WEHRENBERG v. METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY

Filing 103

OPINION. Signed by Judge Mark R. Hornak on 1/10/17. (bdb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
EDWARD WEHRENBERG,
Plaintiff,
V.

METROPOLITAN PROPERTY AND
CASUALTY INSURANCE COMPANY,
Defendant.

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2:14-cv-01477
Judge Mark R. Hornak

OPINION
Mark R. Hornak, United States District Judge
This is the third Opinion in Plaintiffs insurance coverage case. Plaintiffs Amended
Complaint, ECF No. 37, contains two counts: one for breach of contract and one for bad faith
denial of insurance coverage. Previously, the Court denied Plaintiffs Motion for Joinder of an
Additional Defendant, ECF No. 35, Wehrenberg v. Metro. Prop. & Cas. Ins. Co., No. 2:14-CV01477, 2015 WL 1643043 (W.D. Pa. Apr. 9, 2015), and Defendant's Motion to Dismiss, ECF
No. 57, Wehrenberg v. Metro. Prop. & Cas. Ins. Co., No. 2: 14-CV-01477, 2015 WL 4716305
(W.D. Pa. Aug. 7, 2015). Now pending before the Court is Defendant's Motion for Summary
Judgment, ECF l\Jo. 81. For the reasons which follow, Defendant's Motion is granted as to both
Counts I and II, and summary judgment is entered in favor of the Defendant.
I.

BACKGROUND
The Court has twice before recounted the facts in this case. In summary, they are as

follows:
Wehrenberg owned a house located at 226 Sheryl Lane, Pittsburgh, Pa 15221
("226 Sheryl Lane"), which was insured by a homeowners insurance policy issued
by Metropolitan. 226 Sheryl Lane was subject to a mortgage held by Wells Fargo.
In October 2011, Wehrenberg leased 226 Sheryl Lane to Alphonso Hyman. Under

I",

the agreement, Hyman was to lease 226 Sheryl Lane for five years starting in
November, 2011, and Hyman was to pay each month's rent directly to the
mortgage company. An option in the lease gave Hyman the right to purchase 226
Sheryl Lane by doing this.
In early 2012, Hyman stopped making his monthly rent payments, and around
June 2012 Wehrenberg received notice from the mortgage company that
foreclosure proceedings had begun. Wehrenberg called and emailed Hyman
unsuccessfully and so he visited 226 Sheryl Lane around June 24, 2012, where he
found that the locks had been changed. Wehrenberg looked through the windows
and saw that "in essence, the place was gutted done [sic ] to the bare studs."
Wehrenberg was then able to get ahold of Hyman on the-phone (the next day) and
told him that he (Hyman) did not have permission to gut the house or to do any
work on 226 Sheryl Lane and that the property had been damaged. Hyman
responded that he was a contractor, that the house had major structural problems
that he had decided to fix and which required him to gut the house, and that he
would put the house back together.
Wehrenberg did not notify Metropolitan of this turn of events, but instead he
allowed Hyman to continue his "work" on the property. Wehrenberg told Hyman
to get the mortgage caught up and to get the house put back together as soon as
possible, which Hyman did. In January 2013, Wehrenberg noticed that a rental
payment was late and called Hyman, who assured Wehrenberg that payment
would be made by January 15, 2013 and that the house was coming along. But
Hyman never made the payment. Wehrenberg called Hyman again but found that
the phone was disconnected, so Wehrenberg went to 226 Sheryl Lane and found
not only that the first floor was in the same disassembled condition but that the
basement and second floor had been gutted also. Three bathrooms, flooring,
bedroom walls, closets, furnaces, and air conditioner had all been removed. The
furnaces and air conditioners had, however, been replaced.
On February 28, 2013, Wehrenberg filed a claim with Metropolitan, asserting that
the property had been vandalized. Wehrenberg says that the Metropolitan adjuster
came out to take pictures of the damages and "threatened to leave the premises"
almost immediately, told Wehrenberg that Metropolitan would not cover the
claim, and was "short" with him (Wehrenberg). After that, Wehrenberg says he
called Metropolitan regarding his claim but was "pushed from agent to agent and
many times his phone calls were not returned." Wehrenberg eventually lost the
house to foreclosure (though no foreclosure date was included in either the
Complaint or the Amended Complaint). Metropolitan has never made an offer of
settlement under the policy.
Wehrenberg v. Afetro. Prop. & Cas. Ins. Co., No. 2:14-CV-01477, 2015 WL 4716305, at *1-2

(W .D. Pa. Aug. 7, 2015) (internal citations and alterations omitted).

