KEYS v. ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE THOMAS N. ONEILL, JR ON 2/7/17. 2/7/17 ENTERED AND COPIES EMAILED TO COUNSEL AND COPY TO LEGAL.(jaa, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
VALERIE KEYS et al.
ALLSTATE PROPERTY AND
CASUALTY INSURANCE COMPANY
February 7, 2017
This case arises out of defendant Allstate Property and Casualty Insurance Company’s
denial of coverage to plaintiff Valerie Keys for water damage to her home that occurred on July
27, 2014. 1 I conducted a bench trial on January 25, 2017. Having considered the documentary
evidence and testimony, I make the following findings of fact and conclusions of law pursuant to
Federal Rule of Civil Procedure 52(a). Because I find that the damage to plaintiff’s home was
not covered by her insurance policy, I will enter judgment in favor of defendant with respect to
plaintiff’s claim for breach of contract.
FINDINGS OF FACT
2011 Roof Repair
Plaintiff testified that around 2011 she replaced her roof for $2,900. Tr. at 19:2–4
(Keys). She testified she did so because her neighbor had done the same and inspired her. Tr. at
18:7–19:11 (Keys). Plaintiff did not have receipts or invoices describing this work. Tr. at 47:2–
Plaintiff Beneficial Bank (previously Conestoga Bank) joined this action seeking to
recover any proceeds from this litigation against plaintiff’s mortgage debt. The parties do not
dispute Beneficial Bank’s claim against defendant, which is conditional on plaintiff Keys
establishing liability under the insurance contract. Because I find in defendant’s favor, I do not
discuss issues relating to Beneficial Bank in this memorandum.
10 (Keys). Plaintiff did not testify to whether she determined she had a need to replace her roof
before undertaking the replacement.
On July 27, 2014, plaintiff returned from vacation to find that water had penetrated her
home at 5638 North 18th Street in Philadelphia. Tr. at 12:1, 20:6–22:22 (Keys). On the top floor,
the carpet, the curtains in the master bedroom, the towels in the bathroom and the clothes in the
closet were all wet. Tr. at 22:2–22 (Keys). The paint on the ceilings in several rooms was
peeling. Tr. at 22:2–4, 22:17–22 (Keys). Plaintiff, who had lived in that home for 37 years, had
not discovered water damage like this before. Tr. at 22:23–23:3 (Keys).
The day she discovered the water in her home, she also saw evidence of a recent storm in
her neighborhood. Tr. at 26:5–11 (Keys). She saw that fallen branches from a large tree on her
neighbor’s property had been gathered into a pile her neighbor’s yard. Tr. 24:16-20 (Keys).
This tree is near plaintiff’s property and the branches hang over her roof. Tr. at 23:20–22, 24:1–
Plaintiff had insured her home with Allstate against “loss to the interior of a building
structure, or covered property inside, caused by rain . . .” but only if “wind or hail first damages
the roof or walls and the wind forces rain . . . through the damaged roof or wall.” Pl.’s Ex. 1
(Allstate Property Insurance Company Policy No. 928925341) at 8. This policy was in effect at
the time of plaintiff’s loss. Tr. at 43:13–15 (Weinberg); Def.’s Pretrial Mem. at ECF p. 5
(agreeing to stipulate to this fact); Pl.’s Pretrial Mem. at ECF p. 3 (same).
First Roof Inspection
Plaintiff contacted Allstate to seek coverage for her losses. Tr. at 23:12–13 (Keys).
Allstate told her they would send someone to look at the damage to her property. Tr. at 26:13–14
(Keys). On September 9, 2014, plaintiff contracted with Metro Public Adjustment to represent
her in her negotiation of her claim with Allstate. P-3 (Contract between Keys and Metro, Sept.
9, 2014); Tr. at 31:16–19, 34:13–20 (Keys) (describing the date of contract as September 2,
Plaintiff testified that someone from Metro came to her home and put tarps on her roof.
