The opinion of the court was delivered by: COHILL
Peter Pucci and Carmella Scalese Pucci resided in a single-family dwelling at 249 Merchant Street in Ambridge, Pennsylvania from the time of their marriage in 1932 until February 21, 1979. On the latter date, a natural gas explosion in an adjacent building caused extensive blast and fire damage to the Puccis' residence. Since the accident, the Puccis have lived with their daughter and son-in-law.
The Puccis had insured their residence against loss from fire through a homeowner's policy issued by Commercial Union Assurance Company. The basic policy coverages that were in effect on the date of the loss insured the dwelling in the amount of $ 40,000, appurtenant structures in the amount of $ 4,000, personal property in the amount of $ 20,000, and loss of use in the amount of $ 8,000. The Puccis filed a timely proof of loss statement with Commercial Union, in which they asserted a claim in the amount of $ 29,143 for damage to the dwelling, $ 8,626.41 for loss of personal property, and $ 1,800 for additional living expenses. The policy contained a loss deductible clause in the amount of $ 100. Thus, the net amount of the Puccis' claim was $ 39,469.41.
Commercial Union promptly paid the Puccis' claims for loss of personal property and for additional living expenses. It declined to satisfy the claim for damage to the dwelling, however, after learning on February 22, 1979 that the Puccis probably were not the sole owners of the house. Desiring to avoid the possibility of incurring multiple liability to the probable co-owners of the damaged dwelling, Commercial Union paid the amount in dispute into the registry of this Court and filed an interpleader action pursuant to 28 U.S.C. § 1335 (1976). The complaint in interpleader names nine individuals, in addition to the Puccis, as defendants. The insurer asks the Court to determine the actual cash value of the damaged portion of the dwelling at 249 Merchant Street and to determine the legal rights of the alleged co-owners in the proceeds of the insurance policy.
The Puccis filed an answer to the complaint in interpleader, alleging that they are the only legitimate claimants to the insurance proceeds, that the explosion and fire actually caused damage to the dwelling in the amount of $ 44,848, and that the insurer acted improperly when it filed the interpleader action. In addition, they asserted a counterclaim for punitive damages arising from the insurer's allegedly unjustifiable refusal to satisfy their claim on the policy.
Four other individuals also filed answers to the complaint in interpleader. Eugene R. Caputo, administrator of the estate of Rose Scalese Caputo, alleged in his answer that he is a legal and equitable owner of the Merchant Street residence, that the explosion and fire caused a reduction in the value of his interest in the property, that he is entitled to receive a portion of the proceeds from the insurance policy, and that Peter and Carmella Pucci are trustees of the proceeds from the insurance policy for the benefit of the estate of Rose Scalese Caputo. Fred Scalese, Victor Scalese, deceased, through his surviving spouse, and Arthur Scalese, deceased, through his surviving spouse, filed a joint answer to the complaint in interpleader, in which they alleged that all three of them have a proprietary interest in the Merchant Street dwelling, that Peter and Carmella Pucci have no ownership interest in the property, and that all three of them are entitled to a portion of the proceeds from the insurance policy.
Ownership Interest in the Dwelling
A. Last Will and Testament of Nicola Scalese
Nicola Scalese and his wife, Paulina, purchased the three-story, frame dwelling at 249 Merchant Street in 1918. Paulina Scalese died on November 24, 1922; Nicola thereby became sole owner of the dwelling as the surviving tenant by the entireties. Nicola Scalese subsequently intermarried with Filomena Scalese. His two marriages produced a total of twelve children. In 1932, one of Nicola's daughters, Carmella, married Peter Pucci. At the invitation of Nicola, the newlyweds lived in two upstairs rooms in the Merchant Street house.
Nicola Scalese died on October 17, 1933. His last Will and Testament read in pertinent part as follows:
I give and devise my real estate situate at No. 249 Merchant Street, Ambridge, Pennsylvania to my wife, Filomena Scalese for life and after her death then to be divided equally among the children, i. e. my children living at the time of my death, and if any of my children shall die before my wife, Filomena Scalese, then each of my children dying before my wife shall have the power to appoint his share to such person or persons as he or she will see fit, and in lieu of the exercise of such appointment the share of such child dying before my wife, Filomena Scalese, shall be divided equally among the children living at the death of my wife and those persons whom a deceased child has appointed, the same as if said deceased child or children had been living at the death of my wife.
I appoint my wife, Filomena Scalese executrix and my son James Scalese, executor of my estate and I appoint Felomena Scalese and James Scalese guardian of my minor children, to serve as executrix, executor and guardian, without bond.
Pl. Exh. 2. Only one of Nicola's twelve children, Dominic, predeceased his father.
Prior to Nicola's death, all of the children had moved out of their father's home except Victor and Carmella. Filomena remarried in 1935, continued to live in the Merchant Street house for six months following her remarriage, and then moved elsewhere. Victor also moved elsewhere sometime during the mid-1930's.
When Filomena vacated the house in 1936, the taxes and insurance premiums were in arrears, and the house was in need of a significant amount of maintenance work. James Scalese, Carmella's brother and the executor of Nicola's Last Will and Testament, asked Peter and Carmella Pucci to remain in the house and to take care of it. Peter Pucci initially balked at the ...