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I

'"J

On May 20, 2016, Defendant filed a Motion for Summary Judgment. The Court has
considered all of the parties' papers and held oral argument on the Motion on August 30, 2016.
II.

STANDARD OF REVIEW

Under Federal Rule of Civil Procedure 56(a), summary judgment is proper "ifthe 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." Fed. R. Civ. P. 56(a). Furthermore, to evaluate a motion for
summary judgment, the Court must "view[] the

eviden~e

in the light most favorable to the

nonmoving party and draw[] all inferences in favor of that party." Schock v. Baker, No. 16-1678,
2016 WL 6276048, at *2 (3d Cir. Oct. 27, 2016) (citing Kaucher v. Co.unty of Bucks, 455 F.3d
418, 422-23 (3d Cir. 2006)). Under Rule 56, an issue is "genuine" when "the evidence is such
that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). The Court may
consider all of the materials in the record, Fed. R. Civ. P. 56(c)(3), including "depositions,
documents, electronically stored information, affidavits or declarations, stipulations (including
those made for purposes of the motion only), admissions, interrogatory answers, or other
materials." Fed. R. Civ. P. 56(c)(l)(A).

III.

DISCUSSION

A.

Breach of Contract

In this case, both parties agree that Pennsylvania law applies. ECF No. 82 at 6; ECF No.

88 at 2. "In Pennsylvania, the insured bears the burden of proving facts that bring its claim
within the policy's affirmative grant of coverage." Koppers Co. v. Aetna Cas. & Sur. Co., 98
F.3d 1440, 1446 (3d Cir.1996). However, "the insurer bears the burden of proving the
applicability of any exclusions or limitations on coverage, since disclaiming coverage on the

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basis of an exclusion is an affirmative defense." Id. Additionally, as the Court explained in its
second Opinion in this case, the Third Circuit has stated:
The interpretation of an insurance contract is a question of law that is properly
decided by the court. Standard Venetian Blind Co. v. American Empire Ins. Co.,
503 Pa. 300, 469 A.2d 563, 566 (Pa.1983). In determining whether a contract is
ambiguous, the court must examine the questionable term or language in the
context of the entire policy and decide whether the contract is "reasonably
susceptible of different constructions and capable of being understood in more
than one sense." Gamble Farm Inn, Inc. v. Selective Ins. Co., 440 Pa.Super. 501,
656 A.2d 142, 143-44 (Pa.Super.Ct.1995) (quoting Hutchison v. Sunbeam Coal
Corp., 513 Pa. 192, 519 A.2d 385, 390 (Pa.1986)). Where a provision of a policy
is ambiguous, the provision should be construed in favor of the insured and
against the insurer, the drafter of the agreement. Standard Venetian Blind, 469
A.2d at 566. If, however, the terms of the policy are clear and unambiguous, the
general rule in Pennsylvania is to give effect to the plain language of the
agreement. Bensalem Tp. v. International Surplus Lines Ins. Co., 38 F.3d 1303,
1309 (3d Cir.1994). Reliance Ins. Co. v. Moessner, 121 F.3d 895, 900-01 (3d
Cir.1997), as amended (Aug. 28, 1997).
Wehrenberg, 2015 WL 4716305 at *3.

The insurance policy ("Policy") that the Court will be examining in this case includes the
following relevant provisions:
THE POLICY

CAUSES OF PROPERTY LOSS
SECTION I -LOSSES WE COVER
(Special Perils)
****************
COVERAGE A - DWELLING AND COVERAGE B - PRIVATE
STRUCTURES
We will pay for sudden and accidental direct physical loss or damage to the property described in
Coverages A and B, except as excluded in SECTION I - LOSSES WE DO NOT COVER.

****************
SECTION I - BROAD NAMED PERILS
Whenever Broad Named Perils is referred to in this policy, the following causes of loss will apply for
sudden and accidental direct physical loss.

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.

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Under the names perils below, we do not cover loss or damage, no matter how caused, to the property
which results directly or indirectly from fungus and mold. There is no coverage for loss which, in whole
or in part, arises of, is aggravated by, contributed to by acts or omissions of persons, or results from fungus
and mold. This exclusion applies regardless of whether fungus and mold arises from any other cause of
loss, includ',ng, but not limited to a loss involving water, water damage or discharge, which may be
otherwise covered by this policy, except as granted under SECTION I - ADDITIONAL COVERAGES
for Fungus and Mold Remediation.