Tr. at 33:20–24 (Keys). She also testified that she does not remember who these people were or
what date this occurred. Tr. at 50:17–24, 51:23–52:2, 52:18– 24 (Keys). She testified that, on
this occasion, she observed a pile of branches on her lawn, some of which were very large, that
the people who had installed the tarp on her roof had removed. Tr. at 39:3–40:10 (Keys).
Allstate frequently contracts with RJE Home Remodeling Company to inspect homes
when claims are filed. Tr. 64:12–13 (McNaney). RJE sent Michael McNaney, a claim inspector
with over ten years of relevant experience and an HEG certification for evaluating storm damage
to homes, to inspect plaintiff’s home on September 23, 2014. Tr. at 62:16–63:2, 67:4–5
(McNaney). In the course of inspecting plaintiff’s roof, McNaney found that between 10 and 20
percent of the roof was covered by tarps that were nailed to the roof. Tr. at 71:1–14 (McNaney);
102:1–8; 110:21–111:4. Concerned that removing the tarps would damage the roof, he looked
under the corners of the tarps and otherwise inspected the rest of the visible roof. Tr. at 72:2–4
During this inspection, McNaney found no openings in the roof that were caused by wind
or rain. Tr. at 75:9–77:10 (McNaney). He found “no evidence of wind lifting or any other storm
related damage.” Pl.’s Ex. 13 (Roof Inspection Report, Sept. 23, 2014). He noted rather that:
[t]he rolled roofing on the right partition wall around the tarps is
decayed with large openings. The chimney located in the middle
of the right partition wall has decayed tar around the flashing area.
The tar is pulled away from the bricks and this has left a large open
area around the chimney. I inspected a small portion underneath
the tarp and found decayed rolled roofing on the partition wall
under this area. The rolled roofing along the rear and front walls is
also decayed with large open seams. The partition wall roofing
needs to be replaced to ensure no further leaking. The rolled
roofing needs to be replaced (due to its age) to ensure no future
Id. The “large openings” to which McNaney refers in his report were over a foot long. Tr. at
96:23–97:4 (McNaney). McNaney estimated that these openings could have developed over the
course of three months and up to two years before his inspection. Tr. at 104:21–105:6
(McNaney). In contrast to plaintiff’s testimony that she replaced her roof in 2011, McNaney
found that, though tar on the roof appeared to have been laid within the last five years, the roof
itself was 18 to 20 years old. Tr. 68:23–69:9, 112:14–24, 113:15–23 (McNaney). McNaney saw
no evidence that large branches had fallen from plaintiff’s neighbor’s tree. Tr. at 74:6–21
Second Roof Inspection
Allstate property adjuster Clare Erskine reviewed Mr. McNaney’s report and determined
that McNaney should reinspect plaintiff’s roof to ensure there was no evidence of storm damage
under the tarps. Tr. at 137:19–138:20 (Erskine). On October 29, 2014, McNaney and Allstate
claims adjuster Blake Ingraham arrived at plaintiff’s property. Tr. at 77:11–14, 78:20–21
(McNaney). McNaney removed the tarps on the roof and inspected underneath them. Tr. at
79:7–16 (McNaney). Plaintiff was present during this inspection and spoke with Ingraham but
neither she nor Ingraham went on the roof. Tr. at 37:24–38:22 (Keys); Tr. at 77:15–16, 78:11–
Again, McNaney found no evidence that the roof had been damaged by tree branches,
falling debris or any other wind- or storm-related occurrence. Tr, at 78:22–79:6, 79:10–80:22
(McNaney). He saw no large branches, bark, scrapes, punctures or other evidence of impact. Tr.
at 74:6–21, 80:20–81:20 (McNaney). He found that the rolled roofing was protruding outward,
which suggested decay rather than damage from a puncture. Tr. at 82:17–83:5 (McNaney).
McNaney did not create a second report, but he drew a diagram and took additional photographs.
Def.’s Ex. 6 (Photo Sheet); Tr. at 110:10–20 (McNaney).
