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Michael Gillin, et al v. Universal Underwriters Insurance Company

March 4, 2011

MICHAEL GILLIN, ET AL., PLAINTIFFS,
v.
UNIVERSAL UNDERWRITERS INSURANCE COMPANY,
DEFENDANT.



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

MEMORANDUM OPINION

March___, 2011

Presently before the Court is Defendant, Universal Underwriters Insurance Company's Motion for Summary Judgment (Docs. 9-11); Plaintiffs, Michael Gillin and Ace & Sons, Inc.'s Response in Opposition thereto (Doc.18) and Defendant's Reply to Plaintiff's Response in Opposition, which the Court will treat as a Motion For Leave To Reply (Docs. 19-20). For the reasons set forth below, upon careful consideration of the parties submissions and exhibits thereto, Defendant's Summary Judgment Motion will be GRANTED.

I. PROCEDURAL HISTORY

Plaintiffs initiated the instant action in the Delaware County Court of Common Pleas on November 13, 2009. (Doc. 1) Defendant Universal Underwriters Insurance Company ("Universal" or "Defendant") filed a notice of removal in this Court pursuant to 28 U.S.C. § 1441 et seq. and 28 U.S.C. § 1446 on December 9, 2009. The parties' pleadings reflect that Plaintiffs are citizens of Pennsylvania, and Defendant is Kansas corporation with a principal place of business in the State of Kansas (Compl. ¶1-3.) The amount in controversy at the time of Plaintiff's initial filing was $150,000, thus exceeding the jurisdictional requirement of $75,000.00. (Compl. ¶¶ 22, 26, 30.) Therefore, jurisdiction in this Court is proper pursuant to 28 U.S.C. § 1332. Pursuant to the terms of the contract entered into by the parties, the matter was then referred to arbitration. The subject motion, Universal's Motion for Summary Judgment (Doc. 10) was subsequently filed on November 2, 2010. The Court denied Defendant's motion to stay arbitration pending adjudication of the motion and the parties proceed to arbitration on January 11, 2011. (Doc. 17) Having been unsuccessful at arbitration, the Court now addresses the pending motion.

II. FACTUAL BACKGROUND

The instant action arises from an insurance coverage dispute. At all relevant times, Plaintiff Ace & Sons Inc. ("Ace & Sons") was the holder of a property insurance policy, policy number 137258H, entered into with Universal, an insurance company. (Def.'s Mot. Summ. J. Ex. G. at 3) Plaintiff, Michael Gillin ("Gillin") is a principal of Ace & Sons. (Compl. ¶4.) On or about November 29, 2002, the insured property located at 99 Chester Pike, Darby, Pennsylvania sustained severe damage as a result of the collapse of a wall on neighboring property owned by Fink, S&S Automotive Sales, TAG, Inc. ("Fink") and Darby Borough. (Compl. ¶ 6.) The property sustained structural damage in addition to significant water infiltration damage. (Compl. ¶ 7.) Consequently, Plaintiffs notified Defendant of the occurrence and submitted a claim for coverage under the policy. (Compl. ¶ 8.) Defendant verbally declined Plaintiff coverage for the claim on December 3, 2002, and again on December 16, 2002. (Def.'s Mot. Summ. J. Ex. E. at 2) These denials were based upon a verbal inspection report rendered by an independent adjuster with Crawford & Company. (Def.'s Mot. Summ. J. Ex. E. at 2) See also, (Mason Dep. 11: 22-24, Apr. 26, 2010.).

On or around November 26, 2002, Robert C. Weber PE, RPA, Defendant's engineer inspected the premises at Universal's request. (Mason Dep. 26: 1-6.) Thereafter, Weber prepared a report in which he opined that "the retaining wall in question bowed and cracked due to outward movement of soil and hydrostatic pressure." (Def.'s Mot. Summ. J. Ex. E. at 2) Moreover, in a letter dated December 3, 2002, Weber advised Tory Powers, Code Enforcement Official of the Borough of Darby that It is further my professional opinion that the retaining wall has moved as a result of of soil and hydrostatic pressure from behind the retaining wall and, therefore, has and continues to exert a greater horizontal force on the left side wall of Ace & Sons Body Shop building than that on the right side. ( Def.'s Mot. Summ. J. Ex. C. at 3)

Subsequent to Weber's investigation, Universal denied Plaintiff's claim in a letter dated January 14, 2003. Plaintiffs requested reconsideration of Defendant's claim denial. (Compl. ¶ 10.) Upon reconsideration, Defendant again denied Plaintiffs' claim for insurance coverage under the policy in a letter dated December 20, 2003. ( Def.'s Mot. Summ. J. Ex. F. at 2) The letter stated in pertinent part:

As per your request of October 28, 2003 we have reconsidered the denial of coverage for the above captioned loss. [Type of Loss: Retaining wall movement due to earth movement and hydrostatic pressure] Once again we have concluded that there is no coverage for the damage to the insured building resulting from the neighboring properties shifting retaining wall.

Regarding your assertion that coverage should apply due to the fact that the damage to the insured property was a result of the insured property being trespassed upon please refer to the exclusionary language of exclusion (i)of Property Part 330 of the insureds UNICOVER V Policy form. This exclusion excludes losses caused directly or indirectly from settling, shrinkage, bulging or expansions of foundations, walls, floors, roofs or ceilings. The concurrent causation language of the policy indicates that such losses are excluded regardless of any other cause or event that takes place at the same time or in any sequence to such loss. If the insured property was indeed trespassed upon during the construction of the wall in question by the neighboring landowner, Troy Fink, and/or persons in his employ the trespassing would be considered another cause or event that occurred at the same time or in any sequence to the loss.

Please also refer to the exclusions reviewed in our earlier letter of 1/14/03, exclusions (l), (o) and (s) of Property Part 330 of the insured's UNICOVER V policy form. Exclusion (l) excludes loss resulting from earth movement, including but not limited to earthquake, volcanic eruption, explosion or effusion, landslide, mudflow or mudslide, earth shrinking, rising or shifting. Exclusion (o) excludes loss resulting from underground water that exerts pressure on, flows seeps or leaks through foundations and walls. Exclusion (s) excludes loss from collapse. As with exclusion (i) the concurrent causation language of the polciy would also apply to exclusions (l), (o), (s). ( Def.'s Mot. Summ. J. Ex. F. at 2)

Moreover, on September 30, 2005, Richard Roberts, P.E., investigated the property on behalf of Plaintiff, Gillin. Roberts issued a report in which he opined that the collapse of the bearing wall was a direct result of additional retained soil placed behind the retaining wall. (Pl.'s Mem In Support of Response in Opp'n 11) Specifically, Roberts noted that After construction of the retaining wall, additional soil backfill was placed behind the retaining wall. This resulted in greater horizontal earth pressure on [the subject premises] than previously existed.

Another result of the construction of the retaining wall was the collapse of a bearing was in the other building adjacent to the wall. This was a direct result of additional retained soil being placed behind the retaining wall.

My analysis of the retaining wall indicates that the wall does not meet the building code requirements for safety against overturning and sliding. The wall would fail at least by sliding due to the soil loads only and this means that the wall has, and will continue to exert horizontal force on the northwest corner of the subject ...


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