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Valvano Realty Co. v. American Fire and Casualty Co.

United States District Court, M.D. Pennsylvania

August 26, 2019




         This matter is before the court on the plaintiffs motion to appoint an appraiser. (Doc. 20). The motion has been briefed and is ripe for a decision. For the reasons set forth below, we will grant the motion.

         I. Statement of Facts

         The plaintiff commenced this action in the Court of Common Pleas of Lackawanna County, Pennsylvania on November 16, 2016. In the complaint, the plaintiff asserts a claim for breach of contract and statutory bad faith under 42 Pa. Const. Stat. Ann. § 8371 for a fire loss that occurred on December 18, 2015, at its property located at 347 Main Street, Dickson City, Pennsylvania.

         Thereafter, the defendants removed this case to this court on February 13, 2017. (Doc. 1). By stipulation, the parties agreed that Liberty Mutual Insurance be dismissed as a defendant with prejudice. (Doc. 9; Doc. 10).

         In the complaint, the plaintiff alleges that, at the time of the fire, the plaintiff was covered by a commercial property insurance policy issued by the defendant, American Fire and Casualty Co. ("American"), Policy No. BKA (16) 56074057. The policy provided for coverage limits of $850, 113 for replacement costs and $18, 360 for rental value. The plaintiff alleges that it sustained damages in the amount of $1, 420, 580.33. Despite the plaintiffs demand for payment of the limits of the policy, American has paid the plaintiff the sum of $110, 770.35.

         The insurance policy contains an appraisal provision which provides, in part, that:

If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of the court having jurisdiction. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding.

(Doc. 26-5, at 27).

         The plaintiff alleges that it gave notice to American of its intention to invoke this provision. American maintains that a failure to pay the amount demanded by the plaintiff does not trigger the appraisal provision in the policy. American further argues that despite its requests for information regarding the specifics of the alleged loss, the plaintiff has failed to provide meaningful documentation to American to allow it to determine whether a disagreement actually exists. In response, the plaintiff maintains that it has exchanged information with defense counsel.

         On March 8, 2018, following several telephone conferences with counsel, the court stayed the action at counsel's request. We lifted the stay on April 2, 2019. (Doc. 45). We conducted a telephone conference with counsel on August 14, 2019, for the purpose of resolving a discovery dispute wherein we ordered that the plaintiff shall produce invoices and estimates for repairs to the premises on or before September 4, 2019.

         The plaintiffs motion to appoint appraiser requests that we appoint the appraiser on behalf of American so that the appraisers may thereafter appoint the umpire and allow the appraisal process to commence.

         II. Legal Standards

         It is well-established law in Pennsylvania that "in order for a case to be appropriate for appraisal, there are generally two conditions that must be met: (1) the defendant has admitted liability for the loss; and (2) there must be a dispute only as to the dollar amount of the loss." Ice City, Inc. v. Ins. Co. of N. Am.,314 A.2d 236, 240 (Pa. 1974); see also Banks v. Allstate, No. 91-6982, 1992 WL 102885, at *2 (E.D. Pa. May 7, 1992). Under Pennsylvania law, insurance policy interpretation is a matter of law for the court. See Pa. Nat'l Mut. Cas. Ins. Co. v. St. John,106 A.3d 1, 14 (Pa. 2014). The "goal in construing and applying the language of an insurance contract is to effectuate the intent of the parties as manifested by the language of the specific policy." Id. (citing 401 Fourth St., Inc. v. Investors Ins. Grp.,879 A.2d 166, 171 (Pa. 2005)); Madison Constr. Co. v. Harleysville Mut. Ins. Co.,735 A.2d 100, 106 (Pa. 1999) ("The polestar of [the court's] inquiry ... is the language of the insurance policy."). "When the language of an insurance policy is plain and unambiguous, [the] court is bound by that language." St. John, 106 A.3d at 14. "Alternatively, if an insurance policy contains an ambiguous term, 'the policy is to be construed in favor of the insured to further the contract's prime purpose of indemnification and against the insurer, as the insurer drafts the policy, and controls coverage.'" Id. (quoting 401 Fourth St., 879 A.2d at 171). "Contract language is ambiguous if it is reasonably susceptible to more than one construction and meaning." Id. (citing Lititz Mut. Ins. Co. v. Steely,785 A.2d 975, 978 (Pa. 2001)). "Finally, the ...

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