United States District Court, W.D. Pennsylvania
WILLIAM P. LONG, et. al. Plaintiffs,
UNITED FARM FAMILY INSURANCE COMPANY, Defendant.
Paradise Baxter Magistrate Judge 
action arises out of an insurance policy issued by the
Defendant United Farm Family Insurance Company
(“UFF” or “Defendant”) to Plaintiffs
William and Susanne Long, husband and wife (“Mr.
Long” and “Mrs. Long, ” collectively
“Mr. and Mrs. Long”) covering losses regarding
their residence. Mr. and Mrs. Long instituted this action in
federal court against UFF by original Complaint filed on
December 17, 2015 (ECF No. 1), alleging that Defendant's
handling of two separate losses under the insurance policy
was in bad faith in violation of 42 Pa.C.S.A. § 8371
(Count I) and was in breach of the implied covenant of good
faith and fair dealing (Count II). Subsequently, with consent
of UFF, (ECF No. 14), Mr. and Mrs. Long filed an Amended
Complaint on April 26, 2016, with the same two counts. (ECF
No. 15). Neither the Complaint nor the Amended Complaint
attempted to state any claim on behalf of their adult
daughter, Andrea Long (“Ms. Long” or
“Andrea”), who resided with them. On June 1,
2016, Mr. and Mrs. Long filed a motion and amended motion
pursuant to Federal Rule of Civil Procedure 20(a) to join Ms.
Long as party-plaintiff in this action, (ECF Nos. 26 and 28),
asserting that Ms. Long resided in and continued to reside in
the home covered by the policy, that Ms. Long's claim for
physical and emotional distress arose out of the same
transactions, occurrences or series of transactions or
occurrences as the two casualty losses on which the Amended
Complaint was based, and that Ms. Long's claim presented
common questions of law and fact, and therefore, permissive
joinder would minimize judicial waste and promote judicial
economy. (ECF No. 28). UFF opposed the joinder and argued, in
part, that any claim by Ms. Long would be untimely. (ECF No.
29). Noting its broad discretion, on July 22, 2016, the Court
granted the motion to join Ms. Long (ECF No. 34), but also
indicated that it was without prejudice to Defendant to raise
the arguments on a dispositive motion. As a result, the
Second Amended Complaint was filed on July 27, 2016, (ECF No.
25), including a claim under Count III by Ms. Long for breach
of the implied covenant of good faith and fair dealing
regarding the insurance policy. (ECF No. 35 at ¶¶
130-134). On August 16, 2016, UFF filed its present motion to
dismiss. (ECF No. 37).
considering the complaint (Docket No. 35), UFF's motion
to dismiss and brief in support, (Docket Nos. 37 and 38), and
Ms. Long's response in opposition, (Docket No. 47), the
Court will grant the motion to dismiss Count III, (Docket No.
37), with leave to amend.
following well pleaded facts, taken from the Second Amended
Complaint, will be taken as true in the motion to dismiss
context. Erickson v. Pardus, 551 U.S. 89, 94 (2007).
Long, an adult, lived with her parents, Mr. and Mrs. Long, in
their home in Russell, PA (“the residence”).
(Docket No. 35 ¶¶ 1, 2). UFF issued a policy of
insurance (“policy”) to Mr. and Mrs. Long
insuring against risk of loss to the residence and household
contents and providing for living expenses in the event of
certain perils regarding the residence. (Docket No. 35
¶¶ 7, 9).
policy contains two provisions addressing “Suit Against
Us.” One provision is located under the section
addressing “Property Conditions I, II, III and
IV” and states:
6.Suit Against Us. No actions can be brought
against U.S. unless YOU have complied with policy provisions
and that action is started within one (1) year after the date
of loss or damage.
No. 35-1 at 24). The other provision is located under the
section of the policy addressing “Liability Conditions
Division V, ” and states:
6.SUIT Against US. No action can be brought
against U.S. unless:
a. the INSURED had fully complied with the policy provisions;
b. the obligation of the INSURED has been determined by final
judgement or agreement signed by US.
If WE do not satisfy a judgment against YOU within thirty
(30) days of entry, for loss, damage or injury during the
life of the policy, WE can be sued for the amount of the
judgment within the coverage limits. The person who recovers
a judgment against YOU may sue US, as can anyone who lawfully
shares in or assumes that interest.
In the event of a dispute between YOU and U.S. as to whether
there is coverage under this policy, that action must be
filed in the courts of the United States of America
(including its territories and possessions), Puerto Rico or
(ECF No. 35-1 at 32).
