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Federal Insurance Co. v. Philotimo

November 17, 2009


The opinion of the court was delivered by: Hay, Magistrate Judge


The Plaintiff, Federal Insurance Company ("Federal" or "Plaintiff"), an Indiana corporation with its principal place of business in New Jersey, issued a homeowner's policy to Mark Gera ("Gera") covering his residence on Furnace Run Lane in Laughlintown, PA. In February 2006, Gera hired the Defendant, Philotimo, Inc., a Pennsylvania corporation doing business as Nikos Chimney Company ("Nikos" or "Defendant"), to perform work on the fireplace and chimney at his residence. Shortly thereafter, in April 2006, a fire caused extensive damage to the structure and contents of Gera's home, for which the Plaintiff, to date, has made payments to Gera exceeding $400,000.00. In a three count Complaint (Doc.1), Federal, exercising its subrogation rights, asserts negligence, breach of warranty, and breach of contract claims against Nikos. The Defendant's Motion for Summary Judgment (Doc. 25) is pending. This Motion will be granted in part and denied in part.

Standard of Review

Summary judgment is appropriate if, drawing all inferences in favor of the non-moving party, "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Summary judgment may be granted against a party who fails to adduce facts sufficient to establish the existence of any element essential to that party's case, and for which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party bears the initial burden of identifying evidence which demonstrates the absence of a genuine issue of material fact. Once that burden has been met, the non-moving party must set forth "specific facts showing that there is a genuine issue for trial" or the factual record will be taken as presented by the moving party and judgment will be entered as a matter of law. Matsushita Elec. Indus. Corp. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty-Lobby, Inc., 477 U.S. 242, 248 (1986).


During the relevant period, Kim Hunter ("Hunter") was the caretaker for Gera's Furnace Run Lane property. (Doc. 28 at 3). One of Hunter's responsibilities was to remove ashes from the home's fireplace after each use. Id. At some point in late February 2006, when he was cleaning the fireplace, Hunter found pieces of brick mortar on top of the ashes. In his deposition, Hunter stated that there were "three pieces, probably about the size of an oreo cookie." (Doc. 28 Ex. B at 7). Hunter put the mortar aside, and telephoned Gera to tell him about the find. ( Id.; Doc. 25 Ex. A at 15). Gera instructed Hunter to "[c]all Nikos Chimney and have them come out and clean it and inspect [the fireplace and chimney]." (Doc. 15 Ex. A at 15). Before Nikos arrived, Hunter and Gera looked into the fireplace. At his deposition, Gera stated: "The fire box was - that's the first place [Hunter] and I looked to see of anything was there. It was intact." (Doc. 25 Ex. A at 62). Hunter testified that he scheduled the appointment with Nikos to have the chimney cleaned and inspected. (Doc. 28 Ex. B at 8). A Nikos work order signed by Hunter shows that a "sweep" of the furnace and chimney was performed on February 28, 2006. (Doc. 25 Ex. C).

Hunter was at the house when two Nikos technicians arrived to do the work. He did not remember their names, but did recall that the men told him that "they were there to clean and inspect the chimney." (Doc. 28 Ex. B at 9). He "[s]howed them where the fireplace was, and then . . . took them down in the basement to show them where the furnace was." ( Id.). Hunter testified: "I pointed out the brick mortar. I showed it to the one technician and he basically just brushed it off and said it just fell off the mantle up in side [sic]. I guess there's a light up inside. And he didn't seem very concerned about it." (Id. at 9). While the men worked, Hunter went outside to attend to other chores. (Id.). Hunter observed that one of the men went onto the roof and put a circular wire brush down the chimney, and he could hear a vacuum cleaner in the vicinity of the fireplace inside. (Id. at 10). He did not see other equipment such as a camera or a light, but believed that the technicians had done a visual inspection of the chimney. This belief was based on the fact that when he asked what shape the flue was in, one of the men responded that it "looked good." (Id.). When asked whether he had "actually ask[ed]" if an inspection had been done, Hunter answered that he had. (Id.). According to Hunter, when the flue was being cleaned, "another chunk [of mortar] came down off the mantle." (Id. at 11). It was about "half the size of a tennis ball. It was round and then it had flat edges." One of the technicians told Hunter that "this fell off the mantle also." (Id.).

