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Wehrenberg v. Metropolitan Property and Casualty Insurance Co.

United States District Court, W.D. Pennsylvania

April 9, 2015

EDWARD WEHRENBERG, Plaintiff,
v.
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant.

OPINION

MARK R. HORNAK, District Judge.

In this insurance coverage case, the Plaintiff, Edward Wehrenberg ("Wehrenberg"), rented his house out to a man named Alphonso Hyman, who, according to Wehrenberg, "vandalized" the house and stopped making rent payments to the mortgage company, which resulted in damage to the property, lost rental payments, foreclosure of the property, and damage to Wehrenberg's credit. The house was insured by an insurance policy ("Policy") (ECF No. 1-2, at 21-50; ECF No. 1-3), which was issued by the Defendant, Metropolitan Property and Casualty Insurance Company ("Metropolitan"). Wehrenberg filed a claim for vandalism damage with Metropolitan. Metropolitan declined to pay, so here we are.

When Wehrenberg filed this lawsuit, he brought claims solely against Metropolitan for breach of contract and bad faith. Metropolitan filed a motion for judgment on the pleadings. The Court heard oral argument during which Plaintiff's counsel requested leave to amend his Complaint, specifically to allege facts showing that the breach of contract claim was not barred by a suit limitations clause in the Policy. ECF No. 29, at 11. The Court granted Plaintiff's counsel leave to amend his Complaint generally. Id. at 33. Thereafter, the Plaintiff filed an Amended Complaint (ECF No. 22).[1] In a moment of what appears to be somewhat belated inspiration, Plaintiff also filed a Motion for Joinder of Additional Defendant (ECF No. 26)-the additional Defendant being Alphonso Hyman, who is treated as a resident of Pennsylvania (although he is in federal prison in West Virginia) and whose presence in the case would destroy diversity and wrest jurisdiction from this Court. Then, not surprisingly, a Motion to Dismiss for Lack of Jurisdiction (ECF No. 24) was filed by Plaintiff.

For the reasons that follow, the Court will deny plaintiffs Motion for Joinder of Additional Defendant, order that all references to Alphonso Hyman as a defendant be stricken from the Amended Complaint, and deny the Motion to Dismiss for Lack of Jurisdiction.

I. BACKGROUND

Here's the story as told by Mr. Wehrenberg in both the original Complaint (ECF No. 1-2) and the Amended Complaint (ECF No. 22). He owned a house located at 226 Sheryl Lane, Pittsburgh, Pa. 15221 ("226 Sheryl Lane"), which was insured by a homeowners insurance policy issued by Metropolitan. ECF No. 1-2, at ¶ 4; ECF No. 22, at ¶ 4.[2] 226 Sheryl Lane was subject to a mortgage held by Wells Fargo. ECF No. 1-2, at ¶ 5; ECF No. 22, at ¶ 7. In October 2011, Wehrenberg leased 226 Sheryl Lane to Alphonso Hyman. ECF No. 1-2, at ¶ 6; ECF No. 22, at ¶ 8. Under the agreement, Hyman was to lease 226 Sheryl Lane for five years starting in November, 2011, and Hyman was to pay each month's rent directly to the mortgage company. ECF No. 1-2, at ¶ 7; ECF No. 22, at ¶¶ 8-9. An option in the lease gave Hyman the right to purchase 226 Sheryl Lane by doing this. ECF No. 1-2, at ¶ 9; ECF No. 22, at ¶ 10.

In early 2012, Hyman stopped making his monthly rent payments, and around June 2012 Wehrenberg received notice from the mortgage company that foreclosure proceedings had begun. ECF No. 1-2, at ¶ 11-12; ECF No. 22, at ¶¶ 11-12. Wehrenberg called and emailed Hyman unsuccessfully and so he visited 226 Sheryl Lane around June 24, 2012, where he found that the locks had been changed. ECF No. 1-2, at ¶ 13-15; ECF No. 22, at ¶ 13-14. Wehrenberg looked through the windows and saw that "[i]n essence, the place was gutted done [sic] to the bare studs." ECF No. 22, at ¶ 15; ECF No. 1-2, at ¶ 16. Wehrenberg was then able to get ahold of Hyman on the phone (the next day) and told him that he (Hyman) did not have permission to gut the house or to do any work on 226 Sheryl Lane and that the property had been damaged. ECF No. 1-2, at ¶¶ 17-20; ECF No. 22, at ¶¶ 16-18. Hyman responded that he was a contractor, that the house had major structural problems that he had decided to fix and which required him to gut the house, and that he would put the house back together. ECF No. 1-2, at ¶ 21-22; ECF No 22, at ¶ 19-20.