****************
8.
Vandalism or Malicious Mischief
We do not pay for any loss caused by any act committed in the course of the vandalism or malicious
mischief including any ensuing loss or fire if the residence was vacant for more than 30 consecutive days
immediately prior to the loss. A residential premises being constructed is not considered vacant.

****************
SECTION I - LOSSES WE DO NOT COVER

****************
2.

We do not insure under any coverage for any loss consisting of one or more of the items below.
However, we pay for any ensuing loss unless the ensuing loss is itself excluded by any other
provision in this policy. Further, we do not insure for loss describedinExclusionl.above and
Exclusion 3. below regardless of whether one or more of the items below( a) directly or indirectly
cause, contribute to or aggravate the loss; or (b) occur before, at the same time, or after the loss or
any other cause of the loss. The items are:

A. conduct, act, failure to act, or decision of any person, group, organization or governmental
body whether intentional, wrongful, negligent or without fault;
B. defective, inadequate, faulty or unsound:
1. planning, zoning, development, surveying, siting;
2. design, specifications, workmanship, repair, construction, renovation, remodeling,
grading, compaction;
3. materials used in repair, construction, renovation or remodeling; or
4. maintenance;
·
of any property whether on or off the residence premises. Property includes land,
structures or improvements of any kind; and
C. weather conditions.

ECF No. 43, at 7-8; ECF No. 37-1, at 18-19, 21-22 (emphasis in original).
Here, Defendant claims that there is no issue of material fact, and that the Policy has not
been breached as a matter of law for three reasons: (1) Plaintiff cannot establish that the claimed
loss is covered as "sudden and accidental direct physical loss or damage" under the terms of the
involved Policy, (2) even if the loss is covered, Plaintiffs failure to immediately notify
Defendant of the damage prejudiced Defendant and (3) the damages claimed are explicitly

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excluded from coverage under the Policy. The Court will examine each of these arguments in
tum.
First, the Court concludes that Plaintiff cannot, on the record before the Court, meet his
burden of proving that his loss is covered by his Policy in the first instance. The Policy
specifically provides that Defendant will only cover "sudden and accidental direct physical loss
or damage to [Plaintiffs] property." ECF No.37-1 at 18 (emphasis added). Under Pennsylvania
law, "sudden and accidental" "mean[], respectively, 'abrupt' and 'unexpected or unintended."'
US. Fire Ins. Co. v. Kelman Bottles, 538 F. App'x 175, 181 (3d Cir. 2013). Additionally, "the

relevant question is whether the nature of the loss, and not its underlying cause, was 'sudden and
accidental."' Id. In this case, the Court concludes that no reasonable jury could find that
Plaintiffs loss was "sudden." In his uncontradicted deposition testimony, Plaintiff's tenant,
Hyman, explained that his lease began in November 2011, ECF No. 84-2 at 34:17-34:19, and
that by the middle of December 2011, a structural engineer had examined the house. Id. at 44 :244: 5. Hyman further stated that he received the engineer's report by the end of December 2011,
id. at 44:11-44:14, and that "demo was done by January [2012] at the latest." Id. at 59:24-59:25.

From January 2012 to January 2013, Hyman was "actually in the phase of putting the house back
together." Id. at 61:16-61:17; see also id. at 60:11-60:13. Although it is unclear from his
testimony if Hyman waited to begin demolishing the house until he received the engineer's
report, viewing the facts in the light most favorable to Plaintiff, the Court will assume that he did
so wait. Even accounting for such a delay, the demolition would still have taken from the end of
December 2011 until sometime in January 2012-a time span of about a month. No reasonable
jury could find that such "damage," incurred over such a lengthy time period, was "sudden."

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r.

Although Plaintiff's perception of the loss may have been sudden, the nature of it was not.

1

Cf

Capriotti v. Allstate Prop. & Cas. Ins. Co., No. CIV.A. 11-7779, 2012 WL 3887043, at *3 (E.D.

Pa. Sept. 6, 2012) (denying summary judgment because it was possible that a jury could
conclude water damage occurred over the course of one day and was therefore sudden).
Because Plaintiff's Policy states that physical damage is only covered when it is both
"sudden" and "accidental," the Court's conclusion that the damage could not be found to be
"sudden" is enough to preclude coverage in this case. However, even if Plaintiffs loss could be
deemed "sudden," it would still not be covered by the Policy because no reasonable jury could
find that Plaintiff's loss was "accidental," meaning "unexpected or unintended." US. Fire Ins.
Co., 538 F. App'x at 181. First, although Hyman's actions until June 24, 2012 (when Plaintiff

says he first discovered the construction that Hyman had undertaken) may have been
"unexpected" by Plaintiff, 2 they were not "unintended" by Hyman. To the contrary, as evidenced
by the engineer's report that Hyman commissioned, the demolition and construction Hyman
performed was carefully planned. Beyond that, as to any demolition and construction that
Hyman completed after Plaintiff looked through the window of the house in June 2012, such was
not "unexpected" by Plaintiff because he was well aware of it. As he explained in his deposition
testimony, Plaintiff knowingly then gave Hyman the opportunity (if not directive) to restore the
house after he (Plaintiff) discovered the initial damage. ECF No. 84-1 at 24:6-24:13. Thus,

