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Capital Flip, LLC v. American Modern Select Insurance Co.

United States District Court, W.D. Pennsylvania

September 20, 2019

CAPITAL FLIP, LLC, Plaintiff,
v.
AMERICAN MODERN SELECT INSURANCE COMPANY, Defendant,

          OPINION

          WILLIAM S. STICKMAN, IV UNITED STATES DISTRICT JUDGE

         Plaintiff, Capital Flip, LLC ("Capital Flip"), brought this action asserting claims for breach of contract and insurance bad faith arising out of Defendant American Modern Select Insurance Company's ("American Modern") denial of insurance coverage for substantial property damage caused by racoons. Capital Flip argues that the raccoons engaged in "vandalism and malicious mischief which is unquestionably covered by the insurance policy. Defendant counters that raccoons cannot, as a matter of law, engage in vandalism or perpetrate mischief-much less with malice. The Court agrees and, as set forth below, finds that Plaintiffs claims fail as a matter of law. Therefore, Defendant's Motion to Dismiss, ECF No. 3, is granted.

         I. Factual Background and Procedural History

         The relevant facts are straightforward and are not in dispute.[1] Capital Flip was the owner of a dwelling located in the Pittsburgh area. In April of 2018, Capital Flip discovered that racoons had somehow entered the dwelling and caused a substantial amount of damage to the interior. The property was insured by a Dwelling Policy issued by American Modern. See Plaintiffs Complaint, ¶¶3-5.

         The Dwelling Policy offered coverage for a limited number of "perils insured against." See Pl's Compl., Exhibit A. The only insured peril relevant to this case covers losses arising out of "vandalism or malicious mischief." The Policy provides, in relevant part:

Unless the loss is excluded in the GENERAL EXCLUSIONS, we insure for direct physical loss to the property covered caused by:
* * *
10. Vandalism or malicious mischief. This peril does not include loss:
a. to glass or safety glazing material constituting a part of the building other than glass blocks;
b. by pilferage, theft, burglary or larceny, but we will be liable for damage to the building covered caused by burglars; or
c. to property on the Described Location if the dwelling has been vacant for more than 30 consecutive days immediately before the loss. A dwelling being constructed is not considered vacant.[2]

See id, Ex. A, pp. 3-4.

         Capital Flip made a claim on the Policy, contending that the damage to its property was a result of "vandalism or malicious mischief by the culprit racoon. American Modern denied the claim by a May 6, 2018, letter, which stated; "[s]ince your loss was the result of an animal or animals damaging the dwelling and this is not covered in the list of perils, as stated above, there is no coverage under your policy for the loss. Therefore, your claim is respectfully denied." See id, Ex. B, p. 2.

         On December 3, 2018, Capital Flip filed the instant Complaint in the Court of Common Pleas of Allegheny County, Pennsylvania, asserting claims of breach of contract and insurance bad faith. On February 19, 2019, American Modern removed the Complaint to this Court, asserting diversity jurisdiction under 28 U.S.C. §1332.[3] (Notice of Removal, ECF No. 1).

         American Modern filed a Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6), arguing that Capital Flip's claims fail as a matter of law because its denial of coverage was warranted. Specifically, American Modern contends that raccoons cannot commit vandalism or engage in malicious mischief and, therefore, there was no coverage upon which to premise a claim for breach of contract or for insurance bad faith.

         Capital Flip counters that the Policy is ambiguous because it does not specifically define "vandalism" or "malicious mischief." It contends that, because those terms are undefined, they may include damage caused by racoons and/or other animals. At the very least, Plaintiff argues, the question of whether an animal can engage in "vandalism" or "malicious mischief is one of first impression in Pennsylvania and, therefore, does not lend itself to disposition on a motion to dismiss.

         II. ...


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