Totty v. Chubb Corp.

• Decision Date: 28 August 2006
• Docket Number: Civil Action No. 05-111.
• Citation: 455 F.Supp.2d 376
• Parties: Helen TOTTY, Plaintiff, v. CHUBB CORPORATION and Great Northern Insurance Company, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

Page 376

455 F.Supp.2d 376

Helen TOTTY, Plaintiff, v. CHUBB CORPORATION and Great Northern Insurance Company, Defendants.

Civil Action No. 05-111.

United States District Court, W.D. Pennsylvania.

August 28, 2006.

Maurice A. Nernberg, Jr., Maurice A. Nernberg & Associates, Pittsburgh, PA, for Plaintiff.

Daniel L. Rivetti, Dennis St. John Mulvihill, Robb Leonard Mulvihill, Pittsburgh, PA, for defendants.

OPINION AND ORDER OF COURT

AMBROSE, Chief Judge.

Plaintiff, Helen Totty ("Plaintiff'), alleges claims for breach of contract and bad faith against Defendants Chubb Corporation, doing business as Chubb Group of Insurance Companies ("Chubb"), and Great Northern Insurance Company ("Great Northern") (collectively "Defendants"). Specifically, Plaintiff seeks to recover under a homeowner's insurance policy for alleged damage to her property and also contends that Defendants acted in bad faith in violation of Pennsylvania law.

Pending before the Court is a Motion for Summary Judgment filed by Defendants seeking dismissal of Plaintiffs claims in their entirety. (Docket No. 22). Plaintiff opposes Defendants' Motion. (Docket No. 26). After careful consideration of the parties' submissions and for the reasons set forth below, Defendants' Motion for Summary Judgment (Docket No. 22) is granted in part and denied in part.

I. BACKGROUND

A. Factual Background

Unless otherwise indicated, the following material facts are undisputed. I will view any disputed facts in the light most favorable to Plaintiff.

Plaintiff resides at 4303 Bigelow Boulevard, Pittsburgh, Pennsylvania, 15213, a 100 year old home. Plaintiff was issued a policy of insurance covering the period from January 4, 2002 to January 4, 2003 ("Policy").¹ Defendants claim that the Policy was issued by Defendant Great Northern, and the Coverage Summary Page of the Policy identifies Great Northern as the issuer of the Policy. Plaintiff, however, alleges that the Policy was issued by Defendant Chubb. The Policy provided coverage for Plaintiff's residence at 4303 Bigelow Boulevard and its contents, subject to the Policy's terms and conditions.

On or about September 9, 2002, Plaintiff submitted a Property Loss Notice indicating that her dwelling had been damaged by vibrations from construction equipment used by the City of Pittsburgh in July 2002 to resurface Bigelow Boulevard. The alleged damage listed included cracked walls, damaged door frames, and plumbing leaks. The notice also indicated that it appeared the right side of the dwelling was sinking. See Docket No. 24, Ex. B.

Property Adjuster Tim Cusick was assigned to investigate and handle Plaintiff's claim. On October 16, 2002, Lorey Caldwell of Rudick Engineering provided Cusick with a report that stated, in part, as follows:

No ground vibration related damages were observed throughout the residence. Most of the cracking observed throughout the house was recent, and related to foundation settlement induced by the extended and ongoing dry weather throughout the summer. Other cracking damages were localized in nature, and could be correlated to plumbing problems and leaks in various locations of the house, typical residential construction details, and normal settlement, movement, and shifting that can be found to various degrees of severity in similar houses built in this climate.

. . . . . .

No evidence of Minor level scissor cracking was observed in any of the plaster walls or ceilings. Although the owner reported Major level concrete and masonry cracking to the foundation walls, concrete sidewalks and patios, the quarry tile at the front entrance, and the concrete block walls of the detached garage, most of the reported cracking was not recent, and none of the cracking was related to the construction activities.

Docket No. 24, Ex. D, p. 5 ("Rudick Report"). Plaintiff admits the existence of the Rudick Report but disputes the Report's conclusions.

On November 19, 2002, Cusick sent a letter to Plaintiff denying coverage for the structural property damage portion of Plaintiffs claim. Id., Ex. E. Defendants contend that Cusick relied on the Rudick Report and the Structural Movement and Earth Movement exclusions in the Policy in denying coverage. Cusick did not receive a response from Plaintiff to the November 19 letter. On December 17, 2002, Cusick wrote a follow-up letter reiterating his position and advising that he would review any claim relating to fallen pictures and other personal property damage. Id., Ex. F.

