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Brethren Mutual Insurance Co. v. Thomas

August 14, 2006

BRETHREN MUTUAL INSURANCE COMPANY, PLAINTIFF
v.
JOHN THOMAS AND BONNIE THOMAS, DEFENDANTS



The opinion of the court was delivered by: Judge Munley

MEMORANDUM

Before the court for disposition is United States Magistrate Judge Thomas M. Blewitt's report and recommendation suggesting that the defendants' motion for summary judgment be denied. The defendants have filed objections to the report and recommendation. For the following reasons, we will adopt the report and recommendation and deny the motion for summary judgment. Background*fn1

John and Bonnie Thomas, husband and wife, (hereinafter "defendants" or "insureds") owned a dwelling located at RR # 2, Box 2327A, Factoryville, Pennsylvania. On January 14, 2004, a fire destroyed the dwelling and the defendants' personal property located therein. Defendants insured the property through Plaintiff Brethren Mutual Insurance Company (hereinafter "Brethren" or "plaintiff"). Defendants submitted a claim to Brethren for the fire loss. They provided plaintiff with an estimate to rebuild the dwelling and a list of the contents that they lost in the fire.

Plaintiff investigated the loss through licensed private investigators Beiber & Associates. Fire investigator Alex Profka opined to plaintiff that the fire was electrical in nature. Profka also conducted a tape recorded interview with Plaintiff John Thomas regarding the loss and the insurance claim.

At Brethren's request, defendants appeared on February 16, 2004 for an examination under oath regarding estimates to rebuild the dwelling and the contents lost in the fire.

On April 21, 2004, defendants submitted statements to an independent adjuster at Brethren's. During this interview, the defendants made it clear that they had provided all information that they had regarding the dwelling and contents lost to the fire.

Subsequently, Brethren requested that the defendants appear for supplemental examinations under oath in order to address questions regarding aspects of the claim including: the building, contents and additional living expense. Plaintiff sent the demand that the defendants appear to the defendants' attorney. This would have been the fourth time Brethren questioned the defendants regarding the insurance claim. Defendants did not submit to the supplemental examinations under oath, and the plaintiff filed the instant complaint for declaratory judgment.

Plaintiff's lawsuit asserts a breach of contract. It asserts that the insurance contract requires the insureds to submit to supplemental examinations under oath and that the defendants' refusal to do so is a breach of contract. Plaintiff avers that because of this breach of contract, no coverage is due on defendants' insurance claim. Plaintiff requests the court to declare that coverage does not exist for the defendants' claim and to award plaintiff the amounts already paid out, along with costs, attorneys fees and delay damages.

In its answer, the defendants filed a counterclaim asserting breach of contract and bad faith. At the close of discovery, the defendants moved for summary judgment.*fn2 Magistrate Judge Blewitt, who had been assigned the case for pretrial matters pursuant to 28 U.S.C. § 636(b)(1)(A), recommends denial of the motion for summary judgment. The defendants object to this recommendation, bringing the case to its present posture.

Jurisdiction

This Court has jurisdiction pursuant to the diversity jurisdiction statute, 28 U.S.C. § 1332. The plaintiff is a Maryland corporation with a principal place of business in Hagerstown, Maryland, and the defendants are citizens of Scranton, Pennsylvania. (Doc. 1, Compl. ¶ 3, 4). Because we are sitting in diversity, the substantive law of Pennsylvania shall apply to the instant case. Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)).

Standard of Review

In disposing of objections to a magistrate judge's report and recommendation, the district court must make a de novo determination of those portions of the report to which objections are made. 28 U.S.C. § 636 (b)(1)(C); see also Henderson v. Carlson, 812 F.2d 874, 877 (3d Cir. 1987). This court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The district court judge may also receive further evidence or recommit the matter to the magistrate judge with instructions. Id.

Magistrate Judge Blewitt's report and recommendation suggests a disposition for a motion for summary judgment. Granting summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on 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 judgment as a matter of law. See Knabe v. Boury, 114 F.3d 407, 410 n.4 (3d Cir. 1997) (citing FED. R. CIV. P. 56(c)). "[T]his standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for ...


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