January 9, 2014, Mr. and Mrs. Long discovered that they had
suffered a loss under the policy due to a broken pipe in the
heating system on the second floor of their home, which
resulted in water running down from the second floor through
the kitchen on the first floor and into the finished
basement. (Docket No. 35 ¶¶ 11, 12). On January 9,
2014, Mr. and Mrs. Long notified UFF of the property loss.
(Docket No. 35 ¶ 14). The residence, as a result,
suffered damage, including mold growth. (Docket No. 35 ¶
18). The UFF adjuster gave Mr. and Mrs. Long the name of a
“cleanup” company, however, as it turned out that
company did not service their area. (Docket No. 35
¶¶ 16-17). Mr. and Mrs. Long then engaged a company
to remediate the mold and water damage to the residence and
its contents, but promptly thereafter terminated that
company's service because they found it to be
dissatisfactory. (Docket No. 35 ¶¶ 19-20). Mr. and
Mrs. Long informed UFF that their daughter, Andrea, suffered
an immunodeficiency disorder and that the mold exposure could
be seriously detrimental to her health. (Docket No. 35 ¶
21). As a result of exposure to the mold at the residence,
Mr. and Mrs. Long, as well as Andrea Long, became physically
ill, and after Andrea sought medical attention, she was
informed by her doctor that remaining in the residence was
dangerous to her health. (Docket No. 35 ¶¶ 22-23).
Accordingly, Mr. and Mrs. Long and Andrea Long temporarily
relocated elsewhere, but the exposure to a different
environment caused great distress to Mr. and Mrs. Long and
Andrea Long. and Mr. and Mrs. Long had to monitor Andrea
Long's health closely and frequently seek medical
attention and care for her as a result. (Docket No. 35
¶¶ 34-35). During the process of addressing the
loss, UFF representatives performed various inspections of
the residence, but did not inspect the contents. (Docket No.
35 ¶¶ 25, 26, 42-43).
meantime, Mr. and Mrs. Long had mold remediation estimates
prepared by Ahold of Mold and UFF attributed the work to be
performed by Ahold of Mold for mold remediation, water damage
remediation and mold testing and analysis to Mr. and Mrs.
Long's mold loss claim, which estimates were in excess of
the mold loss cap of $15, 000.00. (Docket No. 35 ¶¶
38, 41). Mr. and Mrs. Long and their insurance company
disputed the appropriate estimate as to the cost of repairs
to the residence as a result of the water loss, and Mr. and
Mrs. Long engaged National Fire Adjusters
(“NFA”), a public adjusting company, regarding
the dispute. (Docket No. 35 ¶¶ 38, 41). UFF issued
various checks to pay for repairs and living expenses during
the loss and repair. (Docket No. 35 ¶ 50). On March 28,
2014, Mr. and Mrs. Long requested an extension to file proofs
of loss, but the extension was denied. (Docket No. 35
April 3, 2011, NFA, on behalf of Mr. and Mrs. Long, provided
UFF with signed and sworn proofs of loss by Mr. and Mrs. Long
for the residence, including the mold loss, contents loss,
and loss in the form of additional living expense they
incurred as part of their property loss claim under the
insurance policy. (Docket Nos. 35 ¶ 55; 35-16 and 35-17
(Ex. 15)). UFF did not provide a written acceptance or
written denial of Mr. and Mrs. Long's proof of loss
within fifteen working days after UFF received it. (Docket
No. 35 ¶ 56). On April 14, 2014, UFF stopped making
payments for additional living expenses and Mr. and Mrs. Long
with Andrea Long moved back to the residence, living there
and in a camper parked on the premises next to the residence.
(Docket No. 35 ¶¶ 58, 59).
on May 5, 2014, a fire occurred at the residence, originating
in the basement and a cause and origin investigator
determined that the fire was accidentally started in a
basement fixture with pooled water likely caused by the
January 9, 2014 incident. (Docket No. 35 ¶¶ 68,
72). Mr. and Mrs. Long reported their loss and UFF
acknowledged receipt of their claim. (Docket No. 35
¶¶ 69, 70). On May 15, 2014, Mr. and Mrs. Long
through NFA requested an advance for the content loss and for
additional living expenses, (Docket Nos. 35 ¶ 77;
35-22), which UFF denied on May 18, 2014. (Docket No. 35
¶¶ 82). Mr. and Mrs. Long then engaged present
counsel to represent them regarding the fire loss claim and
they submitted to examination under oath by UFF on June 16,
2014. (Docket No. 35 ¶¶ 84, 87). On July 9, 2014,
as with the water loss. Mr. and Mrs. Long submitted to UFF
signed and sworn proofs of loss regarding the fire. (Docket
No. 35 at ¶ 90; 35-26 (Ex. 24)). Neither Andrea's
name nor signature appears anywhere on the sworn proofs of
loss submitted by Mr. and Mrs. Long. There likewise is no
factual allegation in the Second Amended Complaint or
indication in the attachments thereto that Andrea Long ever
submitted any claim of loss for coverage by UFF.
