Court Denies Carrier's Motion For Summary Judgment on Residency Issue in Fire Loss Coverage Claim

In the case of Jackson v. Spinnaker Ins. Co., No. 2:22-CV-012244-NBF (W.D. Pa. Jan. 28, 2025 Fischer, J.), the court addressed a Motion for Summary Judgment filed by the defendant insurance carrier against claim for breach of contract and bad faith asserted by the Plaintiff relative to an homeowner’s policy and a fire loss. The court granted the defense motion as to the Plaintiff’s claim of bad faith but otherwise denied the motion.

The central question in this case was whether the Defendant insurance company had wrongfully refused to pay coverage for losses sustained by the Plaintiff’s after the Plaintiff's property was damaged in a fire.

The Defendant carrier had denied coverage on the grounds that the property was not the Plaintiff’s “residence,” and that the policy was void due to the Plaintiff’s material misrepresentation during the defense investigation. 

More specifically, the carrier asserted that the carrier falsely represented that the property was his primary residence and that it was not vacant and unoccupied. The Defendant carrier noted that the property lacked any electricity of sewer service.

The court denied the Motion for Summary Judgment on the breach of contract claims after finding, in part, that the policy in question did not restrict coverage to the Plaintiff’s primary residence. Rather, the court found that the policy expressly insured the identified property.

The court held that there was an issue of material fact as to whether or not the property was the Plaintiff’s residence. The Plaintiff had noted that he was sporadically sleeping at the property while completing renovations.

The court also found that the Defendant carrier had failed to establish that the Plaintiff made any statements regarding his residence at the property with knowledge of their alleged falsity or under an alleged deliberate intent to deceive.

The court otherwise denied the Defendant carrier’s Motion for Summary Judgment on the bad faith claim after finding that the Defendant had a reasonable basis for denying coverage.

Anyone wishing to review a copy of this decision may click this LINK.


Source: The Legal Intelligencer Federal Case Alert, www.Law.com (Feb. 20, 2025).

Source of image:  Photo by Andrew Gaines on www.unsplash.com.

Pennsylvania Supreme Court Upholds Homeowner's Insurance Carrier's Denial of Coverage in a Drug Overdose Case

In the case of Kramer v. Nationwide Insurance, No. 103 MAP 2022 (Pa. April 25, 2024) (Op. by Donohue, J., Dougherty, J., Concurring, Mundy, J., Concurring), the court addressed the scope of a controlled substance abuse exclusion found in a homeowner’s policy.

According to the Opinion, the dispute between the insureds and the homeowner’s carrier arose after a fatal drug overdose of the Plaintiff's decedent within the insured Defendant's home. The family of the decedent sued the homeowners and their son for wrongful death and survival action claims.

The homeowners sought coverage under their insurance policy with Nationwide.  Nationwide denied coverage based upon a controlled substance exclusion in the policy. The homeowners then filed this declaratory judgment action.

The Pennsylvania Supreme Court held that the finding of the Superior Court that the carrier was potentially required to pay out for emotional and mental distress damages was contrary to the unambiguous provisions of the policy and erroneous as a matter of law.

The Pennsylvania Supreme Court concluded that Nationwide had no duty to defend the underlying lawsuit because emotional and mental distress damages in the wrongful death claims were not "bodily injuries" as that term was considered under the policy language at issue.

Anyone wishing to review a copy of this decision may click this LINK.  Justice Dougherty's Concurring Opinion can be viewed HERE.  Justice Mundy's Concurring Opinion can be viewed HERE.

Source of image:  Photo by Tierra Mallorca on www.unsplash.com.

Homeowner's Insurance Bad Faith Claim Dismissed

In the case of Qin v. Travelers Personal Ins. Co., No. 2:22-CV-03264-KNS (E.D. Pa. Dec. 15, 2023 Scott, J.), the court granted a Defendant carrier’s Motion to Dismiss a Plaintiff’s bad faith claim based upon the homeowner insurance carrier Defendant’s refusal to cover a loss because the property in question had been vacant for more than sixty (60) days prior to the date of the loss.

The court found that the Complaint lacked factual allegations to support the bad faith claim.

This case involved issues arising under a homeowner’s insurance policy.  The Plaintiff alleged that tenants had damaged a property that he owned.