Wehrenberg did not notify Metropolitan of this turn of events, but instead he allowed Hyman to continue his "work" on the property. ECF No. 1-2, at ¶ 23; ECF No. 22, at ¶ 21. Wehrenberg told Hyman to get the mortgage caught up and to get the house put back together as soon as possible, which Hyman did. ECF No. 1-2, at ¶ 24-25; ECF No. 22, at ¶ 22-23. In January 2013, Wehrenberg noticed that a rental payment was late and called Hyman, who assured Wehrenberg that payment would be made by January 15, 2013 and that the house was coming along. ECF No. 1-2, at ¶ 27; ECF No. 22, at ¶ 25. But Hyman never made the payment. Wehrenberg called Hyman again but found that the phone was disconnected, so Wehrenberg went to 226 Sheryl Lane and found not only that the first floor was in the same disassembled condition but that the basement and second floor had been gutted also. ECF No. 1-2, at ¶ 28-30; ECF No. 22, at ¶ 27. Three bathrooms, flooring, bedroom walls, closets, furnaces, and air conditioner had all been removed. ECF No. 1-2, at ¶ 28-30; ECF No. 22, at ¶ 27. The furnaces and air conditioners had, however, been replaced. ECF No. 1-2, at ¶ 31; ECF No. 22, at ¶ 27.

On February 28, 2013, Wehrenberg filed a claim with Metropolitan, asserting that the property had been vandalized. ECF No. 1-2, at ¶ 36; ECF No. 22, at ¶ 32. Wehrenberg says that the Metropolitan adjuster came out to take pictures of the damages and "threatened to leave the premises" almost immediately, told Wehrenberg that Metropolitan would not cover the claim, and was "short" with him (Wehrenberg). ECF No. 1-2, at ¶ 37; ECF No. 22, at ¶ 33. After that, Wehrenberg says he called Metropolitan regarding his claim but was "pushed from agent to agent and many times his phone calls were not returned." ECF No. 1-2, at ¶ 38; ECF No. 22, at ¶ 40. Wehrenberg eventually lost the house to foreclosure (though no foreclosure date was included in either the Complaint or the Amended Complaint). ECF No. 1-2, at ¶ 34; ECF No. 22, at ¶ 30. Metropolitan has never made an offer of settlement under the policy. ECF No. 1-2, at ¶ 46-49; ECF No. 22, at ¶ 47-49.

On September 10, 2014, Wehrenberg filed this lawsuit in the Court of Common Pleas of Allegheny County, Pennsylvania. ECF No. 1, at ¶ 1. Metropolitan was served on September 30, 2014. Id. at ¶ 3. Metropolitan removed the case on October 29, 2014, pursuant to 28 U.S.C. § 1332 on the basis of diversity of citizenship jurisdiction. Id. at ¶¶ 4-7. Metropolitan filed an Answer on November 5, 2014, ECF No. 5, and Motion for Judgment on the Pleadings pursuant to Fed.R.Civ.P. 12(c) on January 9, 2015, ECF No. 13. Metropolitan argued that it could not be liable for breach of contract because the facts in the Complaint failed to allege vandalism. ECF No. 14, at 7. Metropolitan further argued that the losses are not covered because the policy contains an exclusion for "Defective, Inadequate, Faulty, or Unsound Repair, Construction, Renovation or Remodeling." Id. at 11. Because it says that no insurance coverage exists to cover the losses, Metropolitan argued that the bad faith claim must also be dismissed. Id. at 13. Finally, Metropolitan claimed that, because the policy's one-year suit limitation clause bars any actions not brought within twelve months of the loss, Wehrenberg's Complaint was filed six months late and was therefore time-barred. Id. at 13-14.

The Court heard oral argument on Metropolitan's Rule 12(c) Motion on February 4, 2015. During the argument, the Court asked Plaintiffs counsel why the suit limitations clause did not bar the breach of contract claim as a matter of law.[3] ECF No. 29, at 10. Plaintiff's counsel responded that waiver and estoppel should prevent the application of the suit limitations clause at the Rule 12(c) stage.[4] Id. While Plaintiff's Response to the Motion for Judgment on the Pleadings generically alluded to these doctrines, it offered no backup for their application, ECF No. 16, at 15, so the Court asked why the facts indicating that such principles apply in this case were not pled in the Complaint or why Plaintiff had not moved to file an Amended Complaint to include them. Id. at 11. Plaintiff's counsel's response was to then make an oral motion for leave to file an Amended Complaint, which the Court granted. Id. at 11, 30-32.[5]

Wehrenberg then filed an Amended Complaint (ECF No. 22); a Motion to Amend/Correct the Amended Complaint in which he seeks to change a few typographical and other errors (ECF No. 23); a Motion for Joinder of Additional Defendant (ECF No. 26) and accompanying brief (ECF No. 27); and a Motion to Dismiss for Lack of Jurisdiction (ECF No. 24) and accompanying brief (ECF No. 25). Metropolitan filed a brief in opposition to Wehrenberg's Motion for Joinder (ECF No. 32) and a brief in opposition to Wehrenberg's Motion to Dismiss for Lack of Jurisdiction (ECF No. 33). Wehrenberg filed a reply to these briefs (ECF No. 34). The Court has considered all pending Motions and supporting documents, along with the matters laid out in the prior papers of record and at oral argument.

II. STANDARD OF REVIEW

"A plaintiff generally may join defendants in an action if the plaintiff (1) asserts a right to relief arising out of the same transaction or occurrence, and (2) any question of law or fact common to all defendants will arise in the action.'" Hayden v. Westfield Ins. Co., 586 F.Appx. 835, 839 (3d Cir. 2014) (quoting Fed.R.Civ.P. 20(a)(2)(A)-(B)). But section 1447(e) provides: "If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject ...


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