CAPRIOTTI et al v. ALLSTATE PROPERTY AND CASUALTY INS. CO. et al
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE THOMAS N. ONEILL, JR ON 9/6/2012. 9/6/2012 ENTERED AND COPIES E-MAILED.(sg, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
NICHOLAS AND KARA CAPRIOTTI
ALLSTATE PROPERTY AND
CASUALTY INSURANCE COMPANY
SEPTEMBER 6, 2012
Plaintiffs Nicholas and Kara Capriotti seek damages, attorney fees and other relief based
on claims of breach of contract and bad faith against defendant Allstate. Defendant has filed a
motion for summary judgment. Also before me are plaintiffs’ response to the motion and
defendant’s reply. For the reasons that follow I will grant in part and deny in part defendant’s
The Capriottis were insured under a homeowners insurance policy issued by Allstate.
Dkt. No. 4-1 at ECF p. 2. The policy covered “sudden and accidental direct physical loss to
property.” Id. at ECF p. 9. The policy excluded coverage for loss caused by “seepage, meaning
continuous or repeated seepage or leakage over a period of weeks, months, or years” from
plumbing. Id. at ECF p. 16. The policy further excluded coverage for loss caused by “wear and
tear, aging, marring, scratching, deterioration, inherent vice, or latent defect” or by “rust or other
The loss at issue in this case is water damage to the Capriottis’ basement, which plaintiffs
used every day. N. Capriotti Dep. at 19:25-20:3. Nicholas Capriotti testified that he discovered
that the carpet in his basement was saturated with water and contacted Jamison Basement
Waterproofing within “a couple days.” Id. at 23:4-10. He could not recall the exact date he
noticed his carpet was wet, id. at 18:24-19:2, but a Jamison record indicating a scheduled
appointment with the Capriottis is dated September 1. Dkt. No. 19-8. Allstate’s records show
that plaintiffs subsequently notified Allstate of water damage to their home on September 26,
2011. Dkt. No. 17-13 at ECF p. 2. That same day, a plumber conducted an inspection and
discovered a “break” in a pipe under plaintiffs’ home. Dkt. No. 19-9.
Nicholas Capriotti also testified that he believed that water caused a portion of his
basement wall to rot. While inspecting the wall he “poked [his] finger . . . to see what was the
problem with the wall and [his] finger went through the wall.” N. Capriotti Dep. at 87:4-6.
Capriotti described the wall material as “some sort of masonry.” Id. at 87:22-23. He could not
recall the date he punctured the wall with his finger. Id. at 88:6-8.
Allstate claims adjuster Louis Mincarelli handled plaintiffs’ claim. His claim notes show
that on September 26, before he had inspected plaintiffs’ home, he wrote that a sewer line under
plaintiffs home broke “and has been gradually leaking overtime [sic].” Dkt. No. 19-10 at ECF p.
1. Mincarelli subsequently inspected plaintiffs’ home on October 10. Id. at ECF p. 5. Nicholas
Capriotti testified that between September 26 and October 10 there was “continuous damage” to
his home. N. Capriotti Dep. at 75:5. Mincarelli’s inspection notes state that “the walls show
damage from long term deterioration, the carpet tack slips are black and show signs of rot.” Dkt.
No. 19-10 at ECF p. 5. At his deposition Mincarelli admitted that although he personally
inspected the damage, he did not personally inspect the cause of the leak and instead relied on
plumbers’ reports. Mincarelli Dep. at 29:19-30:1 He could not pinpoint exactly how long water
had been leaking from the pipe, but he testified that “the evidence shows that it was more than
one week, more than two weeks, probably more than a few months.” Id. at 25:4-7. Mincarelli
based his conclusion on the rot in plaintiffs’ basement wall and the discoloration in their carpet
tack strips. Id. at 25:14-20. Ultimately, Allstate denied plaintiffs’ claim on the grounds that
plaintiffs’ loss was not “sudden.” Dkt. No. 17-3 at ECF p. 17. Allstate further concluded that
the policy exclusions for “seepage,” “wear and tear” and “rust or other corrosion” applied. Id. at
The Capriottis, however, contend that the damage was caused by a sudden break in the
pipe and they now bring two claims based on defendant’s denial of coverage. First, plaintiffs
contend that the “actions and/or omissions of Defendant constitutes [sic] bad faith” pursuant to
42 Pa. Cons. Stat. § 8371. Am. Compl. ¶ 24. Second, plaintiffs aver that Allstate breached their
contract. Id. ¶ 29.
STANDARD OF REVIEW
Summary judgment will be granted “against a party who fails to make a showing
sufficient to establish the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The party moving for summary judgment bears the burden of demonstrating 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); see Celotex, 477 U.S. at 322-23. If the movant sustains its burden, the
nonmovant must set forth facts demonstrating the existence of a genuine dispute. See Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A dispute as to a material fact is genuine if
“the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.
A fact is “material” if it might affect the outcome of the case under governing law. Id.
To establish “that a fact cannot be or is genuinely disputed,” a party must:
(A) cit[e] to particular parts of materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those made for
purposes of the motion only), admissions, interrogatory answers, or
other materials; or
(B) show[ ] that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1). The adverse party must raise “more than a mere scintilla of evidence in
its favor” in order to overcome a summary judgment motion and cannot survive by relying on
unsupported assertions, conclusory allegations, or mere suspicions. Williams v. Borough of W.