The day after McNaney’s second inspection, Allstate sent plaintiff a letter denying her
coverage under her policy. Pl.’s Ex. 12 (Letter from Blake Ingraham to Valerie Keys, Oct. 30,
2014); Tr. at 37:6–13 (Keys).
Plaintiff had not discovered any water infiltration to her home after the damage from the
July storm. Tr. at 33:20–22. After repeatedly having the tarps replaced or re-affixed to her roof
in 2014 and 2015, plaintiff had her son and her son’s friend repair the roof. Tr. at 36:3–18
(Keys). This was approximately a year after she discovered the leak. Tr. at 50:5–12 (Keys).
At some point in the spring of 2015, Metro sent plaintiff a letter explaining that it would
no longer represent her in her claim against defendant. Tr. 53:24–54:3 (Keys). Defendant never
compensated plaintiff for the damage to her home. Tr. at 43:3–7, 44:17–19 (Keys). She then
brought this suit against defendant for breach of contract.
Pursuant to Rule 52(a), the court, as fact-finder, must weigh evidence, make credibility
determinations, and draw all reasonable inferences from the evidence. Fed. R. Civ. P. 52(a);
Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 856 (1982) (“[Rule 52(a)
recognizes the] unique opportunity afforded the trial judge to evaluate the credibility of
witnesses and to weigh the evidence.”).
I find defense witness McNaney credible in his testimony that plaintiff’s roof was
between 18 and 20 years old. I do not find it credible that plaintiff decided to replace her roof in
2011 simply because her neighbor had done so and without first determining that her roof was in
need of repair. I find that plaintiff merely re-tarred her roof around 2011 rather than replacing it.
I also find McNaney credible in his testimony that openings in plaintiff’s roof were not
caused by wind or by tree branches that fell due to wind but rather by decay. Plaintiff provides
no testimony from anyone who went onto her roof and observed the damage. She merely
provides her own testimony that she saw large branches removed from her roof at some point in
the fall and that she had not previously had water damage to her home. I do not infer from her
testimony that wind caused large branches to puncture her roof when compared to McNaney’s
testimony to the contrary.
CONCLUSIONS OF LAW
To succeed on her breach of contract claim under Pennsylvania law, plaintiff must
establish, by a preponderance of the evidence, “(1) the existence of a contract, including its
essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages.” Ware
v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003), quoting CoreStates Bank, N.A. v.
Cutillo, 723 A.2d 1053, 1058 (Pa. Super. Ct. 1999). The parties agree that a contract, with
essential terms, existed between the parties. They dispute whether defendant breached by
refusing to pay plaintiff for the damage to her home.
In order to show defendant’s denial of coverage was a breach of its contractual
obligations, plaintiff must establish by a preponderance of the evidence that wind damaged the
roof of her home before forcing rain inside. See Pl.’s Ex. 1 (Allstate Property Insurance
Company Policy No. 928925341) at 8 (providing coverage for interior damage only if “wind or
hail first damages the roof or walls and the wind forces rain . . . through the damaged roof or
wall”). I find that plaintiff has not proven that wind damaged her home before the rain damaged
her home’s interior. Thus, she has not proven that the damage to her home fell within the
coverage of her insurance policy. Therefore, I will enter judgment in favor of defendant and
against plaintiff. 2
An appropriate Order follows.
Prior to trial, defendant filed a motion in limine to exclude the testimony of Roger
Williams, an estimator who would testify to the extent of the damage to plaintiff’s home, on the
basis that plaintiff did not timely disclose her intention to call this witness. Dkt. No. 41 (Def.’s
Mot. in Limine); Dkt. No. 44 (Pl.’s Answer to Def.’s Mot. in Limine). I allowed Williams to
testify and committed to resolving the motion in limine if I could not decide the case without his
testimony. Tr. at 7:10–15. Because I do not find defendant liable, I do not need to consider the
admissibility of Williams’s testimony, which goes to damages. Therefore, I will dismiss
defendant’s motion as moot.
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