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Moran Industries, Inc. v. Netherlands Insurance, Co.

United States District Court, M.D. Pennsylvania

February 19, 2014



MATTHEW W. BRANN, District Judge.

Before the Court is The Netherlands Insurance Company's ("Defendant" or "Netherlands") Motion for Summary Judgment (ECF No. 14) on the Complaint (ECF No. 1, Ex. 1) filed by Moran Industries, Inc. ("Plaintiff" or "Moran"). Moran initially filed the Complaint in the Court of Common Pleas of Lycoming County, Pennsylvania, and the Defendant removed the action to this Court on July 25, 2012, pursuant to 28 U.S.C. § 1441 and 28 U.S.C. § 1446 (ECF No. 1).

Moran's Complaint alleges two state-law counts: one count of assumpsit and one count of bad faith insurance practices. Def.'s Notice Removal, Ex. 1, at 4-5, July 25, 2012, ECF No. 1 [hereinafter "Pl.'s Compl."]. After filing an Answer with affirmative defenses (ECF No. 4) and completing some discovery, the Defendant filed a Motion for Summary Judgment on January 7, 2013 (ECF No. 14). Netherlands asserts it is entitled to judgment in its favor as a matter of law on both counts. Def.'s Mot. Summ. J., Jan. 7, 2013, ECF No. 14. The matter has been fully briefed and is ripe for disposition.

In accordance with the following reasoning, the Defendant's Motion for Summary Judgment is denied in part and granted in part. Moran's bad faith claim is dismissed.


Moran Industries, Inc. is a Pennsylvania corporation with principle offices in Watsontown, Northumberland County, Pennsylvania. Pl.'s Compl., ¶ 1. Moran owns a building ("the Property") located at 202 East Penn Street, Watsontown, Pennsylvania. The Property sustained a fire on August 19, 2009. Def.'s Statement Facts ¶ 6, Jan. 7, 2013, ECF No. 16 [hereinafter Def.'s SOF].

The Property was a warehouse Moran leased to a tenant, who was authorized to do work in the space. In the course of the work, the siding near the roof line caught on fire. Def.'s SOF, ¶ 11. The fire department arrived and extinguished the fire, but not before the building sustained damage. Def.'s SOF, ¶ 12.

Prior to the fire, and at all times relevant hereto, Moran maintained an insurance policy on the building through The Netherlands Insurance Company. Def.'s SOF, ¶ 7; Pl.'s Statement Facts ¶ 7, Jan. 18, 2013, ECF No. 18 [hereinafter Pl.'s SOF]. Netherlands is a New Hampshire corporation with its principle place of business at 175 Berkeley Street, Boston, Massachusetts. Def.'s Ans., ¶ 2. Moran purchased the policy through Netherlands' authorized agent, Rick Williams ("Williams"). Pl.'s SOF, ¶ 10.

The Parties dispute the contents of the insurance policy on the date of the August 14, 2009 fire. Moran submits, through the sworn affidavit of its president, John D. Moran, Jr., that the policy it received from Netherlands through Williams consisted of seventy (70) pages of declarations describing the types and limits of coverage and the real estate, personalty, and persons covered. Pl.'s SOF, ¶ 7; Aff. Opp'n Mot. Summ. J., Ex. 1, ¶ 5, Jan. 25, 2013, ECF No. 21 [hereinafter Moran Aff.].

Netherlands, in contrast, alleges that the policy it provided was over two-hundred (200) pages long. Most pertinently, Netherlands alleges that the policy it provided and that Moran assented to included a limitations clause. The clause purported to require that any action brought against Netherlands under the policy be filed "within 2 years after the date on which the direct physical loss or damage occurred." Def.'s SOF, ¶ 8, Ex. C, at 195. Moran adamantly denies that this provision was ever part of the policy it received or assented to.

