direct physical loss to the covered property subject to specific conditions and exclusions." (Id.) It further asserts that after inspecting the Property,independent adjuster Hengst did not provide an estimate for any damages to the Property's hardwood floors. (Id.) State Farm adds that Popolizio's report concluded that there was no loss related damage to the wood floors of the Property, and Tantala's January 15, 2013 report, provided by Plaintiffs, does not dispute Popolizio's opinion that the Property's floors were not damaged by the storm. (Id.) State Farm maintains that it denied Plaintiffs' request for appraisal because their claims involved items for which it had not admitted liability or coverage under the terms of the Policy, including sanding and refinishing of the Property's wood floors. (Id.)

Plaintiffs respond that they have submitted evidence which raises a genuine issue of material fact as to whether State Farm breached the terms of the insurance contract. We agree. Plaintiffs assert that they have submitted the opinion of a flooring expert, Anthony Palandro ("Palandro"), who concluded in his report that "[i]nspection of the floors in the living room and master bedroom revealed sections with a discoloration on the surface of the planks." (Pls.' Resp., Ex. E.) Palandro added that it was his "professional opinion that the discoloration is consistent with storm damage and water intrusion." (Id.)

Defendant's structural engineer, Popolizio, stated in his May 2, 2013-report that on the third floor of the Property "a stain mark at the ends where two pieces of wood 'butted' together was noted in a few locations. These marks were not typical or consistent with water damage." (Def.'s Mot. Summ. J., Ex. E at 5.) With regard to the second floor of the Property, Popolizio stated that the "wood floor alongside the fireplace and chimney area was examined. Evidence of older surface blemishes including sanding marks and paint was noted. No signs of any water damage to the wood floor were observed." (Id. at 6.) With regard to the first floor, Popolizio stated that "[v]iewing the wood floors found similar conditions of blemishes, sanding marks, andpaint speckles to exist with no evidence of water damage to the floor within this room of the home." (Id.)

Here, we find a genuine of material fact at issue because both parties have submitted conflicting evidence from their experts concerning the issue of whether or not the storm damaged the Property's hardwood floors. Accordingly, viewing all the evidence which has been tendered in the light most favorable to the party opposing the motion, we deny State Farm's Motion for Summary Judgment on Plaintiffs' breach of contract cause of action. See Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir. 1987).

B. Count II- Bad Faith Claim

1. Refusal to Agree to an Appraisal

State Farm next asserts that Plaintiffs' bad...