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Pisano v. Nationwide Mutual Fire Insurance Co.

October 21, 2009

JAMES PISANO
v.
NATIONWIDE MUTUAL FIRE INSURANCE COMPANY



The opinion of the court was delivered by: Goldberg, J.

MEMORANDUM OPINION AND ORDER

This case involves an insurance coverage dispute stemming from a rainstorm which caused approximately four feet of water to collect in the basement of Plaintiff, James Pisano's, commercial property. Defendant Nationwide Mutual Fire Insurance Company (hereinafter referred to as "Nationwide") has moved for partial summary judgment, which, for the reasons set forth below, will be granted.

I. FACTS

Pisano owns 1648-1652 Passyunk, a property in Philadelphia, Pennsylvania. The property includes three addresses: 1648, 1650 and 1652 Passyunk Avenue. 1648 Passyunk is a three story building, with apartments on the top two floors and a jewelry store on the first floor. 1650 and 1652 Passyunk are a one story restaurant. The basement in question, extends below all three addresses.

After a rainstorm on August 26, 2006, Pisano's property suffered water damage, including damage to personal property. At the time of the storm, Pisano had a commercial building insurance policy issued by Nationwide insuring this property and its contents. In pertinent part, the "Exclusions" section of the policy contained the following lead-in clause and specific water exclusion:

B. EXCLUSIONS

1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.

(1) Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not;

(2) Mudslide or mudflow;

(3) Water that backs up or overflows from a sewer, drain or sump; or

(4) Water under the ground surface pressing on, or flowing or seeping through:

(a) Foundations, walls, floors or paved surfaces;

(b) Basements, whether paved or not; or

(c) Doors, windows or other openings. (Policy, Nationwide's Motion, Exhibit C).

On August 29, 2006, Pisano reported the claim to Nationwide, representing that a drain line that was in place to channel roof water had separated, causing some damage to the first floor jewelry store and significant damage to the basement. On August 31, 2006, Nationwide sent contractor, Joseph Kurtz, to Pisano's property to conduct an initial inspection of the damage. (Nationwide's Motion, ¶¶ 8-10). Additionally, David Porter, an adjustor for Nationwide, inspected the property on September 20, 2006, and observed a 43 inch water line and 11/2 inches of mud in the basement. (Nationwide's Motion, ¶¶ 11, 17). Nationwide also retained engineer, Jody DeMarco, who inspected the property and on October 13, 2006, reported that:

Based upon observation[s] made during the site investigation and research, it has been determined the subject building experienced a leak via the conduit from the roof drain. This leak caused water to enter the interior of the building in the vicinity of the basement stairs. This leak caused damage to interior walls and ceiling tiles.

g. Water

Additionally, the basement of the subject building experienced water intrusion from a ground source. This ground source accounts for the large amount (42 inches) of water and the silt along the floor and walls of the basement.

While the roof drain contributed to the water intrusion in the building, the vast majority of the water damage is a result of water entering the basement from a ground source. (DeMarco Report, Nationwide's Motion, Exhibit C).

Based on DeMarco's findings, Nationwide determined that the basement damage was caused primarily by "ground water, surface water and flood water." Consequently, on October 14, 2006, Nationwide sent Pisano correspondence declining coverage for the basement damage but offering to pay for first floor damages caused by "a failed roof drain." (Correspondence, Nationwide's Motion, Exhibit C).

Pisano filed his original complaint against Nationwide on April 23, 2008, in the Philadelphia County Court of Common Pleas. Nationwide removed the case to this district, and thereafter, Pisano filed an Amended Complaint on June 19, 2008, alleging four counts: (I) Breach of Contract; (II) Bad Faith; (III) Violations of the Unfair Trade Practices and Consumer Protection Law; and (IV) Deceit. Nationwide's Motion to Dismiss Counts III and IV, was granted by the Honorable Eduardo C. Robreno on August 1, 2008, and, thereafter, the case was transferred to the undersigned. Nationwide has now ...


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