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Bradley Williamson, Caroline Williamson v. Chubb Indemnity Insurance Company

March 8, 2012

BRADLEY WILLIAMSON, CAROLINE WILLIAMSON PLAINTIFFS,
v.
CHUBB INDEMNITY INSURANCE COMPANY DEFENDANT.



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

MEMORANDUM ON DEFENDANT'S MOTION TO DISMISS, OR IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT

I. Introduction

Plaintiffs Bradley and Caroline Williamson ("Plaintiffs") bring this action against Defendant Chubb Indemnity Insurance Company ("Chubb") for breach of contract (Count I) and bad faith in violation of 42 Pa. C.S.A. § 8371 (Count II). Chubb moves to dismiss Plaintiffs' Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on grounds that Plaintiffs' action is premature by the terms of the insurance policy; in the alternative, Chubb moves for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the following reasons, Chubb's Motion will be GRANTED insofar as it seeks dismissal without prejudice.

II. Facts and Procedural History

The following facts are alleged in the Complaint, reflect facts contained within "undisputedly authentic document[s]" submitted as exhibits by the defendant, or otherwise are documents "integral to or explicitly relied upon in the complaint." See In re Burlington Coat Factory Sec. Lit., 114 F.3d 1410, 1426 (3d Cir. 1997) (internal citations omitted).

Plaintiffs reside at 440 Dreshertown Road, Fort Washington, Pennsylvania 19034. Compl. ¶ 1. Defendant is an insurance company that sold a policy to the Plaintiffs. Compl. ¶ 2-3. Under the insurance policy Chubb agrees to indemnify Plaintiffs against certain losses to their residence at 440 Dreshertown Road. Compl. ¶ 3.

The insurance policy contains an appraisal clause. Def.'s Exh. C at Y-6 (insurance policy). In pertinent part, the appraisal clause provides that:

"If you or we fail to agree on the amount of loss, you or we may demand an appraisal of the loss. Each party will select an appraiser within 20 days after receiving written request from the other. The two appraisers will select a third appraiser . . . . Written agreement signed by any two of the three appraisers shall set the amount of the loss." Id.

The insurance policy also contains a legal action clause. Def.'s Exh. C at Y-5. The legal action clause provides that: "You agree not to bring legal action against us unless you have first complied with all conditions of this policy." Id.

On September 30, 2009, a windstorm damaged Plaintiffs' home and possessions. Compl. ¶ 5. Plaintiffs sought remuneration from Chubb under the policy, and Chubb did not dispute that the policy covered the damage from the windstorm. Compl. ¶¶ 7-8; see also Def.'s Reply Br. at 2 ("Chubb admits that its policy covers all damage for the claim submitted.").

Plaintiffs employed a public adjuster and Chubb employed an independent contractor to assess the amount of loss. Pl.'s Exh. A (Plaintiffs' repair cost assessment attached to Complaint); Def's Appraisal (relied upon by Plaintiffs in Complaint at ¶ ¶ 7-9, 11, 13-15). The itemized estimates prepared for Plaintiffs and Chubb reflected differences in opinion regarding the valuation of certain items, as well as whether certain items needed to be repaired and/or the appropriate method of repair. Pl.'s Exh. A; Def.'s Appraisal. Ultimately, Plaintiffs valued the repairs at $336,974.96, while Chubb valued the repairs at $197,355.45. Pl.'s Exh. A; Def.'s Appraisal.

On March 22, 2011, after receipt of a letter from Plaintiffs' adjuster regarding remaining discrepancies between the parties' estimates, Chubb sent a letter to Plaintiffs invoking the policy's appraisal clause. Def.'s Mot. to Dismiss admitted in Pl.'s Response at ¶ 10. Plaintiffs, however, concede that they refused to participate in the appraisal process. Pl.'s Response at 2-4.

Instead, Plaintiffs brought suit against Chubb in the Philadelphia Court of Common Pleas for breach of contract (Count I) and bad faith (Count II). Compl. ¶¶ 12, 14. Specifically, Plaintiffs allege that Chubb breached its obligation to pay benefits for a covered loss and engaged in bad faith conduct, treating the Plaintiffs unreasonably and unfairly with respect to the adjustment for the covered loss. Id.

On October 17, 2011, the case was removed to this Court. (ECF No. 1.) On October 24, 2011, Chubb filed a Motion to Dismiss or, in the Alternative, for Summary Judgment. (ECF No. 3.) Plaintiffs timely ...


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