Hamm v. Allstate Prop. & Cas. Ins. Co.

• Citation: 908 F.Supp.2d 656
• Decision Date: 07 November 2012
• Docket Number: Civil Action No. 2:11–CV–00614.
• Court: U.S. District Court — Western District of Pennsylvania
• Parties: George R. HAMM and Alethia A. Hamm, his wife, Plaintiffs, v. ALLSTATE PROPERTY & CASUALTY INSURANCE COMPANY, Defendant.

908 F.Supp.2d 656

George R. HAMM and Alethia A. Hamm, his wife, Plaintiffs,

v.ALLSTATE PROPERTY & CASUALTY INSURANCE COMPANY, Defendant.

Civil Action No. 2:11–CV–00614.

United States District Court,

W.D. Pennsylvania.

Nov. 7, 2012.

Richard W. Kelly, Jr.Kelly Law, Pittsburgh, PA, for Plaintiffs.

Kelley A. Morrone, Dibella Geer McAllister & Best, Pittsburgh, PA, for Defendant.

OPINION

MARK R. HORNAK, District Judge.

Plaintiffs George R. and Alethia A. Hamm, husband and wife, allege claims for breach of contract and bad faith against Defendant Allstate Property & Casualty Insurance Company (“Allstate”). Specifically, Plaintiffs seek to recover under a homeowner's insurance policy for alleged damage to their property, and also contend that Defendant acted in bad faith in denying their insurance claim in violation of Pennsylvania law under 42 Pa.C.S.A. § 8371.

Pending before the court is Defendant's Motion for Summary Judgment seeking dismissal of Plaintiffs' claims in their entirety, ECF No. 17, which Plaintiffs oppose, ECF No. 21. After careful consideration of the parties' submissions and for the reasons set forth below, Defendant's Motion for Summary Judgment is granted.

I. BACKGROUND

Unless indicated otherwise, the following material facts are undisputed. Any disputed facts will be viewed in the light most favorable to the Plaintiffs.

Plaintiffs reside at 2473 Laketon Road in Pittsburgh, Pennsylvania 15221. Compl. ¶ 1. Allstate is an Illinois insurance company. Notice of Removal ¶ 9 (hereinafter “Def.'s Not. Rem.”); Answer ¶ 2. Allstate issued a contract of insurance to the Plaintiffs that insured their 2473 Laketon Road residence and became effective on September 12, 2009. Pls.' Resp. to Def.'s Concise Statement of Material Facts ¶¶ 2–3, ECF No. 20 (hereinafter “Pls.' Stat. Facts”); Defs.' Concise Statement of Material Facts ¶¶ 2–3, ECF No. 16 (hereinafter “Def.'s Stat. Facts”); ECF No. 18–1 at 3.

The pertinent language in the insurance policy states: “Losses We Cover Under Coverages A and B: We will cover sudden and accidental direct physical loss to property described in Coverage A—Dwelling Protection and Coverage B—Other Structures Protection except as limited or excluded in this policy.” ECF No. 18–1 at 11.

The policy also contains certain exclusions:

Losses We Do Not Cover Under Coverage A, Coverage B, and Coverage C:

A, We do not cover loss to the property described in Coverage A—Dwelling Protection or Coverage B—Other Structures Protection consisting of or caused by the following: ...

7. a) wear and tear, aging, marring, scratching, deterioration, inherent vice, or latent defect;

b) mechanical breakdown;

c) growth of trees, shrubs, plants or lawns whether or not such growth is above or below the surface of the ground;

d) rust or other corrosion;

e) smog, smoke from the manufacturing of any controlled substance, agricultural smudging and industrial operations;

f) settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings;

g) insects, rodents, birds or domestic animals. We do cover the breakage of glass or safety glazing materials caused by birds; or h) seizure by government authority.

Id. at 17–18. The policy continues that:

B. We do not cover loss to the property described in Coverage A—Dwelling Protection or Coverage B—Other Structures Protection when:

1) there are two or more causes of loss to the covered property; and

2) the predominant cause(s) of loss is (are) excluded under items A.1 through A.8 above.

Id. at 19. Finally, under Section C, the policy provides that it does not cover “9. Weather Conditions that contribute in any way with a cause of loss excluded under Losses We Do Not Cover Under Coverage A, Coverage B and Coverage C to produce a loss.” Id. at 20.

Mr. Hamm first noticed bulging of the stone veneer wall in the rear of his home sometime in 2008 and filed a claim with Allstate on November 13, 2008. Pls.' Stat. Facts ¶ 4; Def.'s Stat. Facts ¶ 4; George Hamm Dep. 7:20–9:7, Feb. 9, 2012; ECF No. 18–8 at 2. George Quinton, an Allstate adjuster, conducted an inspection of the rear wall of the residence on November 14, 2008. Vogel Dep. 10:8–9, Feb. 9, 2012; ECF No. 18–8 at 7.¹ Quinton determined that the “damage was not covered, the pull away was caused by deterioration.” ECF 18–8 at 5; Vogel Dep. 33:4–8. In the Field Documentation Template, Quinton noted that coverage was denied because it was “not sudden” and that it was “near ready to fall off liability.” ECF No. 18–8 at 7. Allstate manager David Vogel explained that this meant that Quinton “observed an ongoing problem” and marked this in the Hamm file because of the “likelihood that there could be further problems down the line.” Vogel Dep. 35:21–36:7.

