The opinion of the court was delivered by: Ambrose, District Judge
OPINION and ORDER OF COURT
Pending before the Court is a Motion for Summary Judgment filed by Defendant, Allstate Insurance Company ("Allstate") seeking the entry of judgment in its favor on the Plaintiffs' breach of contract and bad faith claims. See Docket No. . Plaintiffs filed a Brief in Opposition thereto. See Docket No. . Allstate filed a Reply thereto. See Docket No. . After a careful review of the submissions by the parties and for the reasons set forth below, the Motion is denied in part and granted in part.
This is a breach of an insurance contract and bad faith case. Plaintiffs, David and Connie Williams, owned residential property in Mercer County, Pennsylvania. See Docket No. , ¶ 1. All parties agree that the Plaintiffs maintained a written homeowners' policy of insurance with Allstate in the amount of $60,000. Id, ¶ 2-3. However, the Williams contend that on May 22, 2006, they placed a phone call to the office of their Allstate agent, Henry Cocain, in an effort to increase this amount of coverage. Specifically, Mrs. Williams spoke to Mr. Cocain's secretary / office manager Betty Lunn, and explained that they wanted an increase in coverage to $100,000 in light of remodeling and a new appraisal. According to Mrs. Williams, Betty Lunn responded that she would take care of the paperwork and that a bill reflecting the increased premium would be sent in the mail. See Docket No. 45-3, p. 5.*fn1 On May 24, 2006, two days after this conversation, Mr. Cocain drove to the Plaintiffs' home to verify that remodeling had been done since the prior coverage had been in place. Because nobody was home when Mr. Cocain arrived, he was unable to conduct an inspection. An electrical fire destroyed the house on May 28, 2006.
Two days after the fire, Bill Conrad, an Allstate adjuster, met with the Plaintiffs and told them that the $60,000 would be covered under their written Policy. Plaintiffs disagreed with this amount and told Conrad that the limits had been raised to $100,000. See Docket No. , ¶10. Shortly after this meeting, Allstate began an investigation into the issue of coverage.
As part of the investigation, Conrad spoke with Mr. Williams on June 14, 2006. He requested copies of documents regarding the loan application, appraisals or any paperwork that applied to the loan / building to substantiate the increase in coverage and the Williams agreed to provide everything they could salvage from their home. Id., ¶¶ 34-35. Additionally, Conrad spoke to Betty Lunn, who explained her understanding of what Mrs. Williams had told her. Additionally, Tom Lacombe, an Allstate employee, secured Cocain's recollection of the Williams' May 22, 2006 request via a fax. Cocain wrote that the Plaintiffs had called and requested an increase in coverage to $100,000. Id., ¶ 41. The fax, however, contrasts with Mrs. Williams' contention that the remodeling had been completed. Instead, the fax indicates that the Williams were instructed to call Allstate once the remodeling was finished so that the property could be inspected. See Docket No. 45-9, Ex. 12.
After completing the investigation, Allstate determined that there was no agreement to increase the Williams' dwelling coverage from $60,000 to $100,000. See Docket No. , ¶ 43. On June 30, 2006 Allstate communicated its coverage decision to the Williams and issued a draft for the policy limits for dwelling coverage in the amount of $60,000 payable to David and Connie Williams and the mortgagee listed under the Policy. Id., ¶ 44. The Williams declined to accept the draft and demanded payment from Allstate in the amount of $100,000, which they believed to be the coverage amount under the orally modified policy.*fn2
Summary judgment may only be granted if the pleadings, depositions, answers to interrogatories and admissions on file, together with any affidavits, show that there is no genuine issue as to any material facts and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). A fact is material when it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Rule 56 mandates the entry of judgment, after adequate time for discovery and upon motion, against the party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
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 nonmoving party. Anderson, 477 U.S. at 248. 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, 477 U.S. at 322. Once the moving party satisfies its burden, the burden shifts to the non-moving party, who must go beyond its pleadings, and designate specific facts by the use of affidavits, depositions, admissions, or answers to interrogatories showing that there is a genuine issue for trial. Id. at 324.
The Plaintiffs contend that the written insurance contract providing for dwelling coverage of $60,000 was orally modified as a result of the May 22, 2006 phone call. Because Allstate failed to tender this amount, the Plaintiffs charge them with a breach of contract. Allstate seeks the entry of summary judgment in its favor on this claim.
Allstate concedes that a written agreement can be modified by a subsequent oral agreement. See Docket No. , p. 15, citing, Pellegrene v. Lu, 403 Pa. 212, 215, 162 A.2d 298 (1961). See also, Fina v. Fina, 1999 Pa. Super. 201, 737 A.2d 760 (1999). Further, Allstate acknowledges that the modification may be shown by writings, by words, by conduct, or by any combination thereof. Id. See also Trombetta v. Raymond James Financial Services, Inc., 2006 Pa. Super. 229, 907 A.2d 550, 558 (2006) (stating that modification may be demonstrated by words, conduct or both). As Allstate insists, however, the modification must be based upon valid consideration and proven by clear, precise and ...