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July 27, 1999


The opinion of the court was delivered by: Lowell A. Reed, Senior District Judge.


Presently before the court is the motion of defendant ITT Hartford Groups, Inc. ("Hartford") for summary judgment (Document No. 22) pursuant to Federal Rule of Civil Procedure 56(c), the memorandum of plaintiffs in opposition thereto (Document No. 23) and the reply of Hartford (Document No. 25). Based on the following analysis, the motion of Hartford will be granted in part and denied in part.

I. Background

In their complaint, the plaintiffs contend that an outside wall of their house collapsed. See Defendants' Exhibit A, Plaintiffs' Complaint at 10. The loss involved the "[o]utside wall of the first floor, including the basement — on the side in the rear of house [sic] collapsed." See Defendants' Exhibit D, Plaintiffs' Answers to Hartford's Interrogatories, ¶ 5. The plaintiffs assert that the loss of the collapsed wall is covered under their Hartford Homeowners Policy. The policy, no. 55 RB 932355, was in effect between March 27, 1996 and March 27, 1997. See Defendants' Exhibit B, Homeowners Policy.

In order to qualify for policy coverage, several conditions must be met. First, the loss incurred must be provided for in the policy. Possible restrictions may limit the insured's ability to recover the incurred loss. See Defendants' Exhibit B, Homeowners Policy, Section 1 — Property Coverages, Additional Coverages, ¶ 8 at 5 of 18. Second, the loss must occur during the policy period. For instance, if a deterioration problem occurred prior to the effective date of a policy, an insurer would not be held liable for ongoing damage that began before the insurer's policy period. See Defendants' Exhibit B, Homeowners Policy, Section I and II — Conditions, ¶ 1 at 17 of 18. Third, the policy requires suit to be started within one year after the date of the loss. See Defendants' Exhibit B, Homeowners Policy, Section I — Conditions, ¶ 8 at 11 of 18. Plaintiffs filed their complaint here on October 8, 1997.

After receiving notice of the October 1996 loss, Hartford employed an engineer, Nicholas S. Colanzi, M.S.C.E., P.E., to inspect the plaintiffs property. Mr. Colanzi's December 18, 1996 report provided that "the damage to the Bostick dwelling is the direct result of long term water infiltration and differential earth movement which has occurred over time (years)." See Defendants' Exhibit H, The Defendants' Expert Report at 4. He further opined that the collapse of the wall could not causally be related in any way to any single occurrence or sudden event of weather-related or other phenomena. Id. The defendants further contend that because the plaintiffs' property was located in the Logan section of Philadelphia, an area that has experienced problems with its houses, including settlement, unevenness of the ground, drainage problems and wet basements, the plaintiffs were aware of such problems as early as 1991 or 1992. See Defendants' Exhibit C, Adrienne Bostick's Deposition at 49-50. Based on their expert's testimony and evidence of similar area damage, Hartford rejected the Bosticks' claim in a letter dated March 12, 1997, asserting that the loss to the Bosticks' home was not covered by the policy. See Defendants' Exhibit J, Letter from Hartford Insurance Denying Coverage.

Significantly, however, the plaintiffs' expert, Kenneth P. Creech, P.E., who is a professional engineer, examined the property and opined in his November 13, 1998 report that "[o]n October 8, 1996, the rear section of the subject property collapsed" and "the cause of the collapse was failure of the mortar in the brick wall due to hidden water damage." See Defendants' Exhibit I, Plaintiffs' Expert Report at 1-2. He further concluded that the cause of the failure was not related to sinking, rising, or shifting of the earth at the time of the collapse. Id. Because the policy insures against hidden decay, the plaintiffs contend that the homeowners policy covers the loss suffered.

The defendants request that summary judgment be entered in their favor. The plaintiffs are Pennsylvania citizens. The defendants are foreign corporations with their principle places of business in Connecticut. The amount in controversy exceeds $75,000 exclusive of interests and costs. Diversity of citizenship exists and jurisdiction is founded upon 28 U.S.C. § 1332.

II. Standard for Summary Judgment

Rule 56(c) of the Federal Rules of Civil Procedure provides that "if the pleadings, depositions, answers to interrogatories, and admissions of file, together with the affidavits, if any, show 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," then a motion for summary judgment may be granted.

The moving party has the initial burden of illustrating for the court the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-161, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The movant can satisfy this burden by "pointing out to the district court that there is an absence of evidence to support the nonmoving party's case;" the movant is not required to produce affidavits or other evidence to establish that there are no genuine issues of material fact. Celotex, 477 U.S. at 323-325, 106 S.Ct. 2548.

Once the moving party has made a proper motion for summary judgment, the burden switches to the nonmoving party. Under Rule 56(e),

  [w]hen a motion for summary judgment is made and supported as
  provided in this rule, an adverse party may not rest upon the
  mere allegations or denials of the adverse party's pleading, but
  the adverse party's response, by affidavits or as otherwise
  provided in this rule, must set forth specific facts showing
  that there is a genuine issue for trial. If the adverse party
  does not so respond, summary judgment, if appropriate, shall
  be entered against the adverse party.

Hence, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Electric Industries Co. v. Zenith Radio Co., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A party opposing the motion must come forward with specific facts. Id. Before a court will find that a dispute about a material fact is genuine there must be sufficient evidence upon which a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, the moving party is entitled to summary judgment, as a matter of law, when the "non-moving ...

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