Chester, 891 F.2d 458, 460 (3d Cir. 1989). The “existence of disputed issues of material fact
should be ascertained by resolving all inferences, doubts and issues of credibility against” the
movant. Ely v. Hall’s Motor Transit Co., 590 F.2d 62, 66 (3d Cir. 1978) (citations and quotation
Breach of Contract Claim
Allstate moves for summary judgment with respect to the Capriottis’ breach of contract
claim. To establish a claim for breach of contract under Pennsylvania law, plaintiffs must
demonstrate that “there was a contract, the defendant breached it, and plaintiffs suffered damages
from the breach.” McShea v. City of Phila., 995 A.2d 334, 340 (Pa. 2010). In this case the
parties dispute whether Allstate breached a duty imposed by the language in the homeowners
policy stating that Allstate “will cover sudden and accidental direct physical loss to property.”
Dkt. No. 4-1 at ECF p. 9.
The interpretation of the language of an insurance contract is a question of law that is
decided by the court. Reliance Ins. Co. v. Moessner, 121 F.3d 895, 900 (3d Cir. 1997). “Where
the provision of the policy is ambiguous, the policy provision is construed in favor of the insured
and against the insurer, the drafter of the instrument. If the policy language is clear and
unambiguous, we give effect to the language of the contract.” Bateman v. Motorists Mut. Ins.
Co., 590 A.2d 281, 283 (Pa. 1991).
Allstate contends that the rot in the Capriottis’ wall and the discoloration of their carpet
tack slips show that plaintiffs’ loss was gradual, not sudden. In its motion for summary judgment
Allstate advances the Pennsylvania Superior Court’s definition of “sudden” in Lower Paxton
Township v. U.S. Fidelity & Guaranty Co., 557 A.2d 393 (Pa. Super. Ct. 1989). The Lower
Paxton Court considered policy that used the language “sudden and accidental,” like the policy at
issue in the present matter. The Court explained that
[r]eading “sudden” in its context, i.e. joined by the word “and” to
the word “accident,” the inescapable conclusion is that “sudden,”
even if including the concept of unexpectedness, also adds an
additional element because “unexpectedness” is already expressed
by “accident.” This additional element is the temporal meaning of
sudden, i.e. abruptness or brevity. To define sudden as meaning
only unexpected or unintended, and therefore as a mere restatement
of accidental, would render the suddenness requirement mere
Id. at 402. Plaintiffs do not challenge Allstate’s proposed definition of “sudden,” nor do they
argue that the policy is ambiguous. Instead, the Capriottis argue that their loss is sudden because
they “discovered the water saturation on the carpeting of the basement floor after not noticing
any water infiltration prior to that day.” Dkt. No. 19 at ECF p. 13.
I conclude that there is a genuine issue of material fact as to whether the Capriottis’ loss
was sudden. The rot in the wall and the staining of the carpet tack slips suggests gradual water
damage. On the other hand, Nicholas Capriotti testified that his family used their basement on a
daily basis and that one day he discovered that the basement carpet was saturated with water,
which suggests that the water damage to their home was in fact sudden. Additionally, Mincarelli
did not observe the discolored carpet tack slips until approximately one month after Nicholas
Capriotti noticed his carpet was drenched. A reasonable jury could conclude that the Capriottis
suffered sudden property damage in early September and that the carpet tack slips became
discolored between then and October 10, the date of Mincarelli’s inspection. I will therefore
deny Allstate’s motion for summary judgment with respect to the Capriottis’ breach of contract
Bad Faith Claim
Allstate also seeks summary judgment on plaintiffs’ bad faith claim. Pennsylvania
provides a statutory remedy for bad faith in insurance policy actions. 42 Pa. Cons. Stat. § 8371.
Although the statute does not define bad faith in an insurer’s decision not to pay a claim, the
Pennsylvania Superior Court has explained that “such conduct imports a dishonest purpose and
means a breach of a known duty (i.e. good faith and fair dealing), through some motive of selfinterest or ill will; mere negligence or bad judgment is not bad faith.” Terletsky v. Prudential
Prop. & Cas. Ins. Co., 649 A.2d 680, 688 (Pa. Super. Ct. 1994). Thus, a plaintiff alleging bad
faith must demonstrate “(1) that the insurer lacked a reasonable basis for denying benefits; and
(2) that the insurer knew or recklessly disregarded its lack of reasonable basis.” Klinger v. State
Farm Mut. Auto. Ins. Co., 115 F.3d 230, 233 (3d Cir. 1997). The burden of proof on a bad faith
claim requires that a plaintiff establish these elements by “clear and convincing evidence.”
Terletsky, 649 A.2d at 688.
I will grant Allstate’s motion with respect to the Capriottis’ bad faith claim because a
reasonable jury could not find that plaintiffs established by clear and convincing evidence that
Allstate lacked a reasonable basis for denying their claim. Allstate denied the Capriottis’ claim
only after conducting an in-person inspection of their home. Allstate’s inspector observed wall
rot and discolored carpet tack slips, both of which suggest gradual, not sudden, damage. Allstate
therefore had a reasonable basis for denying the Capriottis’ claim. See El Bor Corp. v. Fireman’s
Fund Ins. Co., 787 F. Supp. 2d 341, 349-50 (E.D. Pa. 2011) (applying Pennsylvania law and
granting insurer’s motion for summary judgment on bad faith claim where insurer had
“reasonable grounds” for denying benefits). Accordingly, I will grant defendant’s motion as to
plaintiffs’ bad faith claim.
An appropriate Order follows.
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