The court found that the Plaintiff did not allege any facts to support a claim of bad faith and only made conclusory allegations. The court otherwise held that the allegations in the Complaint failed to satisfy the two prongs necessary to establish a bad faith claim, that being that the Defendant allegedly lacked a reasonable basis for denying benefits under the policy and that the carrier knew or recklessly disregarded its lack of a reasonable basis in denying the claim.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Jan. 5, 2024).

Source of image:  Photo by Tierra Mallorca on www.unsplash.com.

Court Applies Criminal Acts Exclusion in Homeowner's Policy to Deny Coverage to Insured After an Altercation

In the case of Safeco Ins. Co. of Illinois v. Gasiorowski, No. 2:20-CV-03877-GAM (E.D. Pa. July 5, 2022 McHugh, J.), the court granted a homeowners insurance carrier’s Motion for Summary Judgment in this action in which the carrier sought a judicial declaration that it had no duty to defend or indemnify a Defendant in a personal injury action.

According to the Opinion, the underlying claim arose from a physical altercation with the Plaintiff that led to a criminal assault charge against the insured Defendant. The Defendant pled nolo contendere to the criminal charges.

The court found that the criminal acts exclusion in the policy barred coverage.

The court noted that, although a plea of nolo contendere to the criminal charges was not conclusive in this context, the court also found that a video of the incident showed that no reasonable juror could have found that the Defendant’s actions in assaulting the Plaintiff were justified or were in self-defense as alleged by the Defendant.

As such, the Motion for Summary Judgment was granted in favor of the carrier on the denial of coverage.

Anyone wishing to review a copy of this decision may click this LINK


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (July 28, 2022).

Source of Image:  Photo by Kindel Media on www.pexels.com.

With Regards to An Insurance Policy's Definition of 'Residency,' Court Rules That An Insured May Have More Than One Residence

In the case of Isenberg v. State Farm Fire & Cas. Co., No. 21-CV-1147 (W.D. Pa. May 27, 2022 Schwab, J.) (Mem. Op.), the court addressed issues of insurance coverage in the context of a house fire.

In this case, the carrier asserted that it was entitled to summary judgment because the Plaintiff was not using the house as a residence at the time of the fire.

According to the facts of the case, the Plaintiff had purchased the house in 2018, and continued to live in her apartment during the renovations at the house, which renovations turned out to the more extensive than anticipated. Then, in 2020, a fire destroyed the home. The Plaintiff filed a claim under her homeowner’s policy.

The carrier rescinded the policy, alleging that the Plaintiff was not using the house as a residence.

The Plaintiff filed suit in state court and the carrier removed the case to federal court. After discovery was completed, the Defendant carrier moved for summary judgment.

As noted, the carrier asserted that was not using the property as a residence at the time of the fire. The insurance company additionally argued that a person could only have one “residence.”

The court ruled in favor of the Plaintiff.  In part, the court found that Pennsylvania courts and federal courts applying Pennsylvania law had agreed that a person was not limited to only being able to have one residence.

Rather, the case law suggested that residency was a question of physical fact and not the policyholder’s intention.

In this case, the record before the court revealed that the Plaintiff was physically present at house on an almost daily basis. There was also evidence that she had meals there, slept at the house on occasion, and had personal belongings in the house during the course of the renovations.

As such, the carrier’s Motion for Summary Judgment was denied.

Anyone wishing to review a copy of this decision may click this LINK.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (June 14, 2022).

Source of image:  Photo by Jeffrey Czum on www.pexels.com

Trial Court Addresses Issues Regarding Denial of Coverage Under Homeowner's Policy

In the case of Watkins v. State Farm Fire and Casualty Co., No. 10363 of 2020-CA (C.P. Lawr. Co. April 19, 2022 Motto, P.J.), the court granted a Defendant carrier’s Preliminary Objections to a Plaintiff’s claim for negligence and breach of fiduciary duty relative to the sale of a homeowner’s insurance policy that ended up not providing the Plaintiff with coverage for a fire loss.

In its decision, the court found that the Plaintiff’s claim for negligence against his insurance company was barred by the gist of the action doctrine.

The court additionally found that the Plaintiff’s Complaint did not allege sufficient facts to allow the Plaintiff to move forward on a breach of fiduciary duty claim against the carrier in connection with the sale of the insurance policy. The court noted that, by asserting the right to handle all claims against the insured, the insurance company assumed a fiduciary duty and was obligated to act in good faith and with due care towards its insured. However, the court noted that the courts in Pennsylvania did not impose a fiduciary duty upon an insurance company merely for selling a policy of insurance to an insured.