August 14, 2014, Mr. and Mrs. Long demanded appraisal of the
water, mold and fire loss, and offered to afford UFF
additional time to respond so that UFF could meet with NFA
and attempt a resolution of all the outstanding matters.
(Docket Nos. 35 ¶ 92; 35-27 (Ex. 25)). However, between
August 14, 2014 and September 9, 2014, UFF did not agree to
meet with an NFA representative, did not attempt to come to
an agreement of value in dispute, and did not provide a
written response to Mr. and Mrs. Long's sworn proofs of
loss. (Docket No. 35 ¶¶ 93). On September 9, 2014,
Mr. and Mrs. Long provided UFF with their signed sworn proofs
of loss and inventory of the fire contents loss claim in the
amount of the limits of insurance, and counsel for Mr. and
Mrs. Long informed UFF's counsel that they had not
responded to the August 14, 2014 appraisal demand. (Docket
Nos. 35 ¶¶ 94, 95; 35-28, 35-29 (Exhibit 26)). UFF
then responded on September 9, 2014, by indicating a hold was
placed on the items listed in the contents proof of loss
until documented, accounted and confirmed, and UFF also
responded on September 15, 2014 by nominating its appraiser.
(Docket No. 35 ¶¶ 96, 97). On October 1, 2014, UFF
inquired as to the contents that remained in the home after
the water loss, (Docket No. 35 ¶ 98), and on October 3,
2014, first inspected the fire damaged contents. (Docket No.
35 ¶ 99). Examination of Mr. and Mrs. Long under oath
was completed on October 8, 2014. (Docket No. 35 ¶ 100).
On October 13, 2014, Mr. and Mrs. Long requested through NFA:
that UFF resolve the contents and additional living expense
portion of their fire claim; that UFF provide a reasonable
and suitable advance for additional living expense so Mr. and
Mrs. Long could establish a reasonable living environment for
their family; and that UFF provide an advance on the contents
loss so they could purchase winter clothing. (Docket Nos. 35
¶ 101; 35-35). UFF's assigned adjuster indicated
that he would respond by October 15, 2014, and then on
October 15, 2014 indicated to NFA that a formal letter would
be emailed and sent the following morning. (Docket No. 35
¶¶ 102, 103). Then on October 16, 2014, by letter
dated October 14, 2014, UFF indicated regarding the fire loss
that it was denying the entire contents proof of loss except
for items in the immediate vicinity of the fire, all
structure loss beyond the estimate of $50, 315.93 and any
additional living expense advance, and indicated that the
remainder of any such claim would be determined through
appraisal. (Docket No. 35 ¶ 105).
additional advance for living expenses, Mr. and Mrs. Long, as
well as their daughter Andrea Long, continued to live in an
unfinished garage at the residence premises and utilized
their camper for toilet facilities through the winter of
2014-2015. (Docket No. 35 ¶ 106). Mr. William Long and
Ms. Andrea Long became physical ill and sought medical
attention based on the living conditions and Mr. and Mrs.
Long and Andrea Long purportedly suffered great distress as a
result of the living environment. (Docket No. 35 ¶¶
October 17, 2014, Ahold of Mold submitted to UFF a
remediation estimate for heavy smoke infiltration of the wall
and ceiling cavities in the residence and provided an
estimate for tear out beyond the immediate vicinity of the
fire, which UFF denied as to estimates beyond tear out in the
affected room where the fire originated. (Docket No. 35
¶¶ 109, 110). Mr. and Mrs. Long filed suit on
January 6, 2015, in the court of common pleas and the parties
submitted all of the claims to appointed appraisers. (Docket
No. 35 ¶¶ 111-112). On February 26, 2015, the
appraisers entered an award on both the water loss and fire
loss claims submitted by Mr. and Mrs. Long, (Docket No. 35
¶ 113), and UFF paid the award minus amounts previously
paid. (Docket No. 35 ¶¶ 114, 116). Ultimately,
UFF's payments on the ...