United States District Court, E.D. Pennsylvania
WUGNET PUBLICATIONS, INC. c/o JOEL DIAMOND
PEERLESS INDEMNITY INSURANCE COMPANY, a division of OHIO CASUALTY, a member of the Liberty Mutual Group
present case, plaintiff Wugnet Publications, Inc. alleges
both breach of contract and bad faith arising out of the
denial of insurance coverage by defendant Peerless Indemnity
Insurance Company. The parties have filed cross-motions for
summary judgment. For the following reasons, I will deny
plaintiff's motion for summary judgment, grant
defendant's motion for summary judgment and enter
judgment in favor of defendant on the entire complaint.
Wugnet Publications is a Pennsylvania corporation that
formerly conducted business at 104 Gayley Street, Media,
Pennsylvania 19063. Def.'s Mot. Summ. J., ECF No. 10, Ex.
A, ¶ 1. Plaintiff's co-tenant, and the principal
occupant at that property, was the Democratic Committee of
Delaware County (“DCDC”). During the relevant
time period in this case, the property was covered by a
commercial protector business owner's policy issued to
DCDC by defendant Peerless Indemnity Insurance Company.
Id., Ex. C.
September 2007, plaintiff decided to cease doing day-to-day
business at 104 Gayley Street. In a new lease executed by
DCDC and its landlord, Field House Properties, DCDC agreed to
lease the premises for $800 per month. Id., Ex. A,
¶ 3; Pl.'s Mot. Summ. J., ECF No. 11, Ex. 4. In an
addendum to the lease agreement, signed only by DCDC and
Field House Properties, DCDC was to reduce its rent by $100
per month in exchange for allowing plaintiff to continue
receiving mail and other correspondence at the property.
Pl.'s Mot. Summ. J., ECF No. 11, Ex. 1. In addition, DCDC
would permit plaintiff to store its corporate documents and
related assets in a secured four-drawer filing cabinet on the
premises and would keep the cabinet and its contents safe and
secure for plaintiff. Id.; Def.'s Mot. Summ. J.,
ECF No. 10, Ex. A, ¶ 4.
2010, the chairman of DCDC was replaced by David Landau,
Esquire, who directed that DCDC's headquarters at 104
Gayley Street be cleaned and reorganized. Def.'s Mot.
Summ. J., ECF No. 10, Ex. A, ¶ 5. As part of this
reorganization, agents and employees of DCDC, unaware of the
importance of the contents of plaintiff's four-drawer
filing cabinet, disposed of those items in the public trash.
Id. Plaintiff discovered DCDC's mistaken
disposal of the filing cabinet contents in January 2011 and
immediately reported it to Mike Powers, treasurer of DCDC.
Id. ¶ 6; Pl.'s Mot. Summ. J., ECF No. 11,
Ex. 8. Plaintiff's accountant reconstructed the contents
of the four-drawer filing cabinet and prepared a report
valuing the intrinsic value of the cabinet's contents at
$262, 045. Pl.'s Mot. Summ. J., ECF No. 11, Ex. 9.
defendant had issued an insurance policy covering the
property, plaintiff made several informal attempts to discuss
settlement of the claim with Judith Kraut, defendant's
claim specialist. Def.'s Mot. Summ. J., ECF No. 10, Ex.
11. Ms. Kraut told its insured, DCDC, that plaintiff had
refused to submit the necessary documentation for a
first-party claim. Id. In addition, she noted that
the assigned adjuster, Chris Pare, had already found that the
policy provided no coverage for the loss under the
third-party liability provisions. Id. Indeed, Mr.
Pare had previously explained to DCDC, in an August 16, 2011
letter, that the policy did not cover plaintiff's loss as
third-party liability due to a provision excluding from
coverage any damage to a third-party's property in the
“care, custody or control” of the insured.
Def.'s Mot. Summ. J., ECF No. 10, Ex. D.
on January 31, 2012, plaintiff made a claim of $262, 045 to
defendant, as DCDC's insurer. Id., Ex. H. When
defendant stated that the policy had a $100, 000 limit on
first-party coverage, id., Ex. I, plaintiff's
counsel sent a letter on February 22, 2012 explaining that it
brought its claim under the policy's third-party, or
liability, coverage rather than first-party coverage.
Pl.'s Mot. Summ. J., ECF No. 11, Ex. 12. Plaintiff's
attorney went on to assert that he was preparing suit papers
against DCDC and, when he obtained judgment in excess of the
$100, 000 coverage, he would ask DCDC to assign to plaintiff
the right to sue defendant for insurance bad faith.
Id. Defendant then promptly contacted DCDC and noted
that plaintiff does “not wish to comply with the
requirements set forth under your first party property
coverage and intend[s] to pursue this as a third party
liability claim. It is my understanding our liability
department previously reviewed the third party liability
matter . . . and issued a denial letter on that claim.”
Def.'s Mot. Summ. J., ECF No. 10, Ex. K.