The court found that the Plaintiff’s Complaint did not allege any facts to show that the Defendant insurance company or its agents applied any undue influence over the Plaintiff. As such, the court found no basis to support an allegation of an existence of a fiduciary duty under the facts alleged. As such, the Defendant’s Preliminary Objections were sustained in these respects and the Defendant was ordered to file an answer to the remainder of the Plaintiff’s Complaint.

Anyone wishing to review a copy of this decision may click this LINK.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (May 31, 2022).

Insured Loses Fight for Coverage for a Fight

In the case of State Farm Fire and Cas. Co. v. Simone, No. 2:20-CV-00908-RJC (W.D.P. Jan. 28,2021 Colville, J.) County Court addressed a Motion for Judgment on the Pleadings filed by the liability insurance company seeking a declaratory judgment that the carrier did not have a duty to defend or indemnify the defendant with respect to allegations set forth in an underlying complaint arising out of an altercation during which the insured punched the injured party after they bumped into one another on a walkway at a crowded concert. 

After comparing the allegations in the Plaintiff’s complaint against the terms of the policy in question, the court ruled that the allegations in the complaint described a willful physical assault and an intentional tort for which there was no coverage under the policy. 

As such, the carrier’s motion for judgment on the pleadings was granted.

Anyone wishing to review this decision may click this LINK.

Dispute Under Homeowner's Policy Allowed to Proceed to Jury

 

In the case of Bloxham v. Allstate Ins. Co., No. 3:19-CV-00481 (M.D. Pa. Nov. 16, 2020, Mehalchick, M.J.), Federal Magistrate District Court Judgment, Karoline Mehalchick, denied the carrier’s Motion for Summary Judgment in a breach of contract action arising out of a dispute under a homeowner’s insurance policy. 

According to the Opinion, after the Plaintiff sustained an accidental fire loss to his home and personal property, the carrier denied payment under the insurance policy on the grounds that the Plaintiff did not reside at the subject property and that the Plaintiff and/or the Plaintiff’s representatives allegedly provided material misrepresentations to the Defendant-carrier about residency. 

In opposition, the Plaintiff asserted that he did reside at the subject property and that no material misrepresentations were made as to the residency, ownership, or as to the condition of the property. 

Federal Magistrate Judge Mehalchick provided a thorough analysis of Pennsylvania case law on the definition of “residence” and concluded that the evidence presented in this case was sufficient to allow a reasonable jury to conclude that the Plaintiff did reside at the property at the time of the fire. As such, the carrier’s motion for summary judgment was denied in this regard. 

The court also reviewed the elements of a claim of misrepresentation relative to an insurance policy. After reviewing the same, the court found that the carrier failed to establish that the parties at issue had  knowingly made any false statements with regards to residency. It was also noted that the carrier failed to show that any such statements were made with a deliberate intent to deceive the carrier.

Also, given that the question as to whether the insured resided at the property was left for the jury’s determination, the court found that the carrier could not establish, at this stage of the litigation, whether any alleged misrepresentation about the insured’s residency was false. 

As such, summary judgment was also denied on the issue of allegations of material misrepresentations with regards to the policy. 

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman Krekstein & Harris and writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog for bringing this case to my attention. 

Limitation of Actions Provision in Homeowner's Policy Upheld

In the case of Palek v. State Farm Fire and Cas. Ins. Co., No. 2:20-CV-170-JFC (W.D. Pa. Aug. 26, 2020 Conti, J.), the court granted the carrier’s Motion to Dismiss for failure to state a claim with regards to a breach of contract claim and a bad faith claim relative to the handling of a homeowner's insurance claim. 

The granting of the dismissal relative to the breach of contract claim was with prejudice but the granting of the dismissal with respect to the bad faith claim was without prejudice. The Plaintiff was granted twenty (20) days to file an Amended Complaint. 

As noted, this matter arose out of claims under a homeowner’s policy. According to the Opinion, the State Farm policy provided coverage for accidental and direct physical loss to, among other things, the in-ground swimming pool on the Plaintiff’s property. 

According to the Opinion, the Plaintiffs had emptied their swimming pool of water in order to perform routine maintenance. In doing so, they noticed damage to the swimming pool’s liner. They presented a claim for State Farm who eventually determined that the damage was not covered under the policy. The carrier asserted that the damage was caused by earth movement and, therefore, was excluded under the policy. 

The Plaintiffs filed a claim for breach of contract of the policy and a bad faith denial of benefits without a reasonable basis to do so. 

