Dougherty v. Allstate Property & Casualty Insurance Co.

185 F. Supp. 3d 585, 2016 U.S. Dist. LEXIS 59667, 2016 WL 2593848
CourtDistrict Court, E.D. Pennsylvania
DecidedMay 5, 2016
DocketCIVIL ACTION NO. 14-7270
StatusPublished
Cited by11 cases

This text of 185 F. Supp. 3d 585 (Dougherty v. Allstate Property & Casualty Insurance Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dougherty v. Allstate Property & Casualty Insurance Co., 185 F. Supp. 3d 585, 2016 U.S. Dist. LEXIS 59667, 2016 WL 2593848 (E.D. Pa. 2016).

Opinion

MEMORANDUM

O’NEILL, District Judge

This case springs from a January 2014 water leak at a property at 407 W. South Avenue, Glenolden, Pennsylvania owned by plaintiff David Dougherty which was insured under a policy of insurance issued by defendant Allstate Property and Casualty Insurance Company. Allstate now seeks summary judgment in its favor on plaintiffs breach of contract claim and his claim for bad faith pursuant to;42 Pa. C.S.A. § 8371. Dkt. No, 14. Plaintiff moves for summaiy judgment in his favor on his claim for breach of contract. Dkt. No. 17. In addition to the parties’ motions, also before me are plaintiffs response to defendant’s motion, Dkt. No. 16, defendant’s reply, Dkt. No. 18, defendant’s response to plaintiffs motion, which includes a coun-terstatement of undisputed material facts, Dkt. No. 19, plaintiffs response to defendant’s counterstatement of material facts, Dkt. No. 20, and plaintiffs reply, Dkt. No. 21. For the reasons that follow, I will grant defendant’s motion and deny plaintiffs motion.

BACKGROUND

On January 20, 2014, plaintiff reported a claim for water damage to the property to Allstate, Dkt. No. 17 at ¶ 2. Allstate began to investigate plaintiffs claim thereafter. Dkt. No. 14 at ¶ 49. On January 21, 2014, Allstate issued a reservation of rights letter by which it reserved its right “to later deny coverage obligation and assert a defense of no coverage under the policy because Allstate’s investigation is ongoing as to the cause of loss as well as the verification, that heat was maintained in the home.” Dkt. No. 14-14. The letter explained that Allstate would also “avail [itself] of any other policy defenses, which may arise.” Id.

Allstate ultimately denied plaintiffs claim for damages by letter dated June 9, 2014, citing both the occupancy/heat exclusion and the planning, construction or maintenance exclusion set forth in his policy. Dkt. No. 17 at ¶ 16; see also Dkt. No. 17-10. The letter explained that “[o]ur investigation revealed that reasonable care was not used in maintaining the heat at the loss location.” Dkt. No. 17-10 at ECF p. 3. At his deposition, Allstate’s claims adjuster explained that “[fit’s actually two different exclusions.. .that have been used” to deny coverage — a “freezing exclusion” and a “planning, construction or maintenance” exclusion. Dkt. No. 17-9 at 33:12-14, 34:19-22 (Hanks Dep.). He testified that Allstate “solely relied on [its] engineer and the insured’s technician” in [588]*588determining the basis for its denial of coverage. Id. at 47:13-15.

The Allstate-issued insurance policy for the property provides, in relevant part:

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
1. Freezing of:
a) plumbing, fire protective sprinkler systems, heating or air conditioning systems;
b) household appliances; or
c) swimming pools, hot tubs and spas within the dwelling, their filtration and circulation systems;
or discharge, leakage or overflow from within a), b) or c) above, caused by freezing, while the building structure is vacant, unoccupied or being constructed unless you have used reasonable care to:
a) maintain heat in the building structure; or
b) shut off the water supply and drain the system and appliances.
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C. We do not cover loss to the property described in Coverage A — Dwelling Protection, Coverage B — Other Structures Protection or Coverage C — Personal Property Protection consisting of or caused by the following:
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10. Planning, Construction or Maintenance, meaning faulty, inadequate or defective:
a) planning, zoning, development, surveying, siting;
b) design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction;
c) materials used in repair, construction, renovation or remodeling; or
d) maintenance
of property whether on or off the residence premises by any person or organization.

Dkt. No. 14-2at ECF p. 52-54.

In January, 2014, at the time of the discharge of water which is central to this action, plaintiff was living in Colorado and his home, which was being marketed for sale, was unoccupied. Dkt. No. 17 at ¶4. The main heating source for plaintiffs property is an oil furnace supplied by a 275 gallon oil tank. Dkt. No. 14 at ¶ 8. At the time of the leak, the service sticker on the furnace last reflected an annual service visit on January 2, 2007. Id. at ¶ 10. Plaintiff has no direct evidence of service to the furnace at the property for the years 2008 through 2013. Id at ¶¶ 27-32. Nor has he set forth evidence that the furnace was serviced in 2014 prior to the incident. Id. at ¶33. Instead, plaintiff testified that when he lived at the property before moving to Colorado in 2009, he performed some maintenance on the furnace: changing air filters due to his concerns over dust and allergies and hiring technicians who worked on the furnace when they installed a central air system. Dkt. No. 16 at ¶ 27; Dkt. No. 16-4 at 29:8-31:8.

From October 2009 through August 1, 2011, the property was unoccupied and listed for sale or rent. Dkt. No. 14 at ¶ 11. On August 1, 2011, plaintiff rented the property to Bam Pepe. Id. at ¶ 12. Plaintiffs property manager testified that the HVAC system was operational when Pepe’s lease commenced and that Pepe asked for no service to the HVAC system during her lease. Dkt. No. 16 at ¶ 18. Under the terms of her lease, Pepe was obligated to maintain the property’s heating system. Dkt. No. 16-6; see also Dkt. No. 16 at ¶ 18. Plaintiff and his property [589]*589manager testified that Pepe represented to them that her spouse or fiancé was an HVAC technician who would do whatever work was necessary to meet her obligation under the lease agreement to supply the property with heat. Dkt. No. 16 at ¶ 16; Dkt. No. 16-4 at 19:9-13 (“the only thing she mentioned to me about her husband was that he was an HVAC technician, had a full-time job, and he was helping maintain some of the property”); Dkt. No. 16-5 at 16:7-18 (“Barry [sic] had informed us her fiance [sic] was an HVAC contractor or worked for an HVAC company and any time that repairs or something like that was needed, Barry would call me and then... she called me back and said my husband or fiancé already took care of it”). Nevertheless, there is no testimony of record from Pepe or her spouse/fiancé or any other evidence regarding any service that may have been performed on the furnace during her tenancy.

Plaintiff evicted Pepe from the property on or about April 1, 2013, as Pepe had been subletting the premises to others in violation of her lease agreement and Gle-nolden Borough’s requirements. See Dkt. No. 14 at ¶ 13; Dkt. No. 16 at ¶ 13. After the eviction, the property was again listed for sale. Dkt. No. 14 at ¶ 19.

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185 F. Supp. 3d 585, 2016 U.S. Dist. LEXIS 59667, 2016 WL 2593848, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dougherty-v-allstate-property-casualty-insurance-co-paed-2016.