Between the cleaning and the date of the fire, the fireplace was used three or four times without incident, and Hunter did not find additional mortar when he removed the ashes. (Id.). On the day of the fire, Gera stacked and lit the wood. Guests were present in the house. Hunter did not see them smoking, and testified that Gera did not keep candles in the room where the fireplace was located. (Id.).

At Federal's request, Jerry E. Isenhour, Sr. ("Isenhour"), who was associated in a unspecified capacity with an enterprise called The Chimney Doctor, Inc, made site inspections of the property in May and June 2006. He also engaged "a chimney service company based in Pennsylvania to perform an on site video inspection of the interior of the flue systems of the . . . chimney[ ] in June of 2006." ( Doc. 28 Ex. E at 1). In a written report to Federal's attorney, Isenhour wrote, "[W]e have reviewed all provided documentation to determine if the performance of [Nikos] was within the Standard of Care of the Chimney Service Industry, and additionally if any actions of the chimney service company could have served to prevent the loss that occurred at [the Furnace Run Lane] location at the time of a fire in April of 2006." (Id.). Isenhour wrote that a "normal chimney sweeping operation" would include an assessment of the exterior of the chimney. His report included photographs of the chimney taken after the fire. Referring to these pictures, Isenhour commented:

[T]he exterior of this chimney is quite stained and discolored, this [sic] will alert the chimney technician that there is a problem with rainwater entry and that this may have caused premature deterioration of the masonry chimney. This view of the chimney would alert the chimneys [sic] sweep technician that there should be a closer look a the chimney for potential issues in regards [sic] the condition of the masonry chimney.

A view of a masonry chimney that reveals dark staining of the exterior of the chimney would alert the technician to further investigate potential hazards. (Id. at 4). Referring to close-ups of the exterior brick, Isenhour wrote that these views indicated that the chimney had suffered splintering and cracking as a result of water entry. "This type of damage will serve to alert the . . . technician that very likely there will be problems in concealed areas and that a more in-depth inspection of these areas is required." (Id. at 7). According to Isenhour, "[t]he condition of the chimney is such that a recommendation of no further used until the chimney was properly repaired would have been in order." (Id.). A view of the interior of the oil fired central heating flue system showed that "mortar is missing between the . . . flue tiles at the joints." (Id. at 9).

The interior photographs of the fireplace showed blackening above the chimney, and the presence of "combustible" material too close to the opening. (Id. at 12). Isenhour wrote that the blackened paneling should have indicated "performance issues" with the fireplace, and a warning should have been issued to the owner regarding clearance standards for the placement of combustibles. (Id.). Additional photographs of the left side of the smoke chamber in the fireplace showed that mortar was "missing in the area where the walls meet." This area could have been inspected with a mirror and a flashlight. (Id. at 14).

A video inspection of the interior of the flue performed at Isenhour's request by Renaissance Chimney Inc. showed gaps in the flue tiles in the smoke chamber and oil flue area. Isenhour attributed these to water damage and poor construction, and stated that they may have allowed the escape of combustion gasses. (Id. at 23). It was Isenhour's opinion "that with the issues this chimney present[ed] during a normal visual; [sic] inspection sufficient defects were noted that would have given the technician the basis to present an opinion of not using the chimney further until [it] had bee repaired or replaced. At a minimum a more thorough inspection should have been suggested prior to any further use." (Id.). If a more in depth had been conducted, "the fire would not have occurred and the structure would not have been damaged." (Id at 24).

The Chief of the Ligonier Volunteer Fire Department, Robert Beaufort, testified that because he found a waxy substance to the left of the fireplace, he originally concluded that the fire was associated with the use of a candle. (Doc. 28 Ex. D at 13). After viewing a video of the inside of the chimney provided to him by Federal's attorney, however, he saw that there was a crack on the bottom of the chimney to the left-hand side, and believed that this was the cause of the fire. (Id.; Doc. 29 Ex. C). Beaufort observed ...

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