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Brown v. Everett Cash Mutual Insurance Co.

Superior Court of Pennsylvania

March 10, 2017


         Appeal from the Order September 4, 2015 In the Court of Common Pleas of Greene County Civil Division at No(s): A.D. No. 1218 of 2008.



          LAZARUS, J.

         Joseph and Sabrina Brown, h/w, (collectively, the Browns) appeal from the order, entered in the Court of Common Pleas of Greene County, granting summary judgment in favor of Appellees, Everett Cash Mutual Insurance Company, Dennis Holsinger (as agent and/or employee of Everett Cash Mutual), and William T. Scott (collectively, Everett Cash). After careful review, we reverse and remand.[1]

         Sabrina Brown and her father, William T. Scott ("Scott"), [2] owned a farm home ("residence") in Carmichaels, Pennsylvania, as joint tenants with a right of survivorship. The residence was covered by an insurance policy issued by Everett Cash. Sabrina and Scott were the named insureds on the policy. In July 2007, the residence burned to the ground as a result of an accidental electrical fire; the home was deemed a "total loss." The fire qualified as a covered loss under the insurance policy.[3]

         In January 2008, Dennis Holsinger, an adjuster on behalf of Everett Cash, prepared an itemized breakdown of losses, costs and depreciation, less the policy deductible, to arrive at an actual cash value of the residence. Specifically, Holsinger valued the replacement cost of the house at $100, 269.39, with a 35% depreciation of $35, 094.29, for an actual cash value of $65, 175.10. With an additional payment of $6, 000.00 for debris removal minus the insureds' $250.00 deductible and a $9, 456.68 contribution to the Cumberland Township Fire Escrow Fund, Everett Cash issued the insureds a check for $61, 468.42 in January 2008. Under the policy the insurance company was required to issue reimbursement checks payable to both Sabrina and Scott; Scott refused to sign the check. As a result, the first reimbursement check expired 180 days after its issuance. Everett Cash ultimately requested a stop-payment order on the check and reissued another check, in October 2008, to Sabrina and Scott for the same amount.

         In addition to a check for the actual cash value of the house, Everett Cash also paid the Browns four months of living expenses totaling $1, 800. In a letter dated November 7, 2007, Everett Cash denied the insureds' request for additional living expenses under the policy because the residence had not been rebuilt in a reasonable amount of time following the fire. Specifically, Everett Cash denied the request based on the following policy language:

         Coverage D - Additional Living Costs and Loss of Rent

"We" pay the necessary and reasonable increase in living costs "you" incur to maintain the normal standard of living of "your" household if a part of the "insured premises" is made unfit for use by an insured loss. "We" pay only for the period of time reasonably required to make the "insured premises" fit for use or until "your" household is permanently relocated, whichever is less.
2. Additional Living Costs - If the "insured premises" is made unfit for use for more than one month, covered costs are paid on a monthly basis. "You" must give "us" proof of such costs.

Everett Cash Mutual Farmowners Policy, AAIS Form FO-1, at 5; FO-20, at 6 (emphasis added).

         On October 30, 2008, the Browns filed a civil complaint against Everett Cash raising claims of breach of contract, bad faith, civil conspiracy and respondeat superior liability. In addition to their claims that Everett Cash breached the insurance agreement and denied them policy benefits in bad faith, the Browns also alleged that Scott entered into a conspiracy with Everett Cash's adjuster, Holsinger, to pay Scott 100% of the proceeds of the loss.

         The trial court ultimately determined that Everett Cash was entitled to summary judgment, specifically concluding that because the Browns failed to agree on how to use the insurance proceeds, they were at fault for not rebuilding within a reasonable amount of time as required under the policy provisions.[4] With regard to the Browns' bad faith claim, the court determined that the claim failed, as a matter of law, because the Browns did not "provide any evidence that the Defendants' actions were motivated by self-interest or ill-will. [Rather, ] Plaintiff's claims were denied because they failed to satisfy the prerequisites for coverage[.]" Trial Court Opinion, 9/4/15, at 8.

         On October 5, 2015, the Browns filed a notice of appeal from the trial court's summary judgment order. They present one issue for our consideration: Was it appropriate for the trial court to grant summary judgment where issues of fact, issues of law and compliance with an insurance policy are left disputed and unresolved?

Th[e] scope of review of an order granting summary judgment is plenary. Our standard of review is clear: the trial court's order will be reversed only where it is established that the court committed an error of law or clearly abused its discretion. Summary judgment is appropriate only in those cases where the record clearly demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. The reviewing court must view the record in the light most favorable to the nonmoving party, resolving all doubts as to the existence of a genuine issue of material fact against the moving party. When the facts are so clear that reasonable minds cannot differ, a trial court may properly enter summary judgment.

Valentino v. Phila. Triathlon, LLC, 2016 PA Super 248 at *15 (Pa. Super. filed Nov. 15, 2016) (citing Atcovitz v. Gulph Mills Tennis Club, Inc., 812 A.2d 1218, 1221-22 (Pa. 2002)). Moreover,

the non-moving party must adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof such that a jury could return a verdict in his favor. Failure to adduce this evidence establishes that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.

Ertel v. Patriot-News Company, 674 A.2d 1038, 1042 (Pa. 1996).

         When reviewing an insurance contract on appeal, we note that our Court's scope of review is plenary. Cresswell v. Pennsylvania National Mutual Casualty Ins. Co., 820 A.2d 172 (Pa. Super. 2003). Moreover,

[i]n interpreting the terms of an insurance contract, the appellate court examines the contract in its entirety, giving all of the provisions their proper effect. The court's goal is to determine the intent of the parties as exhibited by the contract provisions. In furtherance of its goal, the court must accord the contract provisions their accepted meanings, and it cannot distort the plain meaning of the language to find an ambiguity. Moreover, it will not find a particular provision ambiguous simply because the parties disagree on the proper construction; if possible, it will read the provision to avoid an ambiguity.

Burton v. Republic Ins. Co., 845 A.2d 889, 893 (Pa. Super. 2004).

         Replacement Cost v. Actual Cash Value

         The Browns assert that they were entitled to full replacement value, not just actual cash value, under the Everett ...

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