Filing 45


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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYL V AI lA ROGER KRAMER, et al., Plaintiffs, v. No. 12-4407 ALLSTATE INSURANCE COMPANY, Defendant. MEMORANDUM OPINION Plaintiffs Roger Kramer and Colleen O'Neill Brusius filed a breac against Defendant Allstate Insurance Company ("Allstate") based on their orne insurance policy 1 number 0234624260 (the "Policy") for soot damage in their home located n Tina Drive in 1 Langhorne, Pennsylvania (the "Property"). Based on the testimony prese ted during the September 24,2013 bench trial, and for the following reasons, I award $1 ,100.00 to repair and restore Plaintiffs' Property. I also award Plaintiffs $12,000.00 for Additio al Living Expenses ("ALEs"), conditioned upon Plaintiffs submitting proof within 30 days of e accompanymg Order that they are using the award to repair their Property. A plaintiff asserting a breach of contract claim must prove: '"(1) th existence of a contract, including its essential terms, (2) a breach of a duty imposed by th contract[,] and (3) resultant damages."' Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Ci . 2003) (quoting CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. Ct. 1999)). "The goal of interpreting an insurance policy, like that of interpreting any other contract is to determine the Pursuant to a stipulation between the parties, Plaintiffs dismissed t eir bad faith claim. See Stip. (doc. 11 ). 648 F.3d 154, 163 (3d Cir. 2011). When the language ofthe policy is clea and unambiguous, I must give effect to that language. Nationwide Mut. Ins. Co. v. CPB Int'l I c., 562 F.3d 591, 595 (3d Cir. 2009) (citing Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 86, 290 (2007)). "However, 'when a provision in the policy is ambiguous, the policy is to b construed in favor of the insured .... "' Id. (quoting Donegal Mut. Ins. Co., 938 A.2d at 290). Plaintiffs' Policy covered "sudden and accidental direct physicallo s" to the Property. See De f.'s Ex. 1, Policy at 7. In the event of a covered loss, Allstate could (1) repair or replace all or part of the damaged or destroyed property with "property of like kin and quality within a reasonable time;" or (2) pay for all or part of the damaged or destroyed pro erty. Id. at 21. The Policy also provided that, in the event that a covered loss made the residen e uninhabitable, Allstate would pay Plaintiffs' ALEs, which are the costs of reasonably inc eased living expenses necessary to maintain their normal standard of living. Id. at 16. ALEs we e limited to the least of: (1) the time required to repair or replace the covered property, using "d e diligence and dispatch;" (2) if Plaintiffs permanently relocated, the shortest time for Plai tiffs to settle their household elsewhere; or (3) 12 months. Id. The parties agree that the soot damage in Plaintiffs' Property was c vered by the Policy, and that Allstate has already provided Plaintitis the following payments: (1) $8,479.66 for dwelling damages; (2) $8,095.06 for unscheduled personal property dama es; and (3) $40,806.90 for five months of ALEs. See Bench Tr. Stip. (doc. 44) ~ 3. H wever, the parties dispute the amount of money required to restore Plaintiffs' Property to its re-loss condition and the method by which Plaintiffs could complete the restorations. Plaintiffs claim Allstate breached the Policy by providing insuffici nt payment for their 2 damaged Property and ALEs for only five months. They seek $198,360.1 , minus any payments already received by Allstate, based on the estimate calculated by Steven K op, an expert in damage estimating. See Bench Tr. Stip. ,[,[ 9, 10. Plaintiffs also seek 12 onths of ALEs, demanding that Allstate pay the remaining seven months of the ALEs the oliey allowed. See id. ~ 10. Allstate argues it paid Plaintiffs sufficient damages to cover their loss and ALEs. It also contends that the Property could be cleaned and does not require pain ·ng, re-carpeting, or removal of all contents prior to repairs being initiated. Allstate failed to provide Plaintiffs with sufficient payment for rep ir or payment for all or part ofthe Plaintiffs' covered loss. Although the $16,574.72 payment as sufficient to allow Plaintiffs to clean a majority of the Property and its contents, it was insuffi ient to repair or replace all of the covered losses. Karen Washko, an expert in insurance a ·ustment and damage estimating, testified that most of the Property's walls were painted in high- loss paint and could be easily cleaned. See Bench Tr. Stip. ~ 8. However, a number of the Pro erty contents and small items, referred to as "nic-nacks," required cleaning. Although I agre with William H. Neef, an expert in cleaning and restoration, that a "pack-out" of the conten s was unnecessary, the contents must be cleaned and Plaintiffs should be reimbursed for those cleaning costs. 2 See Bench Tr. Stip. ~ 5. Thus, I award an additional $3,000.00 for cleaning co ts. I also award the costs for repairing portions of the Property damag d by soot. I disagree, 2 Knop included the costs of a "pack-out" of Plaintiffs' Property. H explained that when individuals have "the resources," such as being insured, they should condu t the expensive and time-consuming process of removing all of the items, packing them, shipp"ng them, and storing them in another location. This explanation demonstrates that a pack-out is an unnecessary. Knop's testimony regarding the pack-out also was contradicted by Neefs estimony that the standard practice is to clean on-site. 3 however, with Knop's estimate, which essentially calls for the total restora ion of Plaintiffs' Property. Although Knop testified the Property had soot damage in every oom, only minimal soot is visible in the color photographs and Washko and Neeftestified the oot they observed in the Property was minor. Frederic M. Blum, an expert in forensic mechani al engineering, industrial accidents, domestic accidents, and fires, testified that most of the rooms had as little as 10-15% of soot contaminants in the samples he tested, which means these ooms were "moderately" contaminated with soot. Sec Bench Tr. Stip. ,]6; De f.'s Ex. , Blum's Report. The playroom was the only room that had 30% of soot, which he found to e "severely" contaminated. Id. Further, Plaintiffs were not aware there was soot in the r Property until Knop arrived to provide an estimate for an unrelated Property issue. In its totalit , such evidence establishes that Knop's estimate was exaggerated and inflated. According! , I will use only portions of his estimate in determining material costs because Knop testifi d they are based on standard retail prices and appear to be reasonable. I award $3,000.00 for sealing and painting the ceilings in Plaintiffs' Property which, unlike the high-gloss, painted walls, are more difficult to clean. This amo ntis based on Neff's square footage measurements and Knop's material costs estimate. See Pl.' Ex. 2, Knop's Estim.; Def. 