Bruno v. Nationwide Mutual Fire Insurance Company

Filing 22

MEMORANDUM (Order to follow as separate docket entry) For the reasons cited in the foregoing Memorandum, Defendant Nationwide ' s Motion for Summary Judgment (Doc. 12 ) will be granted.An Order consistent with this determination will be filedcontemporaneously herewith. BY THE COURTSigned by Honorable Richard P. Conaboy on 11/9/15. (cc)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
Joan Bruno
PIa

iff

v.

Case No. 3:14-CV-2140

Nationwide Mutual Fire
nsurance Company
(Judge Richard P. Conaboy)
Defendant.

Memorandum

We consider here Defendant Nationwi

Mutual

re Insurance

Company's Motion for Summary Judgement (Doc. 12).
been fully brief

I.

s

(Doc. 14, 17, and 19) by the parties and is now

ripe for disposition.
ot

The motion

For the reasons

t follow,

Defendant's

will be granted.
Factual Background.

1

This case arises from a fire that occurred on January 9, 2013.
The fire caused extensive damage to a six-unit rental property
owned by Plaintiff Joan Bruno and her husband in Bushkill, Lehman
Townsh

,Pennsylvania.

(Doc. 12,

~

1; Doc. 15,

~

1).

fire occurred, Plaintiff notified Defendant of
her claims under her insurance contract

On the day
fire

of

th Nationwide, more

specifically, Nationwide Policy No. 5837DP848634(here

fter the

Items presented as facts are derived from Plaintiffs Complaint (Doc. 1-2), Defendant's
nswer (Doc. 11), Defendant's Motion for Summary Judgment (Doc. 12), and Plaintiffs Answer to
Defendant's Motion for Summary Judgment (Doc. 15).
I

1

(Doc. 1-2,

"Policy/l) .
4).

5; Doc. 11,

5; Doc. 12,

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s made payments under the

Nationwide

$311,947.60

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(Doc. 12,

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5; Doc. 15,

5).

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4; Doc. 15,

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icy totaling
Plaintiff has been fully

all of the actual fire damage to the structure in the

paid

amount of $192,494.73.

(Doc. 12,

Doc. 15,

6;

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6).2

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Plaintiff

has also been paid the full amount of contents covera
($15,000.00) available under the Poli
lost rent

($71,630.00), and

($29,060.17) with laws
ng house.

the

, the value of 12.5 months

sed costs of compliance
ordinances regulating re-construction of

(Doc. 12,

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7; Doc.

15,

Despite acknowledging receipt of the a
from Nationwide,
Nationwide has pa

7).

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rementioned

yments

Plaintiff claims lost rent above and beyond what
and the "total loss" of value for the subject

roperty and an adjacent complex of rental properties caus

by

with the land on which the rental property sits and its
ed sewage s
With re

em.

(Doc. 12,

<J[

9).

for lost rent,

the

11 be for the shortest time required to
Described Location rented or

ir or replace that part of
held for rental./l

9; Doc. 15,

's covera

ct to the Pol

Policy states: "Payment

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(Doc. 12,

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10; Doc. 15,

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10).

While Plaintiff

admits that Nationwide paid the full value of her lost rent for
has halt

12.5 months and acknowledges that

repair efforts

While Plaintiff admits that "the fire damage estimate was accurate if the structure could be
epaired", she contends that the estimate is "inaccurate since the structure is a total loss." (Doc. 15, '!I
6). Plaintiffs reasoning for making this distinction will be discussed below.
2

2

to a lack of a municipal permit to install a new sewage di

sal

system, she contends that she is entitled to additional lost rent
ed her efforts

since she has te

to her perception

permitting process will be lengthy and costly.

t

(Doc. 15, <J[<J[ 12

15) .
In addition to the amounts already received from Nationwide to
reconstruct the rooming house,

Plaintiff also seeks an additional

payment for the loss of value of the
rmitting process

construction of a new septic system

onerous or expens
prevented the
16 17; Doc. 15,

house because t

because problems

16 17).