In a letter dated November 19, 2008, Allstate denied this claim. Pls.' Stat. Facts ¶ 5; Def.'s Stat. Facts ¶ 5; ECF No. 18–3. The denial letter stated that Allstate:

will cover sudden and accidental direct physical loss to property described in Coverage A Dwelling Protection and Coverage B Other Structures Protection except as limited or excluded in this policy. Losses We Do Not Cover Under Coverages A and B: We do not cover loss to the property described in Coverage A Dwelling Protection or Coverage B Other Structures Protection consisting of or caused by:

13a) wear and tear, aging, marring, scratching, deterioration, inherent vice, or latent defect;

b) mechanical breakdown;

c) growth of trees, shrubs, plants or lawns whether or not such growth is above or below the surface of the ground;

d) rust or other corrosion, mold, wet or dry rot;

e) smog, smoke from the manufacturing of any controlled substance, agricultural smudging and industrial operations;

f) settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings;

g) insects, rodents, birds or domestic animals. We do cover the breakage of glass or safety glazing materials caused by birds; or

h) seizure by government authority.

ECF No. 18–3 at 1. On December 3, 2008, Vogel noted in the Hamm's History Report that he informed Mrs. Hamm that the wall separation was “ongoing and not recent.” ECF No. 18–8 at 6.²

On May 27, 2010, the rear stone veneer of the Plaintiffs' residence fell. Pls.' Stat. Facts ¶ 11; Def.'s Stat. Facts ¶ 11; George Hamm Dep. 15:15–16:3. Plaintiff's then filed a claim with Defendant for the damage to the house as a result of the fallen wall. Pls.' Stat. Facts ¶ 12; Def.'s Stat. Facts ¶ 12. In both the May 2010 claim and the earlier November 2008 claim, Plaintiffs contended that winds from a bad storm had caused the damage to the rear exterior wall of their home. Pls.' Stat. Facts ¶ 16; Def.'s Stat. Facts ¶ 16; ECF No. 18–8 at 2; ECF No. 18–9 at 1.³

According to the Claim History Report, Allstate's outside adjuster Michael Madill completed a field inspection in early June 2010. ECF No. 18–9 at 2–3. While Mrs. Hamm did not state whether or not Madill performed an inspection and could not remember a name, she did recall that after the wall collapsed a male from Allstate came to her residence. Alethia Hamm Dep. 55:1–9. In his report, Madill noted that Mr. Hamm's nephew and a friend “showed me around” the property. Id. at 3. Madill reviewed the 2008 claim and a prior claim from 2010 that included photos that showed the bulge on the rear of the home. Id. Madill also asked Mr. Hamm “if he did anything to address the condition of the wall since 2008—he had not.” Id. The report then notes that the loss would not be covered because it was “not sudden,” Id. Another entry in the Claim History Report indicates that Madill advised Vogel that he had “inspected this loss” and advised the insureds (the Hamms) that “there was no coverage for the failure of the stone facing as this was an ongoing matter and not sudden and accidental.” ECF No. 18–9 at 2; Vogel Dep. 10:9–10.

Vogel stated that Madill made the initial decision to deny the claim and that he supported it. Vogel Dep. 11:10–15. A letter dated June 8, 2010 denying the claim stated:

Losses We Cover Under Coverages A and B:

We will cover sudden and accidental direct physical loss to property described in Coverage A Dwelling Protection and Coverage B Other Structures Protection except as limited or excluded in this policy.

Losses We Do Not Cover Under Coverage A, Coverage B, and Coverage C:

A. We do not cover loss to the property described in Coverage A Dwelling Protection or Coverage B Other Structures Protection consisting of or caused by the following:

7. a) wear and tear, aging, marring, scratching, deterioration, inherent vice, or latent defect;

b) mechanical breakdown;

c) growth of trees, shrubs, plants or lawns whether or not such growth is above or below the surface of the ground;

d) rust or other corrosion;

e) smog, smoke from the manufacturing of any controlled substance, agricultural smudging and industrial operations; f) settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings;

g) insects, rodents, birds or domestic animals. We do cover the breakage of glass or safety glazing materials caused by birds; or

h) seizure by government authority.

ECF No. 18–5 at 1.

After the claim's denial, Allstate hired Jerome Paulick of Rudick Forensic Engineering to inspect the Hamm residence on June 22, 2010. Pls.' Stat. Facts ¶¶ 14, 19; Def.'s Stat. Facts ¶ 14; ECF No. 18–6 at 1. In his report dated June 24, 2010, Paulick stated that “[t]he weather on May 27, 2010 did not cause the eventual final collapse of the rear stone veneer wall.” ECF No. 15–1 at 14. In his April 30, 2012 report, in response to Plaintiffs' expert's report, Paulick concluded that:

The rear wall was in an ongoing state of collapse over an extended period of time and was not a sudden or accidental event. The damages were caused by wear and tear and deterioration, latent defect with an inadequate number of masonry ties,...