Date: 05-03-2023

Case Style:

Rebecca Nelson v. State Farm Fire & Casualty

Case Number: 2:19-cv-1382

Judge: Robert J. Colville

Court: United States District Court for the Western District of Pennslvania (Allegheny County)

Plaintiff's Attorney:

Defendant's Attorney: Mark A. Martini and Kevin

Description: Pittsburgh, Pennsylvania insurance Law lawyers represented Plaintiff who sued Defendant on a bad faith breach of contract theory.


Plaintiff currently resides, and at all relevant times resided, at 186 Chartiers Avenue, Pittsburgh, PA 15205 (the “Property”). Resp. to Concise Statement (“Resp.”) ¶ 1, ECF No. 65. At all relevant times, Plaintiff maintained a policy of homeowners insurance that had been issued to her by State Farm at Policy No. 38CVN4033 (the “Policy”), which provided coverage for accidental and direct physical loss to the Property, subject to the Policy's terms, limitations, conditions, and exclusions. Id. at ¶ 3. With respect to “Losses Insured,” the Policy provides:

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COVERAGE A - DWELLING

We insure for accidental direct physical loss to the property described in Coverage A, except as provided in SECTION I - LOSSES NOT INSURED.

ECF No. 57-1 at 17. With respect to “Losses Not Insured,” the Policy provides:

SECTION I - LOSSES NOT INSURED

1. We do not insure for any loss to the property described in Coverage A which consists of, or is directly and immediately caused by, one or more of the perils listed in items a. through n. below, regardless of whether the loss occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:

....

g. wear, tear, marring, scratching, deterioration, inherent vice, latent defect or mechanical breakdown;

....

i. wet or dry rot;

....

However, we do insure for any resulting loss from items a. through m. unless the resulting loss is itself a Loss Not Insured by this Section.

....

2. We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events. We do not insure[] for such loss regardless of: (a) the cause of the excluded event; or (b) other causes of the loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss; or (d) whether the event occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:

....

d. Neglect, meaning neglect of the insured to use all reasonable means to save and preserve property at and after the time of a loss, or when property is endangered.

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....

g. Fungus. We also do not cover:

(1) any loss of use or delay in rebuilding, repairing or replacing covered property, including any associated cost or expense, due to interference at the residence premises or location of the rebuilding, repair or replacement, by fungus;

(2) any remediation of fungus, including the cost to:

(a) remove the fungus from covered property or to repair, restore or replace that property; or

(b) tear out and replace any part of the building or other property as needed to gain access to the fungus; or

(3) the cost of any testing or monitoring of air or property to confirm the type, absence, presence or level of fungus, whether performed prior to, during or after removal, repair, restoration or replacement of covered property.

....

3. We do not insure under any coverage for any loss consisting of one or more of the items below. Further, we do not insure for loss described in paragraphs 1. And 2. immediately above regardless of whether one or more of the following: (a) directly or indirectly cause, contribute to or aggravate the loss; or (b) occur before, at the same time, or after the loss or any other cause of the loss:

....

b. defect, weakness, inadequacy, fault or unsoundness in:

....

(2) design, specifications, workmanship, construction, grading, compaction;

(3) material used in construction or repair; or

(4) maintenance;

of any property (including land, structures, or improvements of any kind) whether on or off the residence premises[.]

....

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However, we do insure for any resulting loss from items a., b. and c. unless the resulting loss is itself a Loss Not Insured by this Section.

Resp. ¶ 5, ECF No. 65; ECF No. 57-1 at 19-21. The Policy also provides: “Suit Against Us. No action shall be brought unless there has been compliance with the policy provisions. The action must be started within one year after the date of loss or damage.” Id. at ¶ 6.

On April 3, 2018, Plaintiff noticed damage to her kitchen wall and contacted her father to ask him for a contractor referral. Resp. ¶ 9, ECF No. 65. Despite this request, Plaintiff did not repair the damage to her kitchen wall in April of 2018. Id. at ¶ 10. Plaintiff contacted a contractor about having the damage repaired again in September, October, and November of 2018, but did not repair the damage during these months. Id. at ¶¶ 11-12. In November of 2018, Plaintiff noticed additional damage to her kitchen wall. Id. at ¶ 13. In December of 2018, Plaintiff hired a contractor, Scopewell, to install a tarp on her roof. Id. at ¶ 14. The parties dispute whether Plaintiff had informed State Farm of the damage to the Property prior to the installation of the tarp. Id. Scopewell told Plaintiff that a gutter had pulled away from her roof above the guest room window, resulting in water channeling into the flashing around both windows, which in turn saturated the drywall from the inside out. Id. at ¶ 15.[1] Plaintiff did not personally convey Scopewell's statement to State Farm. Id. at ¶ 16.