July 8, 2013 letter to DCDC, Mr. Pare acknowledged receipt of
a lawsuit filed by plaintiff against the DCDC in the Court of
Common Pleas of Delaware County, Pennsylvania. Id.,
Ex. D. Mr. Pare again reiterated that DCDC's failure to
safely and securely keep plaintiff's property was
excluded from third-party liability coverage under the
policy. Id. Mr. Pare declined to respond to the
lawsuit, but requested any additional documentation that DCDC
deemed germane to the claim. Id.
December 28, 2015, DCDC assigned to plaintiff the right to
bring legal action against defendant for both indemnity on
plaintiff's claim and insurance bad faith based on
defendant's failure to defend or indemnify DCDC under the
terms of the policy of insurance. Pl.'s Mot. Summ. J.,
ECF No. 11, Ex. 14. Thereafter, on June 16, 2016, plaintiff
filed the instant action against defendant in the Court of
Common Pleas of Delaware County. Def.'s Mot. Summ. J.,
ECF No. 10, Ex. A. Defendant removed the case to this Court
and filed an answer and affirmative defenses on August 12,
2016. Id., Ex. B.
15, 2017, both parties filed motions for summary judgment.
Dkt. Nos. 10, 11. Responses were filed on May 30, 2017, Dkt
Nos. 12, 13, defendant filed a reply brief on June 6, 2017,
Dkt No. 14, and plaintiff filed a reply brief on June 13,
2017. Dkt. No. 15.
judgment is proper “if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that
there is no genuine issue as to any material fact and that
the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(c)(2). A factual dispute is
“material” only if it might affect the outcome of
the case. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). For an issue to be “genuine, ” a
reasonable fact-finder must be able to return a verdict in
favor of the non-moving party. Id. To establish
“that a fact cannot be or is genuinely disputed,
” a party must:
(A) cit[e] to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations
(including those made for purposes of the motion only),
admissions, interrogatory answers, or other materials; or
(B) show[ ] that the materials cited do not establish the
absence or presence of a genuine dispute, or that an adverse
party cannot produce admissible evidence to support the fact.
Fed. R. Civ. P. 56(c) (1).
summary judgment, the moving party has the initial burden of
identifying evidence that it believes shows an absence of a
genuine issue of material fact. Conoshenti v. Pub. Serv.
Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir.
2004). It is not the court's role to weigh the disputed
evidence and decide which is more probative or to make
credibility determinations. Boyle v. Cnty. of
Allegheny, 139 F.3d 386, 393 (3d Cir. 1998), citing
Petruzzi's IGA Supermkts., Inc. v. Darling-Del. Co.
Inc., 998 F.2d 1224, 1230 (3d Cir. 1993). Rather, the
court must consider the evidence, and all reasonable
inferences that may be drawn from it, in the light most
favorable to the non-moving party. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986), citing United States v. Diebold, Inc., 369
U.S. 654, 655 (1962); Tigg Corp. v. Dow Corning
Corp., 822 F.2d 358, 361 (3d Cir. 1987).
the moving party must establish an absence of a genuine issue
of material fact, it need not “support its motion with
affidavits or other similar materials negating the
opponent's claim.” Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). It can meet its
burden by “pointing out . . . that there is an absence
of evidence to support the nonmoving party's
claims.” Id. at 325. If the non-moving party
“fails to make a showing sufficient to establish the
existence of an element essential to that party's case,
and on which that party will bear the burden at trial,
” summary judgment is appropriate. Id. at 322.
The adverse party must raise “more than a mere
scintilla of evidence in its favor” and cannot survive
by relying on unsupported assertions, conclusory allegations,
or mere suspicions. Williams v. Borough of W.
Chester, 891 F.2d 458, 460 (3d Cir. 1989). The existence
of some evidence in support of the non-movant will not be
adequate to support a denial of a motion for summary
judgment; there must be enough evidence to enable a jury to
reasonably find for the non-movant on that issue.
Anderson, 477 U.S. at 249- 50.
these summary judgment rules apply no differently where there
are cross-motions pending. Lawrence v. City of
Phila., 527 F.3d 299, 310 (3d Cir. 2008). As stated by
the Court of Appeals, “‘[c]ross-motions are no
more than a claim by each side that it alone is entitled to
summary judgment, and the making of such inherently
contradictory claims does not constitute an agreement that if
one is rejected the other is necessarily justified or that
the losing party waives judicial consideration and
determination whether genuine issues of material fact
exist.'” Id., quoting Rains v. Cascade
Indus., Inc., 402 F.2d 241, 245 (3d Cir. 1968).
Breach of Contract Claim
first cause of action alleges that defendant's denial of
insurance coverage under the third-party provisions of the
policy constitute a breach of contract. Both parties seek
summary judgment on that claim. As I find that the insurance
policy unequivocally excludes plaintiff's coverage
request, I will ...