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Armand & Mary Correnti v. Merchants Preferred Insurance Co

January 31, 2013

ARMAND & MARY CORRENTI, PLAINTIFFS,
v.
MERCHANTS PREFERRED INSURANCE CO., DEFENDANT.



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

MEMORANDUM

Plaintiffs Armand and Mary Correnti allege that their insurer, Defendant Merchants Preferred Insurance Company, failed fully to indemnify Plaintiffs' claim for $104,749.77 in home repairs. (Doc. No. 1, Ex. A.) Merchants moves for summary judgment. (Doc. No. 9.) Because I conclude that Plaintiffs failed to comply with required appraisal procedures, I will grant the Motion.

I. BACKGROUND

A.The Policy

Plaintiffs reside in Bensalem, Pennsylvania. (Doc. No. 10 at 11.) In October 2010, Plaintiffs renewed their Merchants home insurance policy. (Doc. No. 9, Ex. B at 39.) The Policy includes an appraisal clause that provides in pertinent part: "If you or we fail to agree on the amount of loss, either may demand an appraisal of the loss." (Id.) (emphasis added). The Policy also includes a legal action clause precluding Plaintiffs from bringing a coverage lawsuit against Merchants, unless "there has been full compliance with the terms . . . of this policy." (Id. at 11.)

B.Plaintiffs' Damage Claim

On October 10, 2011, during the pendency of their Merchants Policy, Plaintiffs sustained damage to their home. (Doc. No. 11 at 28.) The loss of contents was estimated at $21,362.69; the estimated repairs were $83,387.08. (Id.) Plaintiffs hired Alliance Adjustment Group to represent them, and sought coverage for the repairs under the Merchants Policy. (Id.)

Merchants acknowledged coverage, and sent two inspectors to examine the residence and prepare an estimate of the damage. (Id.at 9.) They estimated that home repairs would cost $21,897.17, and the lost contents $5,493.00. (Id. at 10.) In accordance with that estimate, on March 23, 2011, Merchants sent Plaintiffs two checks in those amounts. (Id.) Because insurer and insured disagreed as to the loss amount, Merchants included with the checks a letter calling for an appraisal as required in the Policy. (Id.)

Inexplicably, Plaintiffs refused to participate in the appraisal process, and brought suit against Merchants in the Philadelphia Common Pleas Court for breach of contract and bad faith. (Id. at 8.) On November 7, 2012, Merchants removed to this Court, invoking diversity jurisdiction. (Doc. No. 1); 28 U.S.C. § 1332 (2005). Merchants now moves for summary judgment, arguing that Plaintiffs impermissibly brought suit without first participating in the appraisal process. (Doc. No. 9.) I agree.

II. LEGAL STANDARDS

Both Parties correctly note that Pennsylvania law governs this dispute. (Doc. No. 9 at 13); (Doc. No. 10 at 13); Regents of the Mercersburg Coll. v. Republic Franklin Ins. Co., 458 F.3d 159, 163 (3d Cir. 2006) (an insurance contract is governed by the law of the state in which the contract was made).

A.Summary Judgment

I may grant summary judgment "if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party must initially show the absence of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is material only if it could affect the result of the suit under governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). I "must view the facts in the light most favorable to the non-moving party," and make every reasonable inference in that party's favor. Hugh v. Butler County Family YMCA, 418 F.3d 265, 267 (3d Cir. 2005). If, after making all reasonable inferences in favor of the non-moving party, I ...


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