disclosed, inter alia, that:
property was last

Discovery

tted and installed

ed by the parties

rty in 2002;

1977;

(2) plaintiff

the 1990' s;

Township) began

violations at the

(Doc. 12, <J[<J[

(1) the septic system at the subject

and her husband bought the subject
unicipality (

too

the land itself

allation of a new septic s
<J[<J[

lS

(3) t

ating possible sewa
(4)

aintiff hired an

engineering firm in 2002 to evaluate alternatives for the
renovation of the sewa

disposal system but problems arose because

of the limited plot of land available for onsite sewage disposal;
and (5) in December of 2002, Plaintiff proposed combining the
subject property
abandoned that plan.

an adjacent parcel she owned but later
(Doc. 12, <J[<J[ 18-19; Doc. 15,

Discovery conducted by the parties also

3

<J[<J[

18-19).

cates that the fire was

confined to the upper story of the rooming house and did not reach
the septic tank, which is located 70-80 feet from the rooming
house.

(Doc. 12,

<J[<J[

21; Doc. 15,

<J[

21) .

None of the experts

retained to assess the conditions of the subject property
(including a septic inspection company, an engineer, a septic
design company, an architect, a soil scientist, and a sewage
enforcement consultant) opined that the septic system was damaged
by the fire.

(Doc. 12,

<J[

22; Doc. 15,

<J[

22).

Ed Bland, the Lehman Township sewage enforcement officer,
determined that there was no area on the subject property
sufficient to support a septic system that could handle the needs
of a six-unit structure.

(Doc. 12,

<J[

25; Doc. 15,

<J[

25).

Due to

Mr. Bland's conclusions in this regard, the Plaintiff elected to
join the subject property to an adjacent property that she and her
husband owned in order to facilitate installation of a new septic
system on the adjacent property which would service the damaged
six-unit property.

(Doc. 12,

<J[

26; Doc. 15,

<J[

26).

Plaintiff later

grew concerned over the prospect of gaining the necessary permits
to install the new septic system when she was advised that the
process could take years and require substantial expense.
15,

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27).3

(Doc.

At this point, Plaintiff contended that the fire had

caused a total loss of the six-unit structure due to the

3 The permitting process was to be supervised by the Pennsylvania Department of
Environmental Protection because the Lehman Township sewage enforcement officer was not
licensed to issue a permit for the type of new system Plaintiff required.

4

problems in

aforement

rmitting and installing a new septic
Lehman Township."

system that "were created
PIa

(Doc. 15,

<j[

28).

iff also contends, that because Nationwide recommended

Stellar Construction Company ("Stellar") to

form the work

necessary to repair the

structure, and because Nationwide

offered to waive the deduct

on the Policy if Plaintiff used

Stellar, Stel

iff's premises.

rformed at PIa

the work
Doc. 15,

as Nationwide's agent with re

r funct

<j[<j[

liable

36-37).

(Doc. 12,

to
36-37;

<j[<j[

This, Plaintiff reasoned, makes Nationwide

allegedly shoddy work perfo

renovation

the six-unit structure.

and Stellar

scussed

by Stellar dur
(Doc. 1-2 at

<j[

the
Plaintiff

).

scope of the work to be per
Plaintiff aut

executed a contract whe

and

rized Stellar to perform

repair work on the damaged property and retain necessary permits.
(Doc. 12,

<j[

44; Doc. 15,

<j[

44).

Plaintiff acknowledges that

ationwide did not directly perform any work on the
structure and that she was unaware of any communication between
Nationwide and Stellar

ng the

Plaintiff acknowledges also that all s
supervis

ir work.

(Id. ) .

ractors were retained,

and paid by Stellar and that Nationwide was not

involved in the effort to secure permits, the design and
implementation of any work on the sept

system, nor in the

decision to merge and later subdivide the parcel contai
amaged s

rental structure with t

5

ng the

adjacent parcel

Plaintiff owned .
II.

(Id . ) .

Summary Judgment Standard.

