PAZIANAS v. ALLSTATE INSURANCE COMPANY et al
MEMORANDUM. SIGNED BY HONORABLE STEWART DALZELL ON 7/18/2016. 7/18/2016 ENTERED AND COPIES E-MAILED.(amas)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
PAZIANAS, M.D., et al.
ALLSTATE INSURANCE COMPANY
July 18, 2016
We consider here defendant Allstate Insurance Company’s (“Allstate”) motion for
judgment on the pleadings. Plaintiff Michalis (Michael) Pazianas, M.D., brings a breach of
contract claim against his insurer, Allstate, for refusing to compensate him under the terms of his
homeowners insurance policy for losses he incurred as the result of water damage from burst
pipes. We have jurisdiction pursuant 28 U.S.C. § 1332.
Since both parties presented matters outside the pleadings that we will not exclude, we
will treat this motion for judgment on the pleadings under Fed. R. Civ. P. 12(c) as a motion for
summary judgment under Fed. R. Civ. P. 56. As there are no disputes of material fact to preclude
summary judgment, and the undisputed material facts demonstrate that Pazianas’s policy with
Allstate does not cover the losses for water damage, we will grant Allstate’s motion.
Standard of Review
A party may move for judgment on the pleadings after the pleadings are closed, but early
enough so as not to delay trial. Fed. R. Civ. P. 12(c). We may grant judgment on the pleadings
only if the moving party clearly establishes that there are no material issues of fact to resolve and
the moving party is entitled to judgment as a matter of law. Jablonski v. Pan Am. World
Airways, Inc., 863 F.2d 289, 290 (3d Cir. 1988). We decide such motions applying the same
standard as we do on a motion to dismiss under Rule 12(b)(6), granting the motion only when we
are certain that no relief can be granted on any set of facts. Taj Mahal Travel, Inc. v. Delta
Airlines, Inc., 164 F.3d 186, 189 (E.D. Pa. 1998); Constitution Bank v. DiMarco, 815 F. Supp.
154, 157 (E.D. Pa. 1993). We consider the facts presented in the pleadings and inferences drawn
therefrom in the light most favorable to the non-moving party. Jablonski, 863 F.2d at 291.
If, on a motion under Rule 12(c), matters outside the pleadings are presented to, and not
excluded by, the Court, the motion must be treated as one for summary judgment under Rule 56,
and all parties must be given a reasonable opportunity to present all of the material that is
pertinent to the motion. Fed. R. Civ. P. 12(d). The benefit for the plaintiff in having a Rule 12(c)
motion converted into a Rule 56 motion is that, in addition to accepting the plaintiff’s factual
allegations as true granting the plaintiff all reasonable inferences therefrom, the trial court is also
precluded from granting summary judgment unless there is no genuine issue of material fact.
Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977).
In its answer and motion for judgment on the pleadings, Allstate submitted several
exhibits, including Pazianas’s homeowners insurance policy with Allstate, a transcript of
Allstate’s examination under oath of Pazianas, an independent engineering report and two
supplemental reports, and Allstate’s letter denying coverage for the water damage. Allstate Mot.
Ex. 7. Pazianas also submitted his examination under oath as an exhibit. Pl.’s Resp. Ex. 2. Both
Allstate and Pazianas make reference to these documents in their arguments, especially
Pazianas’s examination under oath.
Under these circumstances, where the moving party has presented substantial matters
outside the pleadings and the non-moving party has incorporated those matters in its response, it
is appropriate to treat the ostensible Rule 12(c) motion as a Rule 56 motion.
Fed. R. Civ. P. 56(a) provides:
A party may move for summary judgment, identifying each claim
or defense -- or the part of each claim or defense -- on which
summary judgment is sought. The court shall grant summary
judgment if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter
of law. The court should state on the record the reasons for
granting or denying the motion.
A party moving for summary judgment bears the initial burden of informing the district
court of the basis for its argument that there is no genuine issue of material fact by identifying
those portions of the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue
of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotations omitted).
If the moving party meets this initial burden, then the non-moving party must show via
submissions beyond the pleadings that there are genuine factual issues for trial. Id. at 324. The
non-moving party must respond with facts of record that contradict the facts identified by the
moving party and may not rest on mere denials. Id. at 321 n.3.
