The opinion of the court was delivered by: Sitarski, M. J.
Currently pending before the Court is a motion for summary judgment filed by Defendant First Liberty Insurance Corporation (erroneously identified as "Liberty Mutual Group"), Plaintiffs' Response, and Defendant's Reply. For the following reasons, the motion will be GRANTED.
This case concerns a dispute over insurance coverage for losses resulting from a flood on March 12, 2011. Doc. No. 1, ¶ 1. Plaintiffs had entered into an insurance contract with First Liberty Insurance Company ("First Liberty"), which was in effect at the time of the flood. The instant dispute arose because First Liberty limited coverage to ten thousand dollars ($10,000) pursuant to a sump pump endorsement clause in the contract. Doc. No. 20, ¶¶ 2-19.Plaintiffs argue that the sump pump endorsement does not apply to their situation, and that full coverage is warranted under the insurance contract's general policy. Doc. No. 24, ¶ 19.
On October 12, 2011, Plaintiffs initiated this lawsuit by filing a
Complaint with the United States District Court for the Eastern
District of Pennsylvania, pursuant to 28 U.S.C. § 1332.*fn1
Doc. No. 1. The Complaint alleges causes of action for bad
faith (Count I), breach of contract and breach of covenant of good
faith and fair dealing (Count II), and violation of the Pennsylvania
Unfair Trade Practices and Consumer Protection Law (UTPCPL) (Count
III). Doc. No. 1. On December 21, 2011, First Liberty filed an Answer
and also raised affirmative defenses. Doc. No. 5.
This matter was initially assigned to District Court Judge R. Barclay Surrick. Doc. No. 1. On February 28, 2012, the parties consented to the exercise of jurisdiction by a United States Magistrate Judge under 28 U.S.C. § 636(c) andFed. R. Civ. P.73, and the matter was referred to me. Doc. No. 15. On April 20, 2012, First Liberty filed the instant Motion for Summary Judgment. Doc. No. 20. Plaintiffs filed a Response, and First Liberty filed a Reply. Doc. No. 24, Doc. No. 26. Fact discovery closed on June 1, 2012. Doc. No. 11, ¶ 1. Accordingly, the matter is now ripe for disposition.
Plaintiffs own a residential property located at 1304 Welsh Road, Ambler, Pennsylvania.
Doc. No. 20; Doc. No. 20, Ex. C at 9. On March 12, 2011, Plaintiffs woke up to find their entire basement flooded with approximately five feet of water. Doc. No. 1, ¶ 11; Doc. No. 20, Ex. C at
10. During his deposition, Plaintiff stated that he observed the water coming from the joint where the sump pump connected to the discharge pipe, and that the sump pump was the only source of water in the basement.*fn2 Doc. No. 20, ¶ 9; Doc. No. 20, Ex. C at 21, 24.
On that same day, Plaintiff Jonathan Viscounte contacted Mr. Damien Wilson ("Mr. Wilson"), of "A Quality Plumbing and Heating," for emergency repairs. Doc. No. 20, ¶ 11; Doc. No. 20, Ex. C at 26-28. After inspecting the basement, Mr. Wilson determined that a broken check valve and discharge pipe on the sump pump failed and caused the basement to flood. Doc. No. 20, ¶ 12; Doc. No. 20, Ex. D at 19.
At all relevant times, Plaintiffs were covered by a homeowners insurance policy issued by First Liberty.*fn3 Doc. No. 20, ¶ 1; Doc. No. 20, Ex. A. The insurance contract contained a sump pump endorsement that limited coverage to ten thousand dollars ($10,000) in cases of "sump pump overflow." Doc. No. 20, ¶ 2; Doc. No. 20, Ex. B. The endorsement states, in pertinent part:
For an additional premium, we cover risks of direct physical loss described in Coverage A - Dwelling and Coverage C- Personal Property described below when caused by a peril listed below, unless the loss is excluded in this policy. * * *
2. Sump Pump Overflow, meaning only direct loss to covered property caused by water which overflows or accidently discharges from within a sump pump, sump pump well, sump pump well discharge system or other type system designed to remove ...