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MAHOOD v. OMAHA PROPERTY AND CAS.

August 31, 2001

WILLIAM H. MAHOOD,
V.
OMAHA PROPERTY AND CASUALTY.



The opinion of the court was delivered by: Shapiro, Senior District Judge.

MEMORANDUM AND ORDER

Plaintiff Dr. William H. Mahood ("Mahood"), filing a complaint against Omaha Property and Casualty ("Omaha"), initially alleged breach of contract and bad faith in connection with a flood insurance claim. Because the flood insurance policy in dispute is a Standard Flood Insurance Policy ("SFIP"), issued under the National Flood Insurance Act of 1968, 42 U.S.C. § 4001 et seq., federal law governs this dispute*fn1 and state claims are preempted; plaintiff voluntarily withdrew his state law-based claims and is proceeding on a claim under the policy. The court held a non-jury trial on plaintiff's SFIP claim for partial denial of coverage. In accordance with Federal Rule of Civil Procedure 52(a), the court enters the following findings of fact and conclusions of law:

I. FINDINGS OF FACT

1. Mahood is the owner of the property located at 6250 West Valley Green Road, Flourtown, Pennsylvania 19031.

2. Part of the building structure on said property (the Mahood home) was constructed in approximately 1746; an addition was built in the 1980's. The premises are situated on a flood plain.

3. At all times relevant hereto, plaintiff's property was insured by a Standard Flood Insurance Policy ("SFIP"), codified at 44 C.F.R. Pt. 61, App. A(1) (1998), issued by defendant Omaha.

4. The instant SFIP covered the building only (no contents coverage) with the limit of $250,000.00, less a $1,000.00 deductible. $250,000.00 is the maximum amount of insurance available under the National Flood Insurance Act.

5. The replacement cost of the Mahood home would be $296,000.00. Tr. at 23-24.

6. On September 16, 1999, during Hurricane Floyd, there was a flood loss to Mahood's home. Tr. 2/76.

7. The insurance policy with Omaha was in full force and effect on the date of the loss.

8. During the flood, waters rose to a level of approximately 39 inches inside the home.

9. The home was uninhabitable after the flood; the flood damaged the first floor structure and electrical, plumbing, and mechanical systems. In addition, Mahood's well water was not consumable.

10. After the flood, the furniture inside the home was in disarray. Floors were buckled and wall plaster was peeling. Tr. at 36-37. The paint on the walls and trim was peeling and there was mud and muck everywhere. Tr. at 149, 2/77. The walls and ceilings of the entire first floor were covered with a powdery mildew and a putrid odor permeated the home. Tr. at 60, 149-50, 2/77.

11. Every surface of the kitchen was affected by the flood. Tr. at 37.

12. Every surface of the dining room was affected by the flood. Tr. at 40.

13. Every surface of the powder room was affected by the flood. Tr. at 41.

14. The living room suffered the worst damage. Tr. at 42. The walls of the living room were comprised of an eighteen-inch thick stone wall, plastered over; in front of the stone wall was a stud system of two-by-fours, sheathed with wire lath and more plaster. Both wall systems needed repair. Tr. at 67-68.

15. The living room floor joists all needed replacement and all were replaced. Not all the joists were flood-damaged; some were rotted due to their age. Tr. at 57-59.

16. On or about September 24, 1999, an independent adjuster from Simsol Insurance Services ("Simsol") inspected the premises on behalf of Omaha to determine the flood damage.

17. Robert Reinhart of Simsol estimated that the Mahood home suffered covered damages that would cost $83,053.54 to repair.

18. From this amount, Omaha deducted depreciation in the amount of $9,721.15. The claim was further subject to a deductible of $1,000.00. Omaha considered the payable claim to be $72,332.39.

19. Upon proper proof of repairs, Omaha was willing to pay an additional $9,502.74 it said had been subtracted for depreciation.

20. Omaha did not provide evidence supporting the Simsol estimate at trial.

21. Mahood hired his own public adjuster, Young Adjusting Company ("Young").

22. Richard Reigner ("Reigner") was the Young employee assigned to adjust Mahood's loss. Reigner is a licensed public insurance adjuster in Pennsylvania and New Jersey and has been employed ...


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