After the fire at the Property on August 14, 2009, Moran alleges it reported notice of the loss to its insurance agent, Williams, within twenty-four (24) hours of its occurrence. Pl.'s SOF, ¶ 10. According to the deposition of Moran's employee working on the issue, Michael Gilger ("Gilger"), however, Moran "didn't file the claim... until a year later-more than a year later." Pl.'s Aff. Opp'n Mot. Summ. J., Ex. C, Dep. Michael Gilger 106, Jan. 25, 2013, ECF No. 21-3.

Netherlands demonstrated it received a report of the claim filed on November 2, 2010, more than a year after the fire. Def.'s SOF, ¶ 10; Def.'s Reply Br. Supp. Mot. Summ. J. 1, Ex. 2, Feb. 8, 2013, ECF No. 23-2 [hereinafter Def.'s Reply Br.]. The claim was then assigned to Netherlands' insurance adjuster Laura Jo Gallagher ("Gallagher"), who spoke with Gilger on November 4, 2010, two days after the claim was submitted to Netherlands. Def.'s SOF, ¶ 10. On November 12, 2010, Gallagher inspected the property with Gilger. The parties disagree as to the extent of the damage.

The parties engaged in various communication exchanges to evaluate the claim in November and December of 2010. One writing Gallagher sent to Moran indicated that "no act of any company representative while investigating, negotiating settlement of the claim, or defending a law suit shall be construed as waiving any company rights." Def.'s SOF, ¶ 21.

Netherlands hired a building consultant, Frank Antonucci ("Antonucci"), who inspected the property on December 9, 2010. Antonucci estimated repair costs to patch a 1000 square foot section of the roof to be between $40, 000 to $45, 000. Id . ¶¶ 23, 25. Moran received a copy of the estimates on or about January 26, 2011. Id . ¶ 26. Netherlands also made payment to Moran based on those estimates in the amount of $32, 603, which is a figure representing repair costs and costs Moran incurred cleaning, less the $25, 000 deductible under the policy. Def.'s SOF, ¶ 27.

Moran disputes both the validity of the assessment and the square footage of the roof that needed repair. Moran contends the entire section of the roof needed to be replaced, rather than a portion merely repaired. Def.'s SOF, ¶ 31. Attempting to address this dispute, the Parties engaged in telephone conversations and e-mail correspondence during the first several months of 2011.

After approximately two months of unsuccessful communication between the parties attempting to arrange a meeting between their roofing consultants, in early May 2011, Antonucci spoke with a roofing consultant Moran hired, George Hutchinson ("Hutchinson"). The parties dispute the outcome of this conversation. Moran maintains that Antonucci manifested agreement with Hutchinson's assessment that the entire slope of the roof needed to be replaced. Def.'s SOF, ¶¶ 34, 37; Pl.'s SOF, ¶¶ 34-35, 37. Netherlands maintains that Antonucci's position was that a repair could be done on a portion of the roof, as he initially indicated, rather than a full replacement. Def.'s SOF, ¶ 35.

Following this conversation, Gallagher spoke with Antonucci on May 16, 2011 and subsequently e-mailed Moran and Williams. Gallagher indicated that, because their consultants were not in agreement on the scope of repairs, she would hire an engineer to inspect the area of damage. Def.'s SOF, ¶ 36. On June 1, 2011 an engineering firm and an architect performed an inspection of the Property. Def.'s SOF, ¶ 38. These parties authored a report, dated June 13, 2011, that expressed the opinion that repairing the roof was feasible and suggested a replacement of approximately a 1, 125 square foot area of roofing panels. Def.'s SOF, ¶ 39. Moran disputes the validity of the report's conclusions, but not the fact that the examination occurred. Pl.'s SOF, ¶ 39.

Based on the report, Gallagher determined no further payment was due, and forwarded the report with that message to Moran on June 27, 2011. Def.'s SOF, ¶ 40. After not receiving a substantive response from Moran, Gallagher closed the file on September 26, 2011. Def.'s SOF, ¶ 42. Moran filed suit against Netherlands on June 15, 2012.


A. Preliminary Legal ...

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