On December 23, 2002, Cusick received a letter from Plaintiff dated December 10, 2002, indicating that Plaintiff was having the Rudick Report reviewed by an architect and his structural engineer and that she was retaining her own experts and counsel to pursue her claim. Id., Ex. G. Cusick followed up by letter dated January 30, 2003, requesting that Plaintiffs counsel contact him and reiterating that the insurer would consider any additional information relating to coverage. Id., Ex. H.

In a letter dated April 15, 2003, Plaintiffs counsel indicated to Cusick that he and Plaintiff were engaging experts to inspect the damage to Plaintiffs property and to respond to the Rudick Report, Id., Ex. I. Cusick again requested that Plaintiff submit her position in writing and provide expert documentation if she was disputing the insurer's coverage position. Id., Ex. K. On May 12, 2003, Plaintiffs counsel sent a letter to Cusick expressing surprise at Cusick's request. Id., Ex. L.

In a letter dated August 28, 2003, Plaintiffs counsel informed Cusick that they were concluding the investigation into the cause of the damage to Plaintiffs home and that, "[a]ssuming the results of the final investigation" supported the preliminary conclusions, the loss would total $1.3 million in addition to a contents claim and incidental claims. Id., Ex. N. On September 10, 2003, Cusick wrote to Plaintiffs counsel indicating he still had not received any documentation supporting another cause of loss, and suggesting that the parties and the experts meet to resolve any differences. Id., Ex. O. Plaintiff admits receiving this letter and a follow-up letter dated October 10, 2003, but she did not respond to either letter.

On November 10, 2003, Cusick sent a letter to Plaintiffs counsel stating he was closing the file. Approximately four months later, Plaintiff filed the instant lawsuit. After she filed suit and over three years after the alleged damage occurred, Plaintiff produced a report prepared by Morris Knowles & Associates and Pennsylvania Soil & Rock, Inc. ("Morris Knowles Report"). Id., Ex. R. The report concluded that Plaintiffs house was built on soils known as the Carmichaels Deposit, and that vibratory waves from the construction equipment (a double drum vibratory compactor) caused the loose to medium dense sand layer in the Carmichaels Deposit to densify, causing the very stiff to hard silty clay layers above the sand layer to settle over time, eventually affecting the foundation of the house.

According to Defendants, Great Northern retained another expert, Penn Environmental & Remediation, Inc., to review and comment on the Morris Knowles Report. In November 2005, Penn Environmental & Remediation concluded that the settlement of Plaintiff's property is the likely result of the shrinkage of expansive clay soil on which Plaintiffs home was built and related to the reduced moisture content of that soil in 2002. Id., Ex. U. In addition, the insurer retained a structural engineer, Randal Exley of ARRCA, to inspect Plaintiffs home. In a December 29, 2005 Report, Exley agreed with the Rudick Report that the cracking was caused by normal thermal expansion and contraction and differential expansion and contraction between materials with differing expansion coefficients. Exley also observed, inter alia, that the house showed no signs of ongoing settlement damage and concluded that the claimed damages to Plaintiffs plaster walls and trim was caused by the effects of long-term deflection ("creep") of the wood framing members. Id., Ex. V.

B. Procedural Background

On or about March 11, 2004, Plaintiff commenced this action via Writ of Summons in the Court of Common Pleas of Allegheny County. Plaintiff filed a Complaint against Defendants in that same court on January 4, 2005. On January 31, 2005, Defendants removed the case to this Court. (Docket No. 1). On March 18, 2005, Plaintiff filed a First Amended Complaint against Defendants. (Docket No. 8). Defendants answered Plaintiffs First Amended Complaint on March 28, 2005. (Docket No. 9). On January 30, 2006, Defendants filed the instant Motion for Summary Judgment, Brief in Support, and Concise Statement of Material Facts. (Docket Nos. 22-24).² On February 28 2006, Plaintiff filed a Brief in Opposition, as well as a Statement of Facts and Answer to Defendants' Statement of Facts. (Docket Nos. 25, 26).. Defendants filed a Reply Brief and Response to Plaintiffs Statement of Additional Material Facts on March 20, 2006. (Docket Nos. 32, 33). Defendants' Motion is now ripe for my review.

II STANDARD FOR SUMMARY JUDGMENT

Summary judgment may only be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). Rule 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against the 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 Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

In considering a motion for summary judgment, this Court must examine the facts in a light most favorable to the party opposing the motion. Int'l Raw Materials, Ltd. v. Stauffer...