With regard to the breach of contract claim, the court agreed with State Farm that the Plaintiff’s claims were barred by the 1-year suit limitation provision contained in the policy. The court upheld this provision and found no evidence to support a finding of waiver or estoppel as raised by the Plaintiff.

The court additionally found that, even if the suit limitation provision did not apply, the alleged damages would be excluded under an application of the policy language. 

Relative to the bad faith claim, the court confirmed that a claim for bad faith is an independent cause of action separate from a contract claim. The court noted that the Plaintiff could proceed on the bad faith claim even where a contractual limitation period has been enforced and a breach of contract claim has been dismissed. Given that the Plaintiff had claims with respect to how the claim was handled, the court allowed the Plaintiff to provide more details in support of an alleged bad faith claim. 

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Mark A. Martini of the Pittsburgh office of the law firm of Robb Leonard Mulvihill, LLP for brining this case to my attention.

Superior Court Addresses Validity of UTPCPL Claims

In the case of Wenk v. State Farm Fire & Casualty Ins. Co., No. 2020 Pa. Super. 26(Pa. Super. Feb. 7, 2020) (Shogan, J., Lazarus, J., and Olson, J). (Op. by Shogan, J.), the court affirmed in part and vacated in part a trial court’s decisions in a bad faith and Unfair Trade Practices and Consumer Protection Law (UTPCPL) claims against a contractor.

According to the Opinion, the case arose out of a Plaintiff’s lawsuit against a carrier and a contractor over repairs to the Plaintiff’s house. The Plaintiff alleged that another contractor poured gasoline into the framework of their house to destroy a bee’s nest.   The house was damaged as a result and the Plaintiff submitted a claim to his carrier.

The Plaintiff then agreed to let another contractor, who was approved by the carrier, to perform remedial work.

The Plaintiff alleged that there were issues with the remedial work. The Plaintiff sued the carrier and the contractor for breach of contract, breach of warranty, and violations of the UTPCPL.

On appeal, the appellate court agreed with the trial court that the Plaintiff’s bad faith and Unfair Trade Practices and Consumer Protection Law claims against the carrier had to be dismissed.

The appellate court also found that the trial court properly exercised its discretion with respect to the damages awarded in the UTPCPL claims against the contractor. However, the appellate court found that the trial court erred in dismissing the carrier’s and the contractor’s claims for a setoff.

The court noted that a setoff should have been allowed to the extent that the Plaintiff’s settlement with the other contractor covered any damages that the Plaintiff sought in this case including compensation for damages to the home and personal property so as to prevent any duplication of recovery.

Anyone wishing to review a copy of this case may click this LINK.

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Feb. 25, 2020).

Court Rules No Breach and No Bad Faith Where Exclusion Precluded Coverage

In the case of Tarttour v. Safeco Ins. Co., No. 17-1896 (E.D. Pa. Jan. 28, 2020 DuBois, J.), the court granted the carrier’s Motion for Summary Judgment in a breach of contract and bad faith claim after finding that coverage did not apply under the case presented. 

By way of background, Defendant Safeco, provided a homeowner’s insurance policy to its insured. The insured lived in the home covered by the policy with his two (2) children. The insured became ill and went to the hospital where he had to be put on life support. 

When a decision was made by the insured’s wife and one of his children to remove the insured from life support, the insured’s other adult child did not agree with the decision and began to threaten suicide. As part of that process, that adult son set his room on fire in an effort to commit suicide but then changed his mind and survived. 

A fire loss claim was submitted to the carrier for coverage. The carrier denied coverage asserting that the accidental loss provision in the policy did not apply and/or that coverage was excluded under the intentional loss exclusion. 

After reviewing the facts of the case before it and noting that coverage disputes were initially to be decided by the court, the court ruled that the facts presented did not fall under the accidental loss provision of the policy and/or that the facts implicated the intentional loss exclusion. As such, the breach of contract claim was dismissed.

The court also dismissed the companion bad faith claim after finding that the undisputed evidence demonstrated that the carrier has a reasonable basis for denying the Plaintiff’s claim for coverage.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein & Harris, as well as the writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog, for bringing this decision to my attention.

