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MARGOLIES v. STATE FARM FIRE & CAS. CO.

December 22, 1992

LESLIE A. MARGOLIES and LINDA B. WEINSTEIN, Plaintiffs
v.
STATE FARM FIRE AND CASUALTY COMPANY, Defendant



The opinion of the court was delivered by: BY THE COURT; ROBERT S. GAWTHROP, III

 Gawthrop, J.

 December 22, 1992

 This case raises an interesting question in an area of frequent recurrence in this forum: divining the meaning of an insurance policy.

 Plaintiffs sustained water damage to some personal property when their water heater broke, burst, or exploded on April 23, 1991. Plaintiffs filed a claim on their insurance policy with defendant. The parties were unable to agree on the amount of compensation to be paid by defendant to plaintiffs, and plaintiffs filed this diversity suit, Erie-bound to the law of Pennsylvania, on May 13, 1992. Plaintiffs allege three causes of action: breach of contract, bad faith, and violation of the Pennsylvania Consumer Protection Law.

 The policy itself was a hybrid fire and casualty insurance policy which covered various types of damage. The policy contained a provision purporting to limit the time for bringing actions on the policy to within one year of the time of the alleged loss. Before me now is defendant's motion to dismiss, in which defendant claims that plaintiffs' first two causes of action are barred since the suit was not begun within the one-year period, and that the third cause of action is barred because insurance claims do not come within the ambit of the Consumer Protection Law. Upon the following reasoning, I shall deny the motion.

 Count 1: Breach of Contract

 The language of § 382(b)(1) is rather all-encompassing, and it sets forth the interesting statutory paradox that fire insurance applies "whether fire ensue or not." The section reads in relevant part:

 (b) Stock fire insurance companies may be incorporated . . . for making insurances-- (1) On dwelling houses, stores, and all kinds of buildings, and household furniture and other property, --against loss or damage, including loss of use or occupancy, by fire, smoke, smudge, lightning, and explosion, whether fire ensue or not, and by tornadoes, cyclones, windstorms, earthquakes, hail, frost, sleet, snow, or flood; against loss or damage by water to any goods or premises, arising from the breakage or leakage of sprinklers, pumps, or other apparatus erected for extinguishing fires, and of water pipes. . . .

 40 P.S. § 382 (emphasis supplied).

 Section 382(c)(8), the casualty insurance provision, is in many ways similar to the fire insurance provision. However, it does include the language, "or of other conduits or containers," a clause notably missing from the fire insurance provision. That provision reads in relevant part:

 (c) Stock casualty insurance companies may be incorporated . . . (8) To insure any goods or premises against loss or damage by water or other fluid, caused by the breakage or leakage of sprinklers, pumps, or other apparatus erected for extinguishing fires, or of other conduits or containers, or of water pipes, or caused by casual water entering through leaks or openings in buildings; and against accidental injury, from causes other ...


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