1 The Court notes that its discussion is limited to the demolition that Hyman undertook. However, considering any
further construction work that occurred over even a longer period of time would only bolster the Court's conclusion
that no reasonable jury could find that the damage claimed here was "sudden."

2

In his deposition testimony, Hyman asserts that he "told [Plaintiff] [he] was going to completely renovate the
house after there was structural damage" and that "[Plaintiff] knew all the work that was going to be done." ECF
No. 84-2 at 42: l 9"42:21, 42: 18- 42: 19. Plaintiff, however, denies that he had any knowledge of the demolition
before he arrived at the house on June 24. 2012. ECF No. 84-1 at 21: 17-21:22. The Court must view the evidence in
the light most favorable to Plaintiff, so it will assume that Plaintiff did not have prior knowledge of what Hyman
intended. In any case, the Court notes that such an assumption has no bearing on its conclusion becaus1~ the damage
was not "accidental" regardless of whether Plaintiff was aware of it before June 2012.

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considered together, none of the damage that resulted from any of Hyman's actions was
"accidental." Plaintiffs loss is not covered by his insurance Policy.
Although Defendant's Motion will be granted for the foregoing reasons, the Court will
also consider Defendant's other arguments as to why Plaintiffs loss is not protected by the
Policy. Defendant argues that Plaintiff had a contractual obligation to report his damage to
Defendant and that his failure to do so in June 2012 prejudiced Defendant. The Court agrees that
Plaintiffs Policy requires him to "immediately notify" Defendant of any damage, ECF No. 37-1
at 27, and that he failed to do so. This does not end the Court's inquiry, however, because in
order to deny coverage for a loss that would otherwise be covered, Defendant must show not
only that Plaintiff failed to fulfill his contractual notice duty, but also that Defendant "suffered
prejudice as a consequence." Brakeman v. Potomac Ins. Co., 472 Pa. 66, 72, 371 A.2d 193, 196
(1977).
In this case, determining whether there was prejudice to Defendant would require the
Court to resolve factual issues in dispute and that it cannot do at this stage of the proceedings,
based on the evidence in the record. For example, the Court would have to pinpoint when
specific construction work occurred, such as what, if anything, was done to the house after June
24, 2012, how that work played into the damage claim here, and how the Defendant's position
was actually and materially prejudiced in those regards. Although Hyman discusses the different
phases of construction 'in his deposition testimony, he only speaks broadly about what occurred
between January 2012 and January 2013, ECF No. 84-2 at 60:11-61:23, so such questions are
left unresolved at this point. These questions of material fact cannot be resolved by the Court at
the summary judgment stage. Rather, they would be questions for a jury to resolve at trial. See,

e.g., Nationwide Prop. & Cas. Ins. Co. v. Mattis, No. 12-CV-6130, 2014 WL 1806835, at *3

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(E.D. Pa. May 6, 2014). Therefore, the Court cannot grant Defendant's Motion on the ground
that Defendant was prejudiced by Plaintiffs failure to immediately notify Defendant of his
claimed damages.
Finally, Defendant argues that even if Plaintiffs loss was "sudden and accidental,"
Defendant does not have to pay for it because it is a type of loss that is specifically excluded
from coverage by Plaintiffs Policy. The Policy states that Defendant will not cover losses
caused by "defective, inadequate, faulty or unsound [ ... ] design, specifications, workmanship,
repair, construction, renovation, remodeling, grading, [or] compaction," among other things.
ECF No. 37-1 at 22. Considering the plain and obvious meanings of these words, the Court
concludes that as a matter of law, the work Hyman performed on the house unquestionably falls
into many of these excluded categories, including "repair," "construction," "renovation," and
"remodeling."3 As the record plainly demonstrates, the demolition that Hyman performed is
excluded

because

it

"alter[ed]

the

structure

of'

the

house,

MIRIAM-WEBSTER,

https://www.merriam-webster.com/dictionary/remodel, ECF No. 84-2 at 60: 14-61 :23, and
because it was the first step in Hyman's plan to "completely renovate" the residence, ECF No.
84-2 at 42:20, see ECF No. 84-2 at 60: 14-61 :23. Similarly, any post-demolition work that
Hyman completed is excluded because it was part of his large-scale renovation project and
involved fixing, restructuring, and restoring the house. ECF No. 84-2 at 60:14-61 :23.

