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KESTER v. STATE FARM FIRE & CAS. CO.

December 11, 1989

PATRICIA KESTER
v.
STATE FARM FIRE AND CASUALTY COMPANY


Franklin S. Van Antwerpen, United States District Judge.


The opinion of the court was delivered by: VAN ANTWERPEN

FRANKLIN S. VAN ANTWERPEN, UNITED STATES DISTRICT JUDGE

 This diversity matter comes before the court upon the defendant's motion for summary judgment. Oral argument on this motion was heard by the court on October 27, 1989. For the reasons expressed below, we believe that the defendant's motion should be granted, subject to the condition stated herein.

 Before embarking upon a discussion of the relevant law, it is first necessary to provide a brief chronology of events in the instant case. On or about February 11, 1988, the plaintiff's dwelling allegedly sustained windstorm damage. At the time of this incident, homeowner's insurance policy # 78-18-9944-8 was in effect between the plaintiff and the defendant. The defendant first received notice of the alleged loss on July 19, 1988, when it received a letter from Eastern Public Adjusters ("Eastern") who represented the plaintiff. Eastern had evaluated the plaintiff's claim at $ 12,782.96 and submitted an estimate for that amount to the attention of Robert Evans, the claims adjuster assigned to handle this case for the defendant. Mr. Evans prepared an estimate for the defendant, after an inspection of the plaintiff's property. That estimate came to $ 1,878.64.

 On September 6, 1988, the defendant wrote a letter to the plaintiff, questioning whether or not the defendant was obligated for the loss because of the plaintiff's delay in providing written notice of the loss to the company. On or about November 22, 1988, Mr. Evans sent a letter to the plaintiff's agent concerning the defendant's estimate. On November 30, 1988, the plaintiff filed suit in the Philadelphia County Court of Common Pleas. The defendant answered the complaint and also removed the case to Federal court on the grounds of diversity jurisdiction. On or about December 1, 1988, the defendant received a sworn proof of loss on behalf of the plaintiff. On March 23, 1989, the defendant, through its counsel, made a written demand upon the plaintiff for appraisal under the terms of the insurance policy. By letter, dated April 4, 1989, the defendant notified the plaintiff's counsel that it was appointing Michael Potter of Maryland as its appraiser. The plaintiff has not designated an appraiser.

 Paragraph 6 of the homeowner's policy issued by the defendant reads in pertinent part:

 
Appraisal. If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser. Each shall notify the other of the appraiser's identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. . . .

 Paragraph 6 also states: "If the appraisers submit a written report of an agreement to us, the amount agreed upon shall be the amount of the loss."

 Paragraph 8 of the policy further provides: " Suit Against Us. No action shall be brought unless there has been compliance with the policy provisions. The action must be started within one year after the date of loss or damage."

 Fed. R. Civ. P. 56(c) instructs a court to enter summary judgment when the record reveals that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." This rule provides the court with a useful tool when the critical facts are undisputed, facilitating the resolution of a pending controversy without the expense and delay of conducting a trial made unnecessary by the absence of factual dispute. Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d Cir. 1982); Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977). Summary judgment is inappropriate, however, where the evidence before the court reveals a genuine factual disagreement requiring submission to a jury. An issue is "genuine" only if the evidence is such that a reasonable jury could find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). At the summary judgment stage, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. 106 S. Ct. at 2511. However, if the evidence is merely "colorable" or is "not significantly probative," summary judgment may be granted. Id.

 In a summary judgment action, the moving party bears the initial burden of identifying for the court those portions of the record which it believes demonstrate the absence of a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). Following such a showing in a case where the non-moving party is the plaintiff and therefore bears the burden of proof, it must by affidavits or by the depositions and admissions on file "make a showing sufficient to establish the existence of [every] element essential to that party's case." Id. 106 S. Ct. at 2552-53; Anderson, 106 S. Ct. at 2514; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Fed. R. Civ. P. 56(e). In making its ruling on a summary judgment motion, the court must view all inferences in a light most favorable to the non-moving party, United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962); Continental Ins. Co. v. Bodie, 682 F.2d 436, 438 (3d Cir. 1982), must resolve all doubts against the moving party, Gans v. Mundy, 762 F.2d 338, 341 (3d Cir. 1985), cert. denied, 474 U.S. 1010, 106 S. Ct. 537, 88 L. Ed. 2d 467 (1985), and must take as true all allegations of the non-moving party that conflict with those of the movant, Anderson, 106 S. Ct. at 2513.

 With these standards in mind, we now turn our attention to the motion before us. The central issue in the instant case is this: does the existence of the policy's appraisal clause preclude the plaintiff from bringing this court action? We do not find the parties to be in disagreement with the facts which we have set forth above. We, therefore, consider the disposition of the instant case to turn upon the application of the relevant law to these facts.

 In order to invoke the appraisal provision of a policy, the insurer must admit liability and there must be a dispute only as to the amount of the loss. Ice City, Inc. v. Insurance Company of North America, 456 Pa. 210, 314 A.2d 236, 240 (1974). Also, " if appraisal is not requested, or the request is fruitless, or appraisal proceedings are inclusive or abandoned by the parties' joint consent or liability is denied, then the appraisal provision in the contract may not bar the insured from bringing an action for relief in the courts." Id. 314 A.2d at 239 (footnotes omitted) (emphasis supplied). In none of its communications with the plaintiff did the defendant expressly deny liability for the claim and the defendant explicitly admitted liability in open court at the hearing on this motion held on October 27, 1989.


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