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7th & Allen Equities v. Hartford Casualty Insurance Company

November 2, 2012

7TH & ALLEN EQUITIES, PLAINTIFF
v.
HARTFORD CASUALTY INSURANCE COMPANY, DEFENDANTS



The opinion of the court was delivered by: James Knoll Gardner, United States District Judge

OPINION

This matter is before the court on Defendant Hartford Casualty Insurance Company's Notice of Motion for Summary Judgment Pursuant to F.R.C.P. 56, which motion was filed July 24, 2012.*fn1 On August 13, 2012 Plaintiff 7th & Allen Equities' Notice of Cross-Motion for Partial Summary Judgment as to Liability was filed.*fn2 By Order dated August 21, 2012 and filed August 22, 2012 I dismissed plaintiff's cross-motion for summary judgment as untimely.*fn3 However, I indicated that I would consider plaintiff's cross-motion as a response in opposition to defendant's motion for summary judgment.

On September 18, 2012 the Reply Brief of Defendant Hartford Casualty Insurance Company was filed. On October 12, 2012 plaintiff filed a sur-reply brief.*fn4

I held oral argument on October 31, 2012 and took the matter under advisement. Hence this Opinion.

For the following reasons, I dismiss in part as moot and deny in part defendant's motion for summary judgment. Specifically, at the oral argument on October 31, 2012 counsel for plaintiff, Mark S. Haltzman, Esquire, orally withdrew on the record all liability and damages claims of plaintiff regarding the flooding of plaintiff's property on July 7, 2009. Therefore, I dismiss as moot defendant's motion for summary judgment to the extent it contends that the loss resulting from the flooding of plaintiff's property on July 7, 2009 is not covered by the insurance policy issued by defendant to plaintiff. However, defendant's motion for summary judgment is denied in all other respects.

JURISDICTION

This action is properly before the court on diversity jurisdiction. Plaintiff 7th & Allen Equities is a limited partnership with two members. George M. Diemer is a citizen of Florida. Craig Rohner is a citizen of New Jersey. Defendant Hartford Casualty Insurance Company is an Indiana corporation with its principal place of business in Hartford, Connecticut. The amount in controversy is in excess of $75,000. See 28 U.S.C. § 1332.

VENUE

Venue is proper because plaintiff alleges that a substantial portion of the events giving rise to this claim occurred in this judicial district. 28 U.S.C. § 1391.

PROCEDURAL HISTORY

This case arises from a leak to a sprinkler system in plaintiff's commercial property located at 602-618 North Seventh Street, Allentown, Lehigh County, Pennsylvania, and defendant's refusal to pay plaintiff's claim for insurance benefits for the damages resulting from the sprinkler leak.

On March 4, 2011 plaintiff filed a Complaint against defendant. On June 3, 2011 plaintiff filed its First Amended Complaint to adequately plead subject matter jurisdiction based on diversity of citizenship.

The amended complaint asserts a claim for Declaratory Judgment (Count I); Breach of Contract (Count II); and Bad Faith (Count III). On July 24, 2012, after the completion of discovery, defendant filed the within motion for summary judgment.

STANDARD OF REVIEW

In considering a motion for summary judgment, the court must determine whether "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Federal Home Loan Mortgage Corporation v. Scottsdale Insurance Company, 316 F.3d 431, 433 (3d Cir. 2003). Only facts that may affect the outcome of a case are "material". Moreover, all reasonable inferences from the record are drawn in favor of the non-movant. Anderson, supra.

Although the movant has the initial burden of demonstrating the absence of genuine issues of material fact, the non-movant must then establish the existence of each element on which it bears the burden of proof. See Watson v. Eastman Kodak Co., 235 F.3d 851, 858 (3d Cir. 2000). Plaintiff cannot avert summary judgment with speculation or by resting on the allegations in his pleadings, but rather he must present competent evidence from which a jury could reasonably find in his favor. Ridgewood Board of Education v. N.E. for M.E., 172 F.3d 238, 252 (3d Cir 1999); Woods v. Bentsen, 889 F.Supp. 179, 184 (E.D.Pa. 1995)(Reed, J.).

FACTS

Upon consideration of the pleadings, record papers, exhibits, affidavits, and depositions, and drawing all reasonable inferences in favor of plaintiffs as required by the forgoing standard of review, the pertinent facts are as follows.

Plaintiff 7th & Allen Equities is a limited partnership, which owns commercial property located at 602-618 North 7th Street, Allentown, Lehigh County, Pennsylvania ("Property"). Defendant Hartford Casualty Insurance Company issued a Special Property Coverage Form insurance policy ("Policy") to plaintiff for the period of December 29, 2008 through December 29, 2009.

Pursuant to the terms of the Policy, defendant agreed to "pay for covered physical loss or physical damage" to the Property. However, the Policy limited coverage for property that was vacant. Specifically, the Policy provided that:

If the building where the physical loss or physical damage occurs has been vacant for more than 60 consecutive days before that physical loss or physical damage occurs:

(1) We will not pay for any physical loss or physical damage caused by any of the following even if they are Covered Causes of Loss:

(a) Vandalism;

(b) Sprinkler leakage, unless you had protected the system against freezing;

(c) Building glass breakage;

(d) Water ...


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