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Merrone v. Allstate Vehicle and Property Insurance Co.

United States District Court, W.D. Pennsylvania

October 21, 2019




         I. Introduction

         Pending before the Court are Plaintiff Darlene Merrone's and Defendant Allstate Vehicle and Property Insurance Company's ("Allstate") Cross-Motions for Summary Judgment. (ECF Nos. 22, 26.) The Motions are fully briefed (ECF Nos. 23, 24, 25, 27, 28, 29, 30, 31, 33, 34) and ripe for disposition. For the reasons that follow, the Court DENIES Plaintiff's Motion and GRANTS Defendant's Motion.

         II. Jurisdiction

         