Summary j udgment is appropriate " i f the movant shows t h at
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) .

disputed fact is "material" if it could affect the outcome of the
suit , given the applicable substantive l aw .

Anderson v . Liberty

Lobby , Inc ., 477 u . S . 242 , 248 , 106 S . Ct . 2505 , 91 L . Ed.2d . 202

(1986) .

A dispute about a material fact is "genuine" if the

evidence presented "is such that a reasonable jury could return a
verdict for the nonmov i ng party ."

Id .

In eva l uat i ng a summary judgment motion , a court "must v i ew
the facts in the ligh t most favorable to the non-moving party ," and
ake every reasonable i nference in that party ' s favor , Hugh v .
Butler Cnty . Family YMCA , 4 1 8 F.3d 265 , 267

(3d Cir.2005) .

Nonetheless , the party opposing summary judgment must support each
esse nti al e l e ment o f th e c l a i m with concrete evidence i n the
record .

Celotex Corp . V . Catrett , 477 u . S . 317 , 322 - 23 ,

(1986)

This requirement upho l ds the underlying purpose o f the rule , which
is to avoid a trial "in cases where it is unnecessary and would
only cause delay and expense . "
F. 2d 566 , 573 (3d Ci r .1 976) .

Goodman v . Mead Johnson & Co. , 534

Therefore , if , after mak i ng a l l

reasonable in f erences in favor of the non-moving party , the court
determines that there is no genuine issue of material fact , summary

6

judgment is appropriate.

Celotex, supra, at 322; Wisnieweski v.

-Manville Corp., 812 F.2d 81, 83 (3d Cir.1987).

If the non

ovant's evidence is merely speculative, conclusory, "or is not
cantly probative, summary judgment may be granted./I

An

on, supra, at 249 50 (internal citation omitted) .
A plaintiff's mere belief is not enough to create a dispute of
al fact sufficient to survive summa

on Ins. Co. V. W. Pa. Hasp.,

n

423 F.

r.
n

t

for the non-moving

y must rebut the motion with facts in

and cannot rest s

lyon assertions

1 memoranda, or oral argument."

Col

318, 333 (3d

Our circuit has stated: " ... summary

judgment is essentially 'put up or shut up'
the non-moving

See

ion is not sufficient to defeat a mot

2005) (holding that
for summary judgment).

judgment.

in the pleadings,
ey Inv. Grp., Ltd. V.

tt, 455 F.3d 195, 201 (3d Cir.2006).

III. Discussion.
Plaintiff's complaint seeks damages for breach of contract
I) without specifical

referencing the

on or sections

contract that
nt also sought
the al

legedly been b

Plaintiff's

s for negligence (Count II) based upon

tion that Nationwide allegedly recommended Stellar

Construction Company to Pla

iff as being competent to perform

needed repairs and obtain necessary permits to

r the subject

rty when Nationwide knew or should have known that Stellar was
7

Nationwide's alleged

complaint alleges, in conclusory fashion,

its alleged

a

of its insurance contract with

iff's

a

not competent to perform those services.

negligence in recommending Stellar Construct
bad faith (Count III) on Nationwide's part.

Company constitute
On

Count I
Defendant's

of Contract - - survives due to
Motion to Dismiss Counts I I and I I I was unoppos

by Plaintiff and

those counts were subsequently extinguished by

s Court's Order

of January 26, 2015.
A.

(Doc. 10)

Breach of Contract.

ions,

Pursuant to its breach of contract all

Plaintiff

seeks additional payment from Nationwide to cover the "total loss"
of the subject property and the va

of additi

the amount of $298,700.00 after allowing
Policy deductible and the mortgage pay-

t rent in

f.

(Doc. 1-2,

examination of the Policy reveals that various sect
interpreted in order to assess the val

ust

the

r set-of

y of

~

25).

An

thereof
aintiff's

cla
With respect to Plaintiff's claim that she is entitled to
recover

the "total loss" of the property, the Court has
ly reviewed the Policy for language bearing on this point.
to the structure itself is specified on the Declarat

in "Coverage A-Dwelling" which provides "Physical

Coverage" to the structure in question up to a liability 1

8

t

of

$362,500.00 subject to a $2,500.00 deductible.
5).

