WENK v. STATE FARM FIRE AND CASUALTY COMPANY

CourtDistrict Court, W.D. Pennsylvania
DecidedSeptember 8, 2023
Docket2:22-cv-00433
StatusUnknown

This text of WENK v. STATE FARM FIRE AND CASUALTY COMPANY (WENK v. STATE FARM FIRE AND CASUALTY COMPANY) 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
WENK v. STATE FARM FIRE AND CASUALTY COMPANY, (W.D. Pa. 2023).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

JEFFREY R. WENK, LEE ANN WENK,

Plaintiffs, 2:22-CV-00433-CCW

v.

STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

OPINION Before the Court are cross-motions for summary judgment filed by Plaintiffs Jeffrey R. Wenk and Lee Ann Wenk (“the Wenks”) and Defendant State Farm Fire and Casualty Company. ECF Nos. 32, 36. For the following reasons, the Court will GRANT IN PART and DENY IN PART both Motions and enter a judgment of nominal damages in favor of the Wenks. I. Background This federal case arises from two underlying cases in Pennsylvania state court regarding damage to the Wenks’ home that occurred when contractors were repairing and replacing exterior siding. ECF No. 45 ¶ 1. State Farm, the Wenks’ home insurer, was involved in both of the underlying actions. In the first state-court action, the Wenks and State Farm, as subrogee, sued the contractors to recover the damages caused during the siding project. Id.; ECF No. 46 at 5. In the second state-court action, the Wenks sued State Farm for bad faith and breach of contract relating to its handling of the Wenks’ homeowners’ insurance claim. ECF No. 45 ¶ 3. The Court will refer to the first state case as the “Contractor Action” and the second as the “Coverage Action.” On August 25, 2017, the Wenks, State Farm, and the contractors entered into a Full and Final Mutual Release and Settlement Agreement (the “Settlement Agreement”), in which the Wenks released their claims in consideration of a settlement payment. ECF No. 46 at 4, 8–9. As relevant here, the settlement contained a confidentiality provision generally prohibiting the parties from disclosing the terms of the settlement. Id. at 14. The provision included a “limited exception” for the Coverage Action, which allowed the parties to disclose the fact of a settlement and also

allowed the parties to disclose the terms of the settlement, but only “pursuant to an order of the court.” Id. at 14–15. The Settlement Agreement also contains language regarding liquidated damages. Specifically, the parties agreed that breaches of the confidentiality provision would “be deemed a material breach for which the breaching party shall be responsible for the payment of liquidated damages.” Id. at 15. Notably, however, the parties did not set an amount of liquidated damages in the executed Settlement Agreement. See id. In an earlier draft, the Wenks’ attorney had proposed $250,000 as the amount of liquidated damages. Id. at 42–43. But in response, attorneys representing the various contractors objected to the inclusion of any amount of liquidated damages. Id. at 43. Counsel for State Farm, in an email, agreed that “setting any dollar value [for the

liquidated damages] would be improper.” Id. at 25. On September 12, 2017, State Farm filed a motion in the Coverage Action requesting a court order that would allow it to disclose the terms of the settlement as part of an argument for a setoff. ECF No. 40 at 54–55. The state court granted the motion and entered an order allowing the terms of the settlement to be filed under seal. ECF No. 45 ¶ 8. When State Farm briefed the issue of a setoff, however, it included Settlement Agreement terms—including the total amount of the payment made to the Wenks—in its public filing. Id. ¶ 9; ECF No. 43 ¶¶ 13–14. The brief remained on the docket for approximately one week. ECF No. 45 ¶ 16. State Farm’s disclosure of settlement terms in the Coverage Action prompted the instant suit. The Wenks allege that State Farm breached the confidentiality provision by (1) disclosing the terms of the Settlement Agreement on the public docket in the Coverage Action (Count I) and (2) moving for permission to disclose the terms of the Settlement Agreement in the Coverage

Action (Count II). ECF No. 1-2¶¶ 24–33. The Wenks seek $250,000 in liquidated damages. Id. at 8. At the close of fact discovery, both parties moved for summary judgment. ECF Nos. 32, 36. Those Motions are now fully briefed and ripe for adjudication. See ECF Nos. 33, 37, 42, 44, 47, 48.1 II. Legal Standard To prevail on a motion for summary judgment, the moving party must establish that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A factual dispute is ‘genuine’ if the ‘evidence is such that a reasonable jury could return a verdict for the nonmoving party.’” Razak v. Uber Techs., Inc., 951 F.3d 137, 144 (3d Cir. 2020) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

“A factual dispute is ‘material’ if it ‘might affect the outcome of the suit under the governing law.’” Id. (quoting Anderson, 477 U.S. at 248). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” NAACP v. N. Hudson Reg’l Fire & Rescue, 665 F.3d 464, 475 (3d Cir. 2011) (quoting Matsushita Elect. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). The burden to establish that there is no genuine dispute as to any material fact “remains with the moving party regardless of which party would have the burden of persuasion at trial.” Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1080 (3d Cir. 1996) (internal quotation marks

1 This Court has jurisdiction of the matter under 28 U.S.C. § 1332 because the parties are diverse and the amount in controversy exceeds $75,000. omitted). Furthermore, “[i]f the non-moving party bears the burden of persuasion at trial, ‘the moving party may meet its burden on summary judgment by showing that the nonmoving party’s evidence is insufficient to carry that burden.’” Kaucher v. Cnty. of Bucks, 455 F.3d 418, 423 (3d Cir. 2006) (quoting Wetzel v. Tucker, 139 F.3d 380, 383 n.2 (3d Cir. 1998)).

Once the moving party has carried its initial burden, the party opposing summary judgment “must do more than simply show that there is some metaphysical doubt as to the material facts. . . . Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita, 475 U.S. at 586–87 (internal quotation marks omitted). Thus, while “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor,” Anderson, 477 U.S. at 255, “Rule 56(e) . . . requires the nonmoving party to go beyond the pleadings” and point to “specific facts showing that there is a genuine issue for trial,” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (internal quotation marks omitted). But, while the court must “view the facts in the light most favorable to the non- moving party and draw all reasonable inferences in that party’s favor . . . . to prevail on a motion

for summary judgment, the non-moving party must present more than a mere scintilla of evidence.” Burton v. Teleflex Inc., 707 F.3d 417, 425 (3d Cir.

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WENK v. STATE FARM FIRE AND CASUALTY COMPANY, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wenk-v-state-farm-fire-and-casualty-company-pawd-2023.