On December 17, 2018, Plaintiff retained a public adjuster, Brian Pfister, to communicate with State Farm on her behalf regarding the loss. Resp. ¶ 17, ECF No. 65. Plaintiff did not directly communicate with State Far about the loss, and all communications were conveyed by Mr. Pfister to State Farm. Id. at ¶ 18. As a result of the loss, Plaintiff required water remediation, including the removal of any rotting and deteriorated drywall. Id. at ¶¶ 19-20. State Farm was first notified

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of Plaintiff's loss by Mr. Pfister on December 20, 2018. Id. at ¶¶ 21-22. At that time, Plaintiff had not chosen a company to perform the required remediation. Id. at ¶ 26.

On December 21, 2018, Plaintiff retained water remediation company, ServiceMaster Restore by All Pro (“ServiceMaster”), who inspected the Property and loss at issue that day. Resp. ¶¶ 28-29, ECF No. 65. On December 22, 2018, ServiceMaster, who had concluded that a mechanical failure or defect in the overhang of the roof of the Property caused the loss, provided Plaintiff with an estimate of $8,883.66 for the water remediation, and Plaintiff subsequently authorized ServiceMaster to perform the water remediation. Id. at ¶¶ 30-33. During its work on the Property, ServiceMaster located areas of drywall around the kitchen window that had eroded severally to the point that these areas had no remaining structural integrity. Id. at ¶ 35. ServiceMaster found mold and deterioration throughout the affected areas of the kitchen, and also found mold in Plaintiff's upstairs bedroom. Id. at ¶¶ 36-37. Plaintiff does not dispute ServiceMaster's findings, and Plaintiff herself observed mold on or near the wooden supports that were visible following the removal of the damaged drywall. Id. at ¶¶ 38-39. Mr. Pfister spoke with a representative of State Farm on December 27, 2018 and advised the representative that he had been informed by Alex Barraza of State Farm on December 20, 2018 that State Farm would pay for the water remediation work. Id. at ¶¶ 40-43. State Farm asserts that there is no indication in the initial Loss Report or the earlier File History notes that indicate water remediation work had been approved or that State Farm had promised to pay for same, and Plaintiff disputes this assertion. Id. at ¶ 44.

On either December 27, 2018 or January 2, 2019, State Farm employee Chad Moore was assigned Plaintiff's claim and was further assigned to inspect the Property. Resp. ¶ 45, ECF No. 65. ServiceMaster completed its water remediation work on January 7, 2019. Id. at ¶ 46. With

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Mr. Pfister present, Mr. Moore inspected the Property on January 9, 2019. Id. at ¶ 47. State Farm avers that, during Mr. Moore's inspection, he made the following observations: (1) that water appeared to have entered into the rear exterior wall of the Property from the roof or upper elevation, allowing water to seep down through the framing; (2) that the water infiltration had caused deterioration and rot to the third-floor bedroom wall and the second-floor kitchen wall and subfloor; and (3) that a tarp had been installed on Plaintiff's roof. Id. at ¶¶ 48-50.[2] The parties do not agree as to whether Mr. Pfister and Mr. Moore, at the time of Mr. Moore's inspection, knew of the source of the water infiltration and the basis for the tarp's placement on Plaintiff's roof. Id. at ¶¶ 51-52. The parties also do not agree as to whether Mr. Pfister had already provided information to State Farm on December 20, 2018 regarding the source of the water infiltration and the basis for the tarp installation, or whether Mr. Pfister agreed to provide further information to Mr. Moore regarding these issues following Mr. Moore's inspection, with Plaintiff asserting the former and State Farm the latter. Id.

On January 19, 2019, State Farm sent a status update letter to Plaintiff which: (1) advised Plaintiff that State Farm had identified a date of loss of April 3, 2018 with respect to Plaintiff's claim; (2) quoted the suit limitation provision of the Policy (providing that a lawsuit must be commenced within one year of the date of loss or damage); and (3) informed Plaintiff that her claim remained pending due to the coverage investigation and that “[State Farm] need[ed] any information regarding the source of water and the reason for the tarp on the roof.” Resp. ¶¶ 5355, ECF No. 65. The parties vehemently dispute the “date of loss” at issue, with Plaintiff asserting that the same was a date in December of 2018, mostly based upon her knowledge and belief of the

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extent of the damage at issue prior to that date, and State Farm asserting that the date of loss was April 3, 2018, the date Plaintiff noticed damage to her kitchen wall and contacted her father to ask for a contractor referral. Id. Plaintiff has also advanced argument that, “even if the date of loss were [determined] to be April 3, 2018, . . . Defendant's own conduct precludes it enforcing the same.” Id. at ¶ 76.