According to Miriam-Webster's dictionary, the words "repair," "construction," "renovation," and "remodeling" are
the noun forms of the verbs "repair," "construct," "renovate," and "remodel." These verbs are defined by MiriamWebster's dictionary as follows:
Repair: "To restore by replacing a part or putting together what is torn or broken,"
Construct: "To make or form by combining or arranging parts or elements"
Renovate: "To restore to a former better state (as by cleaning, repairing, or rebuilding)"
Remodel: "To alter the structure of'
See MIRIAM-WEBSTER, https://www.merriam-webster.com.
3

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...

Although Plaintiff argues that the exclusion does not apply here because he did not
authorize Hyman's demolition, ECF No. 88 at 9-11, his argument is substantially undercut by the
fact that he personally considered the work to be remodeling-Plaintiff (who happens to also be
a lawyer) referred to it as "remodeling" in an e-mail to Hyman dated January 26, 2013. ECF No.
84-1 at 90. Accordingly, the Court concludes that Defendant has demonstrated that no reasonable
jury could conclude other than that the exclusion as stated in the Policy applies. See, e.g., Hamm
v. Allstate Prop. & Cas. Ins. Co., 908 F. Supp. 2d 656, 673 (W.D. Pa. 2012) (granting summary
judgment on the ground that a "Weather Conditions" exclusion applied); Baker v. Metro. Prop.
& Cas. Ins. Co., No. 3:12-CV-01231, 2013 WL 5308196 (M.D. Pa. Sept. 19, 2013) (granting

judgment on the pleadings because a water damage exception was applicable); Mav of Michigan,
Inc. v. Am. Country Ins. Co., 289 F. Supp. 2d 873 (E.D. Mich. 2003) (granting summary
judgment because a faulty renovation/repair/construction exception applied).
Thus, Defendant's Motion for Summary Judgment as to Count I is granted on the
grounds that Plaintiffs loss was not "sudden and accidental," as required for coverage under his
Policy, and that even if it were, coverage for this claim is explicitly excluded by the Policy.

B.

Bad Faith

Defendant's Motion for Summary Judgment as to Count II, the bad faith claim, is also
granted. First, Plaintiff alleges a bad faith claim based in part on denial of coverage, however,
"there can be no bad-faith claim [for denial of coverage] if the insurer was correct as a matter of
law in denying coverage." Cozza ex rel. Cozza v. State Farm Fire & Cas. Co., 440 F. App'x 73,
75-76 (3d Cir. 2011) (citing Frog, Switch & Mfg. Co., Inc. v. Travelers Ins. Co., 193 F.3d 742,
751 n. 9 (3d Cir.1999)). In this case, as explained, there is no viable breach of contract claim, so
the first part of Plaintiffs bad faith claim cannot succeed. Second, Plaintiff argues that

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Defendant acted in bad faith by failing to adequately investigate his claim. In his papers, Plaintiff
lists a variety of ways in which he asserts Defendant's investigation was inadequate, including
that Defendant did not conduct enough interviews to uncover the facts of the case and that
Defendant did not look into allegedly stolen tiles brought into the house. ECF No. 88 at 12.
Defendant however, asserts that an adequate investigation was conducted and that it included an
inspection of the house, interviews of Plaintiff and Hyman, consultation with its legal counsel,
and the taking of Plaintiffs Examination Under Oath. ECF No. 82 at 20. Plaintiffs claim
ultimately fails because he has not cited to anything in the record to support his argument-he
merely alleges problems existed without providing any record evidence to prove them. See ECF
No. 88 at 12. Therefore, the Court concludes that "even when the record is considered in the light
most favorable to [him], Plaintiff[] ha[ s] not produced sufficient evidence from which a
reasonable jury could find by clear and convincing evidence that [Defendant] acted in bad faith."

Hamm, 908 F. Supp. 2d. at 673.
IV.

CONCLUSION
Defendants' Motion for Summary Judgment as to Counts I and II is granted.
An appropriate Order will issue.

Mark R. Hornak
United States District Judge

Dated: January 10, 2017
cc:

All counsel ofrecord

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