There is a genuine issue of material fact only when there is sufficient evidence such that a
reasonable juror could find for the party opposing the motion. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 251-52 (1986) (explaining further that a mere scintilla of evidence is insufficient).
Material facts are those that would affect the outcome of the case under the governing law. Id. at
248. The Court may not make credibility determinations or weigh the evidence and must draw all
reasonable inferences in favor of the non-moving party. Reeves v. Sanderson Plumbing Prods.,
Inc., 530 U.S. 133, 150 (2000); Amour v. County of Beaver, Pa., 271 F.3d 417, 420 (3d Cir.
2001). Our function is to determine whether there are genuine issues for trial, and we may not
prevent a case from reaching a jury simply because we favor one of several reasonable views of
the evidence. Abraham v. Raso, 183 F.3d 279, 287 (3d Cir. 1999) (citing Anderson, 477 U.S. at
Allstate issued Pazianas a homeowners insurance policy that covered Pazianas’s house at
10 Hidden Springs Circle, Newtown Square, Pennsylvania (the “Property”). Am. Compl. ¶ 3.
See also Am. Compl. Ex. E (copy of renewal form for Pazianas’s policy indicating the Property
was covered from July 30, 2014 through July 30, 2015). On or about February 5, 2015, the
Property sustained water damage in excess of $50,000.00. Id. at ¶ 4. Pazianas promptly notified
Allstate of the damage. Id. at ¶ 5. Allstate has refused to pay Pazianas under the policy. Id. at ¶ 7.
Allstate raises as an affirmative defense that it has no duty to pay Pazianas under the
policy because at the time of the loss the Property was unoccupied, Pazianas had failed to use
reasonable care to heat the building during his absence, and Pazianas did not shut off the water
supply and drain the system and appliances before leaving the Property unoccupied during the
winter months. Allstate Ans. at ¶ 36.
Pazianas left the Property for England on October 10, 2014 and did not return until
February 5, 2015. Examination Under Oath of Michael Pazianas (Oct. 20, 2015) (“EUO”) at
13:16-24. No one was living at the Property from October of 2014 until Pazianas returned on
February 5, 2015, and the house was unoccupied during that time. Id. at 45:8-14. Prior to
leaving, Pazianas did not shut off the water to the Property or drain the water from the system or
appliances. Id. at 62:16-21. Before he left, Pazianas set the Property’s thermostat at 55 degrees
Fahrenheit and both the thermostat and furnace appeared to be working. Id. at 35:21 – 36:9.
Notwithstanding the instructions in the thermostat’s manual directing users to replace the
batteries once a year or before leaving home for more than a month, Pazianas did not replace the
batteries before departing for England nor had he replaced the batteries in more than a year when
he left. Id. at 30:23 – 32:12, 103:11 – 104:12. When Pazianas left for England, he thought he
might return to the Property in December, but he remained in England through January of 2015.
Id. at 33:21 – 34:21.
Before Pazianas left he asked his daughter to check on the Property, but in December she
informed him that she had not yet been and could not go because she was pregnant. Id. at 41:3 –
42:16. Although Pazianas knew his daughter was not checking on the Property and would not be
able to, he did not ask his neighbors or anyone else to check on it. Id. at 38:3-17, 43:9-17. Even
after Pazianas realized he would not be returning to the Property in December, he did not arrange
for anyone to check on the Property. Id. at 40:4-21.
When Pazianas returned to the Property on February 5, 2015, the heat was off, the
thermostat screen was blank, and water was flowing from the ceilings in the laundry and living
rooms. Id. at 47:4-34, 52:4-9. After Pazianas replaced the batteries in the thermostat, it turned
back on. Id. at 52:10-13, 55:16-25. Pazianas’s plumber told him that the water damage was
caused by pipes freezing in the garage and living room and then bursting. Id. at 51:17-24, 52:2-3.
According to Allstate’s independent forensic engineering report, the multiple bursting of
several pipes in the Property could only have been caused by freezing. Engineering Report
issued by Fredric M. Blum, Forensic Mechanical Engineer, Paul Zamrowski Associates, Inc.
(May 7, 2015) at 1. The Property has a gas-fired warm air furnace controlled by a batterypowered digital thermostat. Id. The monthly gas bills indicated that no gas was used in the
spring, summer, and fall of 2014, and monthly gas usage only rose to a very low level beginning
in October of 2014. Id. at 2. The gas bills for November, December, and January show even less
usage than October, and, if the heating system had been operating, monthly consumption would
have risen with the decreasing temperatures. Id. Based on the utility data the engineering report
concluded that the Property was unoccupied during the winter and that either the thermostat was
set so low that only a slight amount of gas was used during the coldest months or the furnace
used no gas and the minimal gas usage was caused by another appliance or lost through a leak.
Id. The report concluded that the pipes had frozen and burst because the thermostat was either
inoperative or set too low. Id. at 3.
A supplemental engineering report confirmed that without battery power the thermostat
could not turn the heating system on. Supplemental Engineering Report issued by Fredric M.
Blum, Forensic Mechanical Engineer, Paul Zamrowski Associates, Inc. (Nov. 9, 2015) at 1. This
report confirmed that, before departing for England, Pazianas did not (1) winterize the house by
closing the main water valve and draining the pipes, (2) have a low-temperature sensor added to
the house alarm system, or (3) replace the thermostat batteries. Id. at 2. Water bills for the
Property indicated that there was no water usage in November and December of 2014, but the
January 22, 2015 bill showed that 103,800 gallons of water was used and the February 23, 2015
bill showed 164,000 gallons of water was used -- despite Pazianas turning off the water on
February 5. Id. The supplemental report concluded, based on daily weather records and in light
of the water bills, that the thermostat batteries probably failed between January 6th and 8th, the
pipes froze a day after the batteries failed, and then the pipes thawed and burst between January
12th and 14th. Id. at 3-4. A second supplemental engineering report based on Pazianas’s more
comprehensive gas and electric usage records came to no new conclusions. Second Supplemental
Engineering Report issued by Fredric M. Blum, Forensic Mechanical Engineer, Paul Zamrowski
Associates, Inc. (Nov. 17, 2015) at 1-2.
Allstate denied Pazianas’s request for coverage because its investigation concluded that
Pazianas had failed to use reasonable care to maintain heat in the Property and therefore the loss
was excluded under his policy. Letter from Michael Cybularz, Allstate Insurance Company, to
Property Adjustment Corporation (Dec. 30, 2015) at unnumbered p. 2.
Allstate argues that it is entitled to judgment on the pleadings because Pazianas did not
use reasonable care to maintain heat in the Property while it was unoccupied during his trip to
England. Allstate Mot. at ¶ 59. Pazianas responds that (1) there are genuine issues of material
fact to resolve at trial based on oral testimony that is subject to a credibility determination, and
(2) he exercised reasonable care by setting the thermostat at 55 degrees before he left for
England, affirmatively asking his daughter to routinely check on the Property, and intending only
to be gone for two months. Pazianas Resp. Mem. at unnumbered pp. 1-2.
In an insurance coverage dispute, the insured bears the initial burden of making a prima
facie showing that a claim falls within the policy’s grant of coverage. State Farm Fire & Cas. Co.
v. Estate of Mehlman, 589 F.3d 105, 111 (3d Cir. 2009). If the insured meets that burden, then
the insurer bears the burden of demonstrating that a policy exclusion excuses it from providing
Where 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). We give clear and
unambiguous terms their plain and ordinary meaning. Northbrook Ins. Co. v. Kuljian Corp., 690
F.2d 368, 372 (3d Cir. 1982).
Pazianas’s policy with Allstate excluded coverage for losses caused by
Freezing of plumbing, fire protective sprinkler systems, heating or
air conditioning systems or household appliances, or discharge,
leakage or overflow from within the systems or appliances caused
by freezing, while the building structure is vacant, unoccupied or
being constructed unless you have used reasonable care to:
a) maintain heat in the building structure; or
b) shut off the water supply and drain the system and appliances.
Allstate Ans. Ex. A at 9.
The material facts are undisputed. The Property was unoccupied from October of 2014
through February 5, 2015. Before Pazianas left for England, he set the thermostat to 55 degrees
and noted no problems with either the thermostat or heat, but he did not change the batteries in
the thermostat even though the manual directed that the batteries be changed every year and
before departing for more than a month. Pazianas did not shut off the water supply to the house
or drain the appliances before leaving. Pazianas asked his daughter to check on the Property
monthly beginning in October of 2014, but he learned in December of 2014 that she had not been
to the Property and would not be able to check on it. Pazianas made no alternate arrangements to
have anyone else check on the Property. Although at one point he intended to return to the
Property in December of 2014, Pazianas did not return until February 5, 2015, whereupon he
discovered that several pipes had burst, water was flowing freely from the ceiling, and the
thermostat was off. Based on Pazianas’s account, the Property’s utility bills, and weather data, a
forensic engineer concluded that after the thermostat’s batteries had failed, there was no heat in
the Property because the thermostat controlled the gas furnace. Without any heat in the Property,
several pipes froze and then burst in January of 2015.
Pazianas admits, and it is not disputed, that the Property was unoccupied and that he did
not shut off the water supply and drain the appliances before departing. See also Kinneer v.
Southwestern Mut. Fire Ass’n, 185 A. 194, 195 (Pa. 1936) (explaining the definition of
unoccupied with respect to dwelling houses in Pennsylvania). We therefore need only consider
whether Pazianas, within the meaning of his insurance policy with Allstate, used reasonable care
to maintain heat in the Property while it was vacant during his trip to England. Allstate argues
that Pazianas did not exercise reasonable care because he failed to change the batteries in his
thermostat before leaving for England and the failed thermostat led to the pipes freezing and then
bursting. Allstate Mot. at ¶ 59. Pazianas responds that he exercised reasonable care by setting the
thermostat before he left, asking his daughter to inspect the Property every month, and intending
to return in December or early January to inspect the Property himself. Pl.’s Resp. at
unnumbered pp. 4-5.
In Pennsylvania, reasonableness is an objective standard reflecting the degree of care a
person of ordinary intelligence and prudence would commonly exercise under similar
circumstances. Maternia v. Pennsylvania R.R. Co., 56 A.2d 233, 235 (Pa. 1948). When an
insurance policy imposes a duty upon an insured to maintain heat in a property, the insured
cannot delegate that duty to another by agreement with a third person. Dougherty v. Allstate
Prop. & Cas. Ins. Co., -- F. Supp. 3d --, 2016 WL 2593848, *9 (E.D. Pa. 2016) (citing Husak v.
Berkel, Inc., 341 A.2d 174, 179 (Pa. Super. Ct. 1975)).
There is a genuine issue of material fact only when there is sufficient evidence such that a
reasonable juror could find for the party opposing the motion. Anderson, 477 U.S. at 251-52
(explaining that a mere scintilla of evidence is insufficient). Even accepting Pazianas’s
allegations as true and granting him the benefit of all reasonable inferences, the undisputed
material facts demonstrate that Pazianas (1) left the Property vacant for several months in the fall
and winter, (2) made no provision for having the Property inspected during his trip to England
after he learned that his daughter would be unable to inspect the Property, (3) took no steps to
ensure that the battery-operated thermostat would continue to operate for the duration of his
extended absence, and (4) did not shut off the water to the Property or drain the appliances. Even
accepting as true Pazianas’s averments that he asked his daughter to inspect the Property in
October, set the thermostat before departing, and did not intend to be away for more than two
months, no reasonable juror could find that Pazianas used reasonable care to maintain heat in the
Property during its vacancy. Further, although Pazianas states in a conclusory fashion that there
are genuine issues of material fact to resolve at trial based upon oral testimony that is subject to a
credibility determination, he does not indicate what these issues are, and the Court’s decision
requires no credibility determination or weighing of the evidence in light of the undisputed facts.
We will grant Allstate’s motion for judgment on the pleadings, which we have considered
as a motion for summary judgment, because in light of the undisputed material facts no
reasonable juror could find that Pazianas used reasonable care to maintain heat in the Property
while it was vacant during his absence. An appropriate Order follows.
BY THE COURT:
__/s/ Stewart Dalzell, J.
Stewart Dalzell, J.
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