Sherman v. John Brown Insurance Agency

38 F. Supp. 3d 658, 2014 WL 3855023, 2014 U.S. Dist. LEXIS 106825
CourtDistrict Court, W.D. Pennsylvania
DecidedAugust 5, 2014
DocketCiv. No. 2:14-572
StatusPublished
Cited by14 cases

This text of 38 F. Supp. 3d 658 (Sherman v. John Brown Insurance Agency) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sherman v. John Brown Insurance Agency, 38 F. Supp. 3d 658, 2014 WL 3855023, 2014 U.S. Dist. LEXIS 106825 (W.D. Pa. 2014).

Opinion

OPINION

MAURICE B. COHILL, JR., Senior District Judge.

In his Complaint [ECF No. 1-D], Plaintiff Michael Sherman (“Sherman”) seeks recovery from Arturo Coronel (“Coronel”), John M. Brown (“Brown”), and John Brown Insurance Agency, Inc. and John M. Brown Insurance Agency, Inc.1 (collectively “Agency”) for damages sustained because of Defendants’ negligence and breach of contract in procuring liability insurance to cover Sherman’s building contracting operations. Plaintiff alleges negligence against Coronel (Count I), negligence against Brown (Count II), negligence against the Agency (Count III), vicarious liability against the Agency (Count IV), and breach of contract against Brown and the Agency (Count V).

In Response, Defendants filed a Motion to Dismiss [ECF No. 4] Counts I though IV of Plaintiffs Complaint pursuant to Fed. R. Civ. Pro. 12(b)(6) for failure to state a claim upon which relief can be granted. For the reasons set out below, we deny Defendants’ Motion to Dismiss with respect to all claims.

I. Relevant Facts Alleged in Plaintiffs Complaint

In May 2011, in need of liability insurance to cover his building contractor operations, Plaintiff searched the internet, where he reviewed an advertisement published by or on behalf of the Agency, which “promoted the agency’s expertise in placing coverage for building contractors.” [ECF No. 1-4 at 5]. Plaintiff then teleconferenced with Coronel in May 2011. During this conference, Coronel represented himself to be an employee of the Agency, although he was not a licensed insurance producer under Pennsylvania law [ECF No. 1-4 at 5]. Plaintiff advised Coronel of the nature of his work and his interest in obtaining liability coverage to cover his contracting operations [ECF No. 1-4 at 5]. Coronel advised Plaintiff that the Agency could accommodate his request for liability coverage [ECF No. 1-4 at 5].

Around May 20, 2011 Coronel prepared an application allowing Plaintiff to obtain membership in the Preferred Contractors Association (“PCA”) [ECF No. 1-D at 6], Membership in PCA “presumably” would allow Plaintiff to acquire liability insurance coverage through Preferred Contractors [661]*661Insurance Company, RRG,2 LLC (“PCIC”) [ECF No. 1-D at 6]. PCJC offered different policies to contractors, some of which included coverage for roofing operations; however, Plaintiff was never offered a policy that included roofing coverage [ECF No, 1-D at 6].

The' PCA application was submitted to PCA and/or PCIC by Coronel and Brown containing a description of Plaintiffs contracting operations which allegedly was “incomplete and contrary to the representations that Sherman had made to Coronel regarding the nature of his operations.” [ECF No. 1-D at 6]. It is alleged that information available to the Defendants indicated that contractors such as Plaintiff, should be quoted in the “PCIC group program,” which included coverage for roofing, instead of the lower coverage “PCA group program,” which did not include roofing coverage [ECF No. 1-4 at 6]. Each of these programs would have provided insurance through PCIC, a distinct entity from the “PCIC group program.” [ECF No. 1^4 at 6]. Plaintiff, despite needing roofing coverage, was quoted in the “PCA group program,” not the “PCIC group program.”