Court Rules That Artful Pleading Cannot Defeat Exclusions Applicable Under Homeowner's Policy

In the case of Carrasquillo v. Kelly and Nationwide Mut. Fire Ins. Co., No. 2720 EDA 2018 (Pa. Super. Nov. 12, 2019 Panella, P.J., Kunselman, J., and Stevens, J.E.) (Op. by Kunselman, J.)(Non-precedential decision), the court addressed issues pertaining to a declaratory judgment action under a homeowner’s policy.

According to the Opinion, the Nationwide insured fatally shot and killed the Plaintiff’s decedent in the insured’s home. The insured later pled guilty to a charge of murder in the third degree. Thereafter, the decedent’s family pursued a wrongful death and survival action.

In response, Nationwide, the carrier who provided homeowner’s coverage on the home where the incident occurred, denied coverage under the intentional acts exclusion and the criminal acts exclusion. A declaratory judgment action was filed to address these issues.

In this declaratory judgment action, the Plaintiff attempted to argue that it had pled negligence allegations in the underlying Complaint such that the exclusions were not applicable. The court disagreed and noted that artful pleading did not serve to avoid the exclusions in this matter.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Benjamin P. Novak of the Lancaster, PA law firm of Fowler, Hirtzel, McNulty & Spaulding for bringing this case to my attention.

Nonsuit in Declaratory Judgment Action on Coverage Affirmed Based On Definition of "Occurrence"

In the case of Kiely v. Phila. Contrib. Ins. Co., 2019 Pa. Super. 90 (Pa. Super. March 26, 2019 Ott, J., Dubow, J. Stevens, P.J.E.)(Op. by Dubow, J.), the Pennsylvania Superior Court affirmed a trial court’s entry of compulsory non-suit in favor of the carrier on a coverage question arising out of a homeowner’s policy and/or an umbrella policy. 

According to the Opinion, an insured who was covered a homeowner’s policy and an umbrella policy issued by the same carrier was sued in an underlying litigation by a former domestic employee, who asserted claims of assault and intentional infliction of emotional distress.   The insured had tendered the lawsuit to the carrier for a defense. The carrier denied coverage, asserting that the intentional torts alleged in the underlying Complaint were not “occurrences.” 

The insured then commenced this coverage litigation against the carrier seeking a declaration that the carrier was obligated to defend and indemnify the insured on the claims presented.  The insured also sought damages for bad faith.  

The coverage litigation proceeded to a trial.  At trial, the trial court permitted the insured to introduce evidence that evidence that he (the insured) lacked the mental capacity sufficient to intentionally assault the Plaintiff in the underlying matter.

The trial court entered a nonsuit in favor of the carrier after finding that the insured failed to introduce evidence of an “accident” which was required in order to trigger coverage under the policy for an “occurrence.”  

On appeal, the Superior Court affirmed the trial court’s entry of a compulsory nonsuit.   The court held that the insured’s alleged assault upon the underlying Plaintiff was not an “accident; rather, it was an intentional tort.”   Accordingly, given that the policy defined an “occurrence” as an “accident,” and given that the no accident or occurrence was alleged in the underlying personal injury Complaint, the Superior Court agreed that the carrier did not owe any duty to defend or indemnify under the policy.  

In addition to upholding the trial court’s entry of a compulsory nonsuit, the Superior Court additionally held that it was improper for the trial court to have permitted the insured to introduce evidence that the insured lacked the mental capacity to commit intentional torts.

The Superior Court noted that in a declaratory judgment action concerning insurance coverage issues, the allegations in the underlying personal injury Complaint control the analysis and that extrinsic evidence could not be admitted while the underlying lawsuit was still pending.  Simply put, in a coverage action, the essential analysis required involved comparing the allegations of the underlying Complaint to the insurance policy to determine if the coverage provisions were triggered.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Benjamin P. Novak, Esquire of the Lancaster, Pennsylvania office of Fowler, Hirtzel, McNulty & Spaulding, LLP, for bringing this case to my attention.

Court Finds that Homeowner's Carrier Required to Defend Insureds Against Claims that Insured Caused Another's Suicide by Cyber-Bullying

In what may be a case of first impression, in State Farm Fire and Cas. Co. v. Motta, No. 18-3956 (E.D. Pa. Dec. 11, 2018 Kearney, J.), Judge Mark A. Kearney of the Federal Eastern District Court of Pennsylvania held that a homeowner’s policy was required to defend a case on behalf of a Defendant-homeowner whose son allegedly bullied another high school student with text messages, allegedly causing that other student to commit suicide as a result.  

