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Swan Caterers, Inc. and Swan Waterfall Caterers, Inc. D/B/A Swan Caterers v. Nationwide Mutual Fire Insurance Company

November 13, 2012


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


Swan Caterers, Inc. and Swan Waterfall Caterers, Inc., d/b/a Swan Caterers (collectively "Swan Caterers"), bring this action against Nationwide Mutual Fire Insurance Company ("Nationwide") for breach of contract and acting in bad faith, a violation of 42 Pa. Cons. Stat. § 8371. Currently before me is Nationwide's motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons set forth below, Nationwide's motion for summary judgment will be granted.


As the name suggests, Swan Caterers is a catering company located in Philadelphia, Pennsylvania. Swan Caterers alleges that on January 25, 2010, its property located at 2015 South Walter Street suffered direct physical loss and damage as a result of a wind- and rainstorm. (Compl. ¶ 4.) Immediately following the storm, Swan Caterers hired Mickey's Roofing & Siding Repairs ("Mickey's Roofing") and CPR Restoration and Cleaning Services, LLC to complete emergency repair services to the roof and interior of the property. (Opp'n to Mot. for Summ. J. 2.) Swan Caterers also hired Citizens Public Adjusters ("Citizens") to serve as its public adjuster with respect to its claim. (Mot. for Summ. J. ¶ 8.) On January 28, 2010, Citizens, on behalf of Swan Caterers, contacted Nationwide and initiated a claim. (Opp'n to Mot. for Summ. J. 2.)

Nationwide assigned the claim to Ed O'Rangers, a Nationwide claims adjustor.

O'Rangers scheduled an inspection of the property for February 8, 2010. (Mot. for Summ. J. ¶ 9.) O'Rangers hired A Plus Roofing to perform an inspection of the roof prior to the February 8th inspection to determine the cause of the damage. (Id. ¶ 13.) Following its inspection, A Plus Roofing provided O'Rangers with a report that stated, "After completing our inspection of the entire roof area, we could find no direct evidence of wind or storm damage." (Id. Ex. E.) O'Rangers then conducted his scheduled inspection of the interior of the property. Subsequent to his inspection, O'Rangers wrote in Nationwide's activity log that "[a]fter reading roof report and looking at roof photo's [sic], as well as completing inspectin [sic] on interior it was determined that there was no wind or storm damage to roofing to cause interior damage . . . ." (Id. Ex. D, NW240.) In O'Rangers's opinion, the damage was the result of improperly performed prior repairs and maintenance. (Id. Ex. D., NW240; id. Ex. F.) On February 9, 2010, O'Rangers sent a letter to Swan Caterers denying the claim.

In response to the denial letter, Jerome Sacco, president of Citizens, sent a letter to O'Rangers asking for a re-inspection. (Opp'n to Mot. for Summ. J. Ex. F.) Sacco specifically asked that engineers be present at the re-inspection to investigate the cause of the damage. Sacco stated that after reviewing pictures of the roof taken by Mickey's Roofingprior to the emergency repairs, "it appears there was windstorm damage." (Id.) Nationwide acquiesced and scheduled a re-inspection of the property for February 17, 2010.*fn1 (Id. Ex. H.)

The following personnel were present for the February 17, 2010, re-inspection: Jay Masucci from Citizens; Nick Colanzi, a civil engineer/consultant hired by Citizens; Anthony Mickey Teranto, owner of Mickey's Roofing; and G.P. Lamina, Jr., a professional engineer from National Forensic Consultants, whom Nationwide hired to perform the inspection. (Id.) Swan Caterers alleges that during the inspection, Lamina stated to all present, "no problem, it's windstorm damage." (Id.) In his March 31, 2010, report to Nationwide, however, Lamina concluded that wind could not have caused the damage to the property. (Mot. for Summ. J. Ex. H, NW157-58.) On May 5, 2010, O'Rangers sent a second letter to Swan Caterers confirming the denial of the claim.

On June 16, 2010, Sacco sent a letter to Paul Lettieri, a claims director for Nationwide, alleging that the investigation had been prejudiced by O'Rangers. (Id. Ex. J, NW112.) Sacco further alleged that Lamina's report was a "blatant contradiction" of everything that he had stated during the February 17th inspection, and because "Mr. Lamina had confirmed coverage and would advise [Nationwide] that there was in fact exterior wind damage," it was unnecessary for Colanzi-Citizen's hired professional engineer-to complete his own report, which would have supported a claim of wind damage. (Id.,NW113) In his closing, Sacco stated that it was his belief that Nationwide "acted in blatant bad faith," but that he wished to speak with Nationwide "before forwarding [the] file to counsel for instigation of litigation." (Id., NW113-14.)

Nationwide claims that in response to Sacco's letter, O'Rangers contacted Lamina to discuss the alleged discrepancy between his statements at the site inspection and his formal report to Nationwide. (Mot. for Summ. J. ¶ 30.) Lamina denied making the statement. He told O'Rangers that, while on the roof, he stated it was "possible" that wind caused the damage-a possibility he ruled out after checking wind speeds for January 25, 2010. (Id.; Ex. D, NW232.) I must, of course, accept plaintiff's version for summary judgment purposes.

Sacco sent a letter to Mark Tooher of Nationwide's claims department on November 30, 2010, claiming that neither Citizens nor Swan Caterers had received any response to letters written by Citizens dated June 16, October 6, and October 12, 2010, inquiring into the investigation. (Opp'n to Mot. for Summ. J. Ex. I.) In the letter, Sacco stated that if he did not hear from Nationwide within two weeks, he would commence litigation. In response, Tooher asked Sacco to send him all pertinent information regarding the claim that Sacco had in his possession. Sacco wrote Tooher on December 28, 2010, stating that he had forwarded all information regarding the claim. (Id. Ex. J.) Sacco also sent a courtesy copy of the letter to attorney Jonathan Wheeler who, although not representing Swan Caterers at that time, was "monitor[ing] the ongoing situation." (Id.) On January 23, 2011, after review of the information and O'Rangers's discussion with Lamina, Tooher sent a letter to Sacco confirming the denial of the claim. (Id. Ex. K.)

On February 2, 2011, Sacco sent a letter to James Shank, Nationwide's property claims director, claiming that Swan Caterers' claim had been improperly denied and imploring him to assign a claims manager or director to the matter to bring it to a close. (Id. Ex. L.) Nationwide asserts that in an effort to conclude the matter it agreed to a final inspection by another independent professional engineer. (Id. ¶ 35.) Nationwide hired Jody DeMarco of Forensic Consultants of North America to investigate the property and determine the cause of damage.(Id. ¶ 36.) DeMarco conducted his investigation on March 9, 2011, with the following personnel present: Colanzi, Masucci, Teranto, O'Rangers, and Carmen D'Aquilante of Swan Caterers. (Id. Ex. L, NW276.) In his report to Nationwide, DeMarco concluded that wind was not the cause of the damage to the property. (Id. Ex. L, NW280-81.) In light of DeMarco's report, on March 31, 2011, Nationwide sent a final letter to Citizens confirming the denial of coverage. (Id. Ex. M.)

Swan Caterers filed this suit in the Court of Common Pleas for Philadelphia County on December 2, 2011. Nationwide removed to the United States District Court for the Eastern District of Pennsylvania on January 4, 2012. A mandatory arbitration hearing was held on June 13, 2012, after which a party requested ...

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