The opinion of the court was delivered by: Judge Caputo
Defendant State Farm Fire and Casualty Company moves for summary judgment on plaintiffs' breach of contract and bad faith claims. The plaintiffs, Michael and Deborah Verdetto, were victims of a fire at their rental property. At the time of the incident, they had renters insurance with State Farm. The Verdettos allege the company unreasonably focused its investigation into the fire on them rather than pay out on their claim. State Farm argues in its motion it acted reasonably and only denied coverage after the Verdettos refused to cooperate with its investigation. State Farm further argues this refusal to cooperate voided the Verdettos' policy. The Court agrees with both of State Farm's arguments and will grant its motion for summary judgment.
In November 2008, the Verdettos rented a house at 1003 Plane Street in Avoca, Pennsylvania from Frank and Beverly Moranski under a one-year lease agreement. They then purchased renters insurance coverage from State Farm, under which they maintained $50,000 in contents coverage. The following May, the Verdettos sought to vacate the property and on May 3, 2009 they rented a house from Andrew Tuzinski at 116 Pettebone Street in Forty Fort, Pennsylvania. The Verdettos started moving their personal property into the house on Pettebone Street on May 7 and were sleeping overnight at the house by May 8. On May 15, the Verdettos' son and his friend were removing possessions from and cleaning the Plane Street house. The Verdettos also briefly stopped by the house around 5:00 p.m. Neighbor Joseph Plisko testified to seeing the 1003 Plane Street house on fire and the arrival of police and firefighters around 12:20 a.m. the next morning. Fire Marshal Timothy Young, investigating the fire the next day, determined it was arson.
The Verdettos contacted State Farm on May 16 to report the fire. Jacob Gray was assigned to their claim and contacted them the same day to discuss the matter. The Verdettos told him about the new rental. They also told him that while they were in the process of moving, they still had personal property at the house when the fire occurred. Mr. Gray told them they would need to fill out personal property inventory firms for the contents claim under their policy. State Farm also advanced the Verdettos $2,000 on their claim. In early June, Start Farm received the Verdettos inventory forms. The forms indicated a large amount of valuable items, many of them less than two years old.
In the weeks following receipt of these forms, Fire Marshal Young told State Farm that he had ruled the fire to be an arson. Other circumstances inviting inquiry about the fire and the Verdettos' personal property claims included: the Verdettos claims to having lost a number of high-end items despite living in a new residence; the Fire Marshal's comments that he did not see much personal property at the residence and that Mr. Verdetto may have previously been involved in an arson; the fire being a loss on new business for State Farm, i.e., the property had been insured for less than six months; and a history of late payments on the policy.
Given these red flags, State Farm sought to have the matter further investigated and assigned it to Ted Marzani of the Special Investigative Unit. Mr. Marzani then hired Lee McAdams, a fire investigator, to inspect the property. On June 19, Mr. Marzani sent Mr. Verdetto an authorization for release of financial information and telephone records to aid in the investigation. Under the terms of the State Farm renters policy:
2. Your Duties After Loss. After a loss to which this insurance may apply, you shall see that the following duties are performed:
d. as often as we reasonably require:
(2) provide us with records and documents we request and permit us to make copies;
Even though State Farm requested the Verdettos sign the authorizations numerous times -- as they were required to do under the terms of their policy -- they refused.
State Farm next hired Damage Control, Inc., a salvage company, to help the Verdettos with the reconditioning of their fire damaged possessions. But their access to the house was delayed several weeks because Mr. Moranski, the landlord, would not allow them into the home. State Farm then hired Brunozzi Investigative Agency to contact local authorities regarding the fire investigation. The Avoca Police Chief told Mr. Brunozzi that Mr. Verdetto had previously been arrested for arson. The Chief also told him he had been in the house five days before the fire and had seen few personal possessions at the time. Fire Marshal Young also told Mr. Brunozzi that there was little in the home when he examined it the day of the fire. Subsequently, Mr. Tuzinski, the Verdettos' new landlord, testified in his deposition that the Verdettos were "well moved in" to their new residence at 116 Pettebone Street a week prior to the fire and that the basement was "packed" with stuff.
The accounts of the contents of the Plane Street home at the time of the fire given by Mr. Moranski, the Avoca Police Chief, Mr. Tuzinski, and Fire Marshal Young all conflicted ...