After the parents of the deceased student sued the harasser and his parents for negligence, the defendants turned to their carrier for liability coverage under their homeowner's policy.  The policy provided coverage for any "occurrence" which was defined in the policy as an "accident."

In this declaratory judgment action on coverage, the carrier argued that, because the harasser sent a text message to the victim, there was no "accident" as to his actions.

In response, the insured defendants argued that Pennsylvania law requires, in the analysis of whether an "accident" occurred in the context of the policy, that the question of foreseeability be viewed from the insured's perspective.  In this regard, the insured defendants asserted that, although it cannot be disputed that the insured sent the text message, the victim's suicide thereafter constituted an extraordinary intervening event far beyond anything contemplated under the circumstances and was therefore unforeseeable to the insured and, in the end, fell within the definition of an "accident."

The court noted that "[t]he parties have not cited, and we cannot find, Pennsylvania law addressing whether the [insured'] alleged negligence possibly leading to this ever more prevalent tragedy among our students is an occurrence mandating coverage."

Ultimately, after analyzing the facts before it, the court held that the homeowner's insurance carrier was indeed required to provide a defense and possible indemnity on negligence claims presented in this unfortunate case.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.

Homeowner's Insurance Carrier's Duty To Defend Addressed in Assault Case

In the case of Homesite Ins. Co. v. Neary, No. 17-2297 (E.D. Pa. Sept. 17, 2018 Bartle, J.), the court addressed a homeowner’s insurance company’s duty to defend in a matter involving a physical assault.  

According to the Opinion, two (2) roommates sharing a rented apartment got into a physical altercation, first at an off-premises party and then again at the rented apartment.  

After the Plaintiff sustained a traumatic brain injury as a result of the attack, a lawsuit was filed against the other roommate, alleging claims of negligence, recklessness, and other claims.  

The carrier had issued a homeowner’s policy to the attacker’s parents.  The homeowner’s insurance company filed this declaratory judgment action seeking a judicial declaration that it had no duty to defend the attacker.   The issue came before the court by way of a Motion for Summary Judgment. 

According to the Opinion, the homeowner’s insurance carrier’s limited coverage to injury or damage caused by an “occurrence,” which was defined as an accident.   The term “accident” was not defined in the policy.

Accordingly, the court construed that word according to its natural, plain, and ordinary sense to mean “an unexpected and undesirable event occurring unintentionally.”  The court noted that the key phrase in the definition of an “accident” is the word “unexpected” which the court found to be imply a degree of fortuity.  

Although the Plaintiff’s Complaint contained allegations of negligence, the court noted that the Plaintiff’s characterization of the claims is not controlling on the coverage question issues.   Rather, the court was required to look at the factual allegations.   In the end, the court found that the Plaintiff’s attempts to characterize the causes of action as claims sounding a negligence was insufficient to trigger the carrier’s duty to defend.   Accordingly, the carrier’s Motion for Summary Judgment was granted.

Anyone wishing to review a copy of this decision may click this LINK.

Source: “Digest of Recent Opinions.”  Pennsylvania Law Weekly (October 2, 2018).

Court Upholds Carrier's Right to Deny Coverage For Material Misrepresentations After Fire Loss

In the Western District Federal Court case of American National Property and Casualty Co. v. Felix, No. 3:16-cv-147 (April 11, 2018 Gibson, J.), the court granted the carrier Defendant’s Motion for Summary Judgment as to all claims of bad faith asserted.

According to the Opinion, this case arose out of the carrier’s denial of the insured’s claim under a homeowner’s policy after the insured’s home was damaged by fire.  

Part of the issues raised in this matter included an allegation that the insured had submitted material misrepresentations to the carrier after the fire loss in that he, in part, asserted that diamond stud earrings and a Louis Vuitton purse were lost in the fire.  During the carrier’s investigation, the carrier consulted with the insured’s ex-fiancé who confirmed that she was in possession of the diamond stud earrings and the Louis Vuitton purse that the insured claimed had been lost in the fire.  

After securing a legal opinion on whether the policy could be voided due to an alleged material misrepresentation by the insured, the carrier decided to deny the claim and to file a lawsuit against the insured for a Declaratory Judgment to seek judicial confirmation that the carrier was not required to provide coverage to the insured based upon alleged material misrepresentations.   The carrier also included a claim against the insured for civil insurance fraud in the Complaint.  

The insured responded by filing an Answer and Counterclaims for breach of contract and statutory bad faith. 

The case later came before the court on cross-Motions for Summary Judgment.  