On January 29, 2019, Mr. Pfister informed State Farm that Scopewell was the contractor that had installed the tarp on Plaintiff's roof. Resp. ¶ 59, ECF No. 65. On February 1, 2019 and February 12, 2019, Mr. Moore attempted to contact Scopewell via telephone to discuss the roof tarping and whether Scopewell had completed an inspection of the Property's roof, but did not receive an answer and instead left voicemails requesting a callback. Id. at ¶¶ 60-61. Scopewell returned Mr. Moore's calls on February 27, 2019, and indicated that it had not performed a roof inspection, but had rather simply installed the tarp. Id. at ¶ 62. That same day, State Farm Team Manager David Konefal-Shaer extended authority to engage a roofer to inspect the roof. Id. at ¶ 63. On February 28, 2019, Mr. Moore contacted Mr. Pfister to advise that an inspection of the roof would be performed by Insurance Restoration Consultants (“IRC”), but Mr. Pfister refused to allow IRC on the property. Id. at ¶¶ 64-65. Accordingly, Mr. Moore contacted Restoration Management Services (“RMS”) to conduct an inspection of the roof. Id. at ¶ 66. On March 1, 2019, State Farm sent another status update letter to Plaintiff again identifying a date of loss of April 3, 2018 with respect to Plaintiff's claim and quoting the suit limitation provision of the Policy. Id. at ¶¶ 67-69.

Jathan D'Antonio of RMS conducted an inspection of the Property on March 11, 20219, with Mr. Pfister present. Resp. ¶ 69, ECF No. 65. Mr. D'Antonio, presumably in a report sent to State Farm via email on March 15, 2019, see id., concluded that “the drip edge on the roof without

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an overhand was not in the gutter, but was on the rear elevation of the structure above the affected areas of the home, and that water was able to run off the drip edge, down the rear elevation, and penetrate onto the sheathing on the rear elevation,”[3] and opined that “over time this water intrusion has caused damage to the interior and exterior of the home[,]” id. at ¶¶ 70-71.[4] On March 29, 2019, Mr. Moore sent a copy of Mr. D'Antonio's inspection report to Mr. Pfister in addition to a letter outlining State Farm's determination that the loss was not covered by the Policy and denying Plaintiff's claim. Id. at ¶ 73. On April 11, 2019, Mr. Moore closed Plaintiff's claim after receiving no further communications from Mr. Pfister. Id. at ¶ 74.

On April 16, 2019, State Farm received a letter of representation and demand from Plaintiff's counsel, noting that “it is my intention to commence litigation within ten (10) days if State Farm does not provide coverage for this loss.” Resp. ¶ 75, ECF No. 65. On May 15, 2019, State Farm sent a letter to Plaintiff's counsel indicating that State Farm stood by its denial of coverage conveyed in its March 29, 2019 letter, but offering to pay the costs of ServiceMaster's water remediation work ($8,883.66) as a compromise.[5] Id. at ¶¶ 77-78. Plaintiff rejected State Farm's May 15, 2019 offer, and initiated this action via a Praecipe for Writ of Summons on May 22, 2019. Id. at ¶¶ 79-80. Other than ServiceMaster's water remediation work and Scopewell's installation of the tarp, Plaintiff has not obtained any estimates for the repair of the Property to its pre-loss condition. Id. at ¶ 81; see also Pl.'s Ex. 2 at 93-94. Due to State Farm's denial of coverage, Mr. Pfister never prepared an estimate for the repair of the Property. Id. at ¶ 82.

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On June 3, 2020, this Court issued a Memorandum Opinion (ECF No. 13) and Order (ECF No. 14) granting in part and denying in part the Motion to Dismiss (ECF No. 6) filed by State Farm. Following this decision, the following claims remain at issue in this matter: (1) Count I, breach of contract; (2) Count II, statutory bad faith; (3) Count IV, negligent misrepresentation; and (4) Count V, violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”).

State Farm filed its Motion for Summary Judgment, along with a Brief in Support (ECF No. 55), a Concise Statement of Material Facts (ECF No. 56), and an Appendix of Exhibits (ECF No. 57), on October 11, 2021. On November 23, 2022, Plaintiff filed a Brief in Opposition (ECF No. 66), a Response to State Farm's Concise Statement (ECF No. 65), and an Appendix of Exhibits (ECF No. 64). State Farm filed a Reply (ECF No. 68) and a Supplemental Appendix of Exhibits (ECF No. 69) on December 7, 2022, and Plaintiff filed a Surreply (ECF No. 73) on December 20, 2021. Plaintiff filed a Motion (ECF No. 74) setting forth additional legal authority on February 8, 2023 and requesting the Court consider the same in ruling on State Farm's Motion for Summary Judgment, and State Farm filed a response (ECF No. 75) to the same on February 14, 2023. Because the Court considered the legal authority raised in Plaintiff's Motion, the Motion at ECF No. 74 will be granted.
Nelson v. State Farm Fire & Cas. Co. (W.D. Pa. 2023)

Outcome: Motion for summary judgment granted.

Plaintiff's Experts:

Defendant's Experts:

Comments: