KRAMER et al v. ALLSTATE INSURANCE COMPANY
MEMORANDUM AND ORDER THAT JUDGMENT IS ENETERED IN FAVOR OF PLAINTIFF ROGER KRAMER AND COLLEEN O'NEILL. PLAINTIFFS ARE AWARDED AN ADDITIONAL $12,000.00 FOR THEIR PROPERTY DAMGAGE; ETC.. SIGNED BY MAGISTRATE JUDGE TIMOTHY R. RICE ON 10/7/13. 10/7/13 ENTERED AND E-MAILED.(jl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYL V AI lA
ROGER KRAMER, et al.,
ALLSTATE INSURANCE COMPANY,
Plaintiffs Roger Kramer and Colleen O'Neill Brusius filed a breac
against Defendant Allstate Insurance Company ("Allstate") based on their orne insurance policy
number 0234624260 (the "Policy") for soot damage in their home located n Tina Drive in
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
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
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
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,
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.
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
Because it does not appear from the pictures or Knop's estimate th
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
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.
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
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
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
Washko estimated it would take one month to complete the Prope
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.
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
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
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
oc\ , 1.0\l
cLER or couro7
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