After reviewing the current status of Pennsylvania law pertaining to Pennsylvania’s Bad Faith Statute and applying the same to the record before it, the court granted the carrier’s motion and denied the insured’s motion.  

Anyone wishing to review a copy of this decision may click this LINK. 

I send thanks to Attorney Joseph Hudock of Summers, McDonnell, Hudock, Guthrie & Rauch, along with Attorneys Richard McMonigle and Brian Shay of Post & Schell for bringing this case to my attention.

Summary Judgment Granted on Federal Middle District Homeowner's Bad Faith Claim

In what may be one of the first post-Rancosky decisions (but in which Rancosky was not cited), summary judgment was granted on a homeowner's insurance bad faith claim in the Federal Middle District Court case of Davenport v. USAA Casualty Ins. Co., No. 1:16-CV-2378 (M.D.Pa. Oct. 11, 2017 Jones, J.).

The court noted that, although there were disputes between the parties over the coverage benefits available under the policy, the homeowners had not presented any clear and convincing evidence of bad faith.  With respect to the property damage estimates generated by the carrier for the fire losses incurred, the court noted that the courts have not recognized bad faith where an insurer makes a low but reasonable estimate of the insured's losses.

Overall, the court found that the Plaintiffs had not provided clear and convincing evidence that USAA acted in bad faith in the adjustment of the claim.

Anyone wishing to review this decision may click this LINK.

I send thanks to Attorney Brigid Q. Alford of the Harrisburg, PA office of Marshall, Dennehey, Warner, Coleman & Goggin for bringing this case to my attention.

Public Road Not Part of "Insured Location" Under Homeowner's Policy

In his recent decision in the case of O’Brien v. Ohio Casualty Insurance Company, No. 2002-CV-6690 (C.P. Lacka. Co. Oct. 14, 2015 Minora, J.), Judge Carmen D. Minora of the Lackawanna County Court of Common Pleas denied a Plaintiff’s Motion for Post-Trial Relief following a bench trial on a declaratory judgment action involving an insurance coverage issue under a homeowner’s policy. 
The Plaintiff was at a graduation party at the homeowner’s residence. During the party, the injured party Plaintiff was operating an ATV owned by the homeowner’s son when the injured party Plaintiff crashed after hitting loose gravel, striking a tree and a telephone pole and coming to rest on the property of a different residence.

The homeowner’s insurance company for the Defendant homeowner denied coverage under policy provisions indicating that liability coverage did not apply to bodily injury arising out of the entrustment by an insured of a motor vehicle or any other motorized land conveyance to any person. The policy language also provided that this exclusion did not apply to a motorized land conveyance designed for recreational use off public roads, which was not subject to motor vehicle registration, and which was owned by an insured and on an insured location.

Judge Minora had previously denied summary judgment on the issues presented in this case.  A summary of that decision may be viewed in a prior Tort Talk blog post HERE. 

After a bench trial in the declaratory judgment action, Judge Minora issued a Memorandum and Order holding that the location of the ATV accident could not meet the policy definition of an "insured location" under the policy of insurance.

Accordingly, the court found that the homeowners lacked insurance coverage and that the homeowner’s insurance carrier was not required to either defend or indemnify the homeowner’s under that policy of insurance.

Thereafter, the injured party Plaintiff filed a Motion for Post-Trial Relief. In his most recent Opinion in this case, Judge Minora revisited the issues and reaffirmed his decision that coverage need not be afforded under the policy at issue. In so ruling, Judge Minora reiterated his finding, based upon Pennsylvania appellate law, that the definition of "insured location" is not broad enough to include the public roadway involved in the subject accident. 
Anyone wishing to review Judge Minora's October, 2015 Opinion in O'Brien may click this LINK.


UPDATE:  Judge Minora's decision was affirmed on appeal by the Pennsylvania Superior Court in a non-precedential memorandum decision issued on October 25, 2016.

Public Road Running in Front of Home Not Part of "Insured Location" For Homeowner's Insurance Coverage Purposes

In his recent decision in the case of   O'Brien v. Ohio Casualty, No. 2002 CV 6990 (C.P. Lacka. Co.   Minora, J.), Judge Carmen D. Minora of the Lackawanna County Court of Common Pleas ruled that a homeowner's carrier had a duty to defend and indemnify in a case involving an ATV accident that occurred off of the premises of the insured homeowner.