The application submitted to PCA contained a signature and initials purported to be Plaintiffs, but the Plaintiff alleges he never signed the application [ECF No. 1-4 at 7]. Furthermore, Plaintiff states he never authorized any of the Defendants to initial or sign the application on his behalf [ECF No. 1-4 at 7]. The application included warranties, which Coronel had not reviewed with Plaintiff [ECF No 1-4 at 7]. These warranties were to be initialed by Sherman, however the initials contained in the application were not those of the applicant, Plaintiff, and as a result were “potentially incompatible” with Plaintiffs operations [ECF No. 1^4 at 7].

On May 20, 2011 or shortly thereafter, Defendants confirmed with Plaintiff that liability coverage had been obtained for his operations, and they requested a premium for the insurance. Plaintiff submitted full payment of $ 1064.00 to the Agency for the premium but did not receive a copy of the insurance policy until sometime after August' 4, 2011 [ECF No. 1-4 at 7]. The policy which was ultimately delivered to Plaintiff contained exclusions that were not referenced in the application for membership with PCA nor discussed between the parties [ECF No. 1-4 at 7].

On May 20, 2011 Plaintiff entered into a contract with JnJ Holdings, LLC to perform renovations at the property located at 94 Estella Avenue, Pittsburgh, Pennsylvania 15211 [ECF No. 1-4 at 7]. On August 4, 2011, Brett Frischolz, an independent contractor, died after falling from scaffolding erected by Plaintiff [ECF No. 1-4 at 8]. Thereafter, the estate of Brett Frischolz commenced an action against Plaintiff, JnJ Holdings, LLC, and the principal of JnJ Holdings, Kirk Williams [ECF No. 1-4 at 8]. PCIC offered a defense to the action on behalf of'Plaintiff but commenced a declaratory judgment action on October 22, 2012 alleging Plaintiffs operations were roofing operations and therefore excluded under the PCA Group policy [ECF No. 1-4 at 8].

Plaintiff has retained counsel to defend against the declaratory judgment [ECF No. 1-4 at 8]. Plaintiff alleges that whether or not coverage is found to exist for the August 4, 2011 accident, he has been damaged because of Defendants’ conduct and omissions [ECF No, 1-4 at 10]. Because [662]*662of the PCIC declaratory judgment action, there is the potential that Plaintiff will not have the appropriate liability coverage to cover the August 4, 2011 accident, and at the very least, Plaintiff has incurred expenses and harm due to Defendants’ actions. The harms Plaintiff has sustained include anxiety relating the declaratory judgment, a possible judgment against Plaintiff in the underlying case, time away from his self-employment, and involvement with the PCIC filed cases [ECF No. 1-4 at 10-11].

Additionally, Plaintiff did not have the opportunity to secure appropriate insurance coverage or elect not to participate in certain operations at the 94 Estella Avenue project because of the untimely delivery of the policy to Plaintiff [ECF No. 1-4 at 11]. Plaintiff alleges that his opportunity to resolve the wrongful death suit against him has been lost because PCIC rejected the policy limits demand made by the Frischolz Estate while pursuing the declaratory judgment action [ECF No. 1-4 at 11]. Finally, as a result of Defendants’ actions, Plaintiffs personal assets are exposed [ECF No. 1^4 at 11],

II. Standard of Ripview.

In Thompson v. Real Estate Mortgage Network, 748 F.3d 142 (3d Cir.2014), the Third Circuit Court of Appeals recently stated that in ruling on a Rule 12(b)(6) Motion to Dismiss for failure to state a claim upon which relief can be granted:

Under the “notice pleading” standard embodied in Rule 8 of the Federal Rules of Civil Procedure, a plaintiff must come forward with “a short and plain statement of the claim showing that the pleader is entitled to relief.” As explicated in Ashcroft v. Iqbal, 556 U.S. 662

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Bluebook (online)
38 F. Supp. 3d 658, 2014 WL 3855023, 2014 U.S. Dist. LEXIS 106825, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sherman-v-john-brown-insurance-agency-pawd-2014.