'sEx. 6, Neefs Estim. at 20. Although Knop's estimate calls or replacement of all carpeting, Neff testified that the darkness under the carpeting was not soot, but filtration marks. The carpets in the rooms with 20 or 30% soot contamination, however, should be replaced rather than cleaned. Plaintiffs are awarded $3,800.00 to carpet the dining room, all, and in-law's suite. 3 See Knop's Estim. for Dining Rm. at 13; Neefs Estim. for In-laws ite at 18. I also 3 Because it does not appear from the pictures or Knop's estimate th 4 the playroom was award labor costs equal to approximately 10% of each of these totals, base on Knop's estimate for profit costs, totaling $700.00. See Knop's Estim. Plaintiffs also are entitled to dry cleaning costs. There is a huge di crepancy between Knop's and Neefs dry cleaning estimates, and neither could rationally jus ify their estimates. See Knop's Estim. at 1; Neffs Estim. at 19. I award $1,600.00 for dry cle ing costs, based on Roger Kramer's testimony that there were four people living in the Prope at the time of the loss and that the soot could not be removed from the clothing during a nor Allstate asserts several unconvincing arguments as to why Plaintiff are not entitled to any additional damages. First, Allstate argues that Plaintiffs have engaged in a pattern of making insurance claims, receiving damages, and failing to make repairs. Howeve , Allstate does not dispute that the February 7, 2012loss is covered by the Policy and it has al eady paid some damages. Second, Allstate's emphasis on a prior loss is misplaced; it is no the subject of this lawsuit and it added little to Allstate's damages argument. Third, Allstate rgues that Plaintiffs failed to mitigate their damages by turning the furnace off to stop soot fro entering the Property. Although Washko, Blum, and Neeftestified that the Property's emperature was "comfortable" when they arrived to make their assessments, Knop also tes ified that the furnace was turned on only during those visits. Kramer testified that Plaintiffs wer no longer living there, thus it is unlikely that the furnace would be left on. Blum also testified that he believed no one was living in the Property. 4 Finally, Allstate's continuous mention of andle residue in the carpeted, costs for re-carpeting that room are not awarded. 4 Allstate's mitigation argument also is inconsistent with its claim th t the cause of the soot damage is unknown. Allstate elicited testimony from Blum that the playro m, the room with the highest amount of soot contamination, is not heated by the furnace. Thus, llstate argues "there 5 Property is unpersuasive. Washko testified that, as long as there is a sudd nor accidental loss, the claim will be covered, regardless of contemporaneous candle residue. Accordingly, I award a total of$12,100.00 in damages to Plaintiffs for their covered Property loss. Plaintiffs also seek the remaining seven months of ALEs. Kramer estified that the last time he and his family resided in the Property was on February 7, 2012. T ey were staying in a hotel for a period of time, which Allstate paid for, and are currently living nan apartment. Allstate contends that it stopped providing Plaintiffs with ALEs because t ey did not begin the Property repairs. In response, Plaintiffs assert that they did not begin repa· rs because Allstate did not give them enough money to complete all of the repairs at one time. Plaintiffs' judgment award is sufficient to begin and complete the overed Property repairs. They are entitled to ALEs for the time their Property is uninhabit ble. See Policy at 16. Allstate had generously provided Plaintiffs with five months of ALEs afte they submitted their claim for the soot damage and stopped only upon learning Plaintiffs did n t initiate the repairs. Thus, Allstate must have considered the Property uninhabitable for the tim it expected Plaintiffs to be making repairs. 5 Plaintiffs arc entitled to additional ALEs during the time they repair the Property. Washko estimated it would take one month to complete the Prope Neefalso is something else going on with this house," other than the furnace. This a gument also does not make the loss in that room, or any other room in the Property, uncovered u der the Policy. 5 Kramer testified that Plaintiff Colleen O'Neill Brusius has asthma, which may have been the reason Plaintiffs immediately moved from the house and the reason th y would want to complete the repairs all at one time. See also Am. Com pl. (doc. 5) at~ 11 Brusius "is unable to reside in the damaged premises as a result of a medical condition .... [the] home is not safe" for her). 6 testified that it would take four to six weeks to make the repairs, but one m nth would be reasonable. Accordingly, Plaintiffs are awarded one and a half months of LEs, totaling $12,000.00, based on their previous receipt of approximately $8,000.00 pe month in ALEs from Allstate. Plaintiffs, however, first must establish that they have started the P operty repairs and are not residing in the Property. Upon receipt of such proof within 30 days, I ill order Allstate to pay the contingent ALEs of $12,000.00. BY THE COURT: TIMOTHY R. RICE United States Magistr te Judge EN'T REO oc\ , 1.0\l cLER or couro7

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