After thoroughly reviewing the current status of the duty to defend/duty to indemnify law for declaratory judgment actions involving liability insurance coverage questions, Judge Minora tackled the central question before him of whether the "insured location" as defined in the insurance policy was implicated by the facts pertaining to how the subject accident occurred.

In the policy, the "insured location" was generally defined as the "premises you use."

Here, the person injured on the ATV drove the ATV away from the insured home, down the road, and then crashed on another homeowner's property.  Pointing to the similar scenario presented in the federal court decision of Haines v. State Auto, Judge Minora noted that the policy definition in that case was not found to cover a public road that ran in front of the insured premises.

Judge Carmen D. Minora
Lackawanna County

Judge Minora also pointed to a court of common pleas decision in which a similar argument was rejected on the grounds that it was unlawful to drive an ATV on public roadways.

As such, the court in O'Brien rejected the insured homeowners' attempt to invoke the coverage provision of the policy under an argument that they regularly used the road upon which the ATV was driven at the time of the accident.  The court also pointed out that the insured homeowners who were being sued did not regularly use the other property upon which the ATV eventually crashed so as to invoke the "insured location" language under the policy.

Accordingly, the homeowner's Motion for Summary Judgment on the coverage issue was denied and the carrier was not required to defend or indemnify the homeowners with respect to the underlying personal injury lawsuit arising out of the ATV accident involving an ATV owned by the homeowners' son.

Anyone wishing to review this decision online, may click this LINK.

Judge Burke of Luzerne County Finds No Homeowner's Coverage for Insured Who Injured Cops Arresting Him During Domestic Dispute

And then there's the other side of LOVE that can give rise to litigation.......

In his recent decision in the case of Nationwide Mutual Fire Ins. Co. v. Norton, No. 6557 of 2013 (C.P. Luz. Co. Oct. 24, 2014 Burke, P.J.), Judge Thomas F. Burke, Jr. granted Nationwide’s Motion for Summary Judgment in a declaratory judgment action on the issue of coverage under a homeowner’s policy.  

Judge Thomas F. Burke, Jr.
Luzerne County

Judge Burke framed the issue before him as involving a question of whether, under the subject Nationwide Insurance policy covering the real estate and residents own by Christopher and Rose Norton, Nationwide has a duty to defend or indemnify them for injuries sustained by police officers while arresting Christopher Norton on the property due to an alleged domestic dispute.  

After a review of the policy language at issue and the relevant case law, Judge Burke ruled that Nationwide did not have a duty to defend or indemnify the insured Defendants in the underlying claim pursued by the injured police officers.  

According to the Opinion, the police officers had responded to a call placed by Norton’s wife with regards to a potential domestic dispute.  During the course of responding to the call, the police officers were injured while arresting Christopher Norton.  

The subject Nationwide policy had an Intentional Acts Exclusion as well as a Criminal Acts Exclusion.

The Criminal Acts Exclusion expressly provided that the Exclusion applied regardless of whether the insured was actually charged with, or convicted of, a crime.  

Judge Burke set forth the relevant case law for coverage declaratory judgment actions which requires that the allegations of the underlying Complaint be reviewed against the language of the insurance contract.  Moreover, where the language of the insurance contract is clear and unambiguous, the court is required to give effect to that language. 

The records before the court confirmed that the insured, Christopher Norton, was arrested, charged criminally, and pled guilty to several counts of simple assault and a single count of resisting arrest.   It was equally clear to the court that the insured  had admitted to acting with a mens rea of conduct other than negligence when he committed these criminal acts by virtue of his guilty plea to the criminal charges.  

Judge Burke also ruled that the alleged injuries sustained by the police officers were indeed a result of the insured’s criminal acts as opposed to any negligent personal acts or negligence arising out of the ownership, maintenance, or use of the real or personal property covered by the policy.  

Ultimately, Judge Burke ruled that the allegations of the Plaintiff’s Complaint failed to invoke the personal liability coverage provisions of the policy and also fell under the liability exclusions listed elsewhere within the policy.  

As such, the court granted the Motion for Summary Judgment filed by the carrier and ruled that Nationwide was not legally obligated to defend or indemnify Defendant, Christopher Norton, in the underlying action arising out of the insured's criminal assaults that resulted in injuries to police officer(s) during a domestic abuse situation that occurred in the insured's home.  


Anyone desiring a copy of this Opinion, which contains a thorough recitation of the duty to defend/indemnify analysis for insurance coverage actions under a homeowner’s policy, may contact me at dancummins@comcast.net.