4

(Doc. 13-17 at

Coverage A, in pertinent part, insures: "the dwelling on the

prescribed location shown in the Declarations, used principally for
dwelling purposes,
(Doc.

13-17 at 7).

including structures attached to the dwelling."
However, Coverage A "does not apply to land,

including land on which the dwelling is located."

(Id. )

In the

section of the Policy entitled "Perils Insured Against", the Policy
specifies "we insure for direct physical loss to the property
covered caused by a peril listed below unless the loss is included
in the General Exclusions."

(Doc. 13-17 at 10).

Among the "Perils

Listed Below", the Policy lists "Fire or Lightning".
clear that the fire damage to the six-unit dwelling

It is thus
5

is covered in

the Policy up to the maximum amount of $362,500.00.
Having identified the applicable sections of the Policy and
the applicable limits of coverage here, we now examine Plaintiff's
claim that the building is a total loss that requires Nationwide to
remit additional sums defined as the difference between what
Nationwide has paid to date and the actual value of the property as
well as an additional sum for lost rent over and above that already

4 Plaintiff asserts that Nationwide waived the deductible as an inducement to Plaintiff to use
ationwide's preferred repair firm, Stellar. (Doc. 16, ,-r 15).

The Court does observe, however, that the risk Nationwide undertook was damage to a

"three family dwelling." See Doc. 13-17 at 5. This discrepancy between the description of the

roperty Nationwide insured and the property for which Plaintiff seeks to recover has not been

eferenced in Nationwide's filings.
5

9

Plaintiff's various st

by Nationwide.

ions and

acknowledgments of record defeat her own claim.
~

Plaintiff contends (see Doc. 17 at 3 4; Doc. 15,

9 and Doc.

7 at 2) that work was eventually halted on the reconstruction of
ng and s

the six-unit dwelling due to
Township.

issues w

Unfortunately for Plaintiff, and fatal to
the necessary permits to comp

problems obtain

Lehman

r claim, her
the renovation

Is Insured Against" under

as she would prefer are not "

Policy. In fact, the Policy specifically and clearly provides in
its "General Exclusions" that:

We do not insure for loss caused directly or
by any of the following.
ss of any ot
concurrently or
1.

rectly

loss is excluded
cause or event contributing

any sequence to the loss.

Ordinances or Law, meaning enforcement of any

ordinance or law

lating the use, construction,

repair, or demolition of a bui
unless

or other structure

fically provided under this policy.

(Doc. 13 17 at 11).

The clear mean

6

of this exclusion is that

Plaintiff may not recover the cost of bringing

property to code

6 The Policy contains no specific provision to the contrary. Thus, additional expense caused
. y an insured's effort to comply with local ordinance or state laws are not reimbursable under the
Ipolicy.

10

or obtaining permits from a municipality.
The major thrust of Plaintiff's allegations against Nationwide
is that she should be compensated for the total loss of her six­
unit rental property, which is now presumably worth less since it
can no longer generate rents due to her inability to obtain
permits.

While Plaintiff does suggest that the fire suppression

effort may have damaged the septic system (Deposition of Lewis
Bruno, Doc. 16 at 21), this suggestion based upon hearsay from
unidentified parties is not competent evidence and is insufficient
to create a material issue of fact here. See Lexington Insurance
Company, supra.

What Plaintiff fails to appreciate is that, by her

own admissions, the reason the property is not currently useful for
her intended purposes - - the fact that she has not obtained the
is not within the covered perils Nationwide

necessary permits

insured under the Policy.
Plaintiff specifically averred in her complaint that she "has
suffered a total loss of the six-unit rental structure which cannot
be rebuilt due to issues involving the land itself, and the
ermittin
supplied) (Doc. 1-2,

(emphasis
<j[

23).

This acknowledgment that zoning and

permitting issues are the reason for the alleged "total loss" of
the property is reiterated in Plaintiff's version of the issues in
the Joint Case Management Plan submitted by the parties.

Therein,

Plaintiff states: "on the recommendation of Nationwide, Plaintiff

11

eanup and

contracted AG Stellar Co., Inc., to commence
construction.

Unfortunately, work was eventually halted on

reconstruction of the rental units due to zoning and sewage issues
Lehman Townshi ." (emphasis supplied)
cknowledgments cl

(Doc. 7 at 1-2).

y establish that the

Plaintiff see

of contract claim flow

pursuant to her

These

her inability or

unwillingness to obtain the necessary permits to continue using t
se

damaged structure as a rental property.
zoning authorizations and sewage permit
covered perils under

fficulties with
cess are simply not

Policy and, for that reason, Plaintiff's

claim that she is entitl

to recover for a "total loss" of the

property must fail.
B.

Agency.

7

Plaintiff cIa

t

action against Nationwi
theory attempts to ho

self-same damages sought In her contract
on a negligence t
Nationwide respons

This negligence
Ie

r allegedly shoddy

work and poor advice received from Stellar, who Plaintiff attempts
to characterize as Nationwide's agent.
Stellar should be

PIa

iff contends that

as an agent of Nationwide due to

We note that Plaintiff's negligence claim was dismissed by Order of January 26, 2015 (Doc.
10). The only reason Stellar's alleged role as Nationwide's agent would be relevant here would be in
he context of a negligence claim. The Court is at a loss as to why the parties continued to brief this
oot issue. Nevertheless, we shall briefly address the substance of this claim since the parties have
ersisted in arguing about it.
7

12

Nationwide's alleged recommendation of Stellar and Nationwide's
alleged inducement of a waived deductible if PI
ith Stellar.

Even ass

iff contracted

ng the veracity of these allegations,

r acceptance as truth would not transform Stellar into

Nationwide's agent

Pennsylvania law.

As Plaintiff hers

f acknowledges

elements of agency are three:
the principal that the

(Doc. 17 at 7), the basic

(1) that there is a manifestation by
shall work for it;

(2) that the agent

to accept that role; and (3) that there be an understanding
that the principal be

control of the work.

Scott v. Purcell,

415 A.2d 56, 60 (Pa. 1980).

There is no

of record that

Stellar fits all three a

s of the conjunct

test articulat

in Scott, supra.

Quite to the contrary, t

only evidence

sented to this Court on the critical question whether Nationwi
controlled Stellar's work establishes that t
The Court has been

s was not the case.

shed with the deposit

Stellar, President of Stellar.

of Anthony

Mr. Stellar testi

ed unequivocal

that Stellar was not a subsidiary of Nat

nor did it work

under Nationwide's direction in its remediat

efforts pursuant to

its (Stellar's) contract with the Plaintiff and
13 13 at 9-16).
acknowledged:

r husband.

(Doc.

Complementing this evidence, Plaintiff has

(1) that Nationwide and Stellar had no communication

regarding the repair work;
on the project were reta

(2) that all workers and subcontractors
, paid, and supe

13

sed by Stellar; and

(3) that Nationwide was not in v olved in the effort to secure
permits nor in the design or implementation of any work on the
project .

See page five ante.

These acknowledgments are fatal to

Plaintiff ' s attempt to characterize Stellar as Nationwide ' s agent .
In the absen c e of such an agen c y relationship, Nationwide cannot be
liable to Plaintiff for any malfeasance by Stellar as a matter of
law.
IV. Conclusion.

For the reasons cited in the foregoing Memorandum,
ationwide ' s Motion for Summary Judgment

(Doc.

Defendant

12 ) will be granted.

n Order consistent with this determination will be filed
contemporaneous l y herewith.
BY THE COURT
Honorable Ri c hard P. Cona
United States District Co

j "(..- c,(" ( J
Dated : ----------------------------FILED
SCRANTO
NOV 0 9 2015
:lER

en
DEPUTY CLERK

14