The opinion of the court was delivered by: Judge Munley
Before the court is defendants' motion for summary judgment. (Doc. 23). Having been fully briefed, the matter is ripe for disposition.
This case concerns the duties of insurers related to flood coverage. On or about June 23, 2006, a flood occurred at a property on 1250 Roosevelt Highway, Rt. 6, in Waymart Pennsylvania. (Defendants' Statement of Undisputed Facts (Doc. 24) (hereinafter "Defendants' Statement) at ¶ 5). Plaintiff Star Spa Services ("Star Spa") is a former tenant of Plaintiff Stark Spencer Real Estate Partnership ("Stark Spencer") at this address. (Id. at ¶ 3). Both companies are Pennsylvania corporations. (Id. at ¶¶ 1-2). On that date, Stark Spencer maintained a standard flood insurance policy on that property in question through Defendant Nationwide Mutual Flood Insurance Company ("Nationwide"). (Id. at ¶ 6). Star Spa did not have flood insurance coverage for its property, which was stored in the structure owned by Stark Spencer. (Id. at ¶ 7).
Defendants contend that Star Spa never made a request for flood insurance coverage from them. (Id. at ¶ 8). No flood insurance policy was ever issued to Star Spa. (Id. at ¶ 9). When informed by the bank that plaintiff required flood insurance coverage for its renovated building, the plaintiff understood that this type of insurance coverage was separate from other insurance on the property. (Id. at ¶ 10). Defendant Turano Insurance Agency ("Turano") and its representatives never informed Star Spa that it was covered for its contents under a flood insurance policy. (Id. at ¶ 11). Turano also never informed Star Spa that it enjoyed flood insurance coverage under Stark Spencer's flood insurance policy. (Id. at ¶ 12). The property damaged in the flood on June 23, 2006 belonged to Star Spa. (Id. at ¶ 13). The property where the flooding took place is located in a flood zone rated "AE." (Id. at ¶ 14). Substantial improvement and construction occurred at that property after September 30, 1987. (Id. at ¶ 15).
On January 24, 2007, plaintiffs filed a complaint in the Court of Common Pleas of Wayne County, Pennsylvania. The complaint consists of four counts. Count I alleges that the Nationwide Insurance Defendants improperly denied coverage for plaintiffs' losses from the flood. Plaintiffs allege that Nationwide's improper refusal to provide coverage under the policy resulted in "direct and consequential damages" that included "additional damage to personal property and profits, substantial financial hardship and inconvenience with loss of rents and/or rental income." (Id. at ¶ 11). Count II alleges that all defendants negligently misrepresented to the plaintiffs that they would obtain flood contents coverage for Star Spa. (Id. at ¶¶ 13-16). Count III contends that defendants were careless and negligent in failing to provide insurance for the property's contents and failing to notify plaintiffs about the limits of the insurance. (Id. at ¶¶ 18-19). Count IV alleges that the Turano Defendants, in failing to provide plaintiffs with contents coverage, engaged in unfair and deceptive acts or practices in violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 PA. CONS. STAT. § 201.2(4).
On February 16, 2007, defendants filed a notice of removal with this court (Doc. 1). On February 22, 2007, the defendants filed their motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) (Doc. 3). Both parties then filed briefs. The court issued a decision denying in part and granting in part the motion to dismiss on September 25, 2007. The parties then engaged in discovery. At the close of discovery, the defendants filed the instant motion for summary judgment, bringing the case to its present posture.
Because this case arises from a dispute over flood insurance claims under the National Flood Insurance Program, this court has jurisdiction pursuant to 42 U.S.C. § 4072. The court has supplemental jurisdiction over the plaintiff's state-law claims pursuant to 28 U.S.C. § 1367(a) ("In any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article II of the United States Constitution.").
The case is before the court on the defendants' 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 summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original).
In considering a motion for summary judgment, the court must examine the facts in the light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden is on the moving party to demonstrate that the evidence is such that a reasonable jury could not return a verdict for the non-moving party. Anderson, 477 U.S. at 248 (1986). A fact is material when it might affect the outcome of the suit under the governing law. Id. Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof at trial. Celotex v. Catrett, 477 U.S. 317, 322 (1986).
Defendants move for summary judgment on several grounds. The court will address each in turn.
A. Pre-Emption of Plaintiffs' Extra-Contractual Claims
The defendants argue that all of plaintiffs' extra-contractual and tort claims, contained in Counts II-IV of the complaint, are preempted and/or barred as a matter of law. The only allegation of damages in the complaint, defendants contend, are contained in Count I. In that Count, plaintiffs contend that they suffered loss solely because of defendants' failure to make payment under the policy. All of the state-law claims are therefore "preempted" as a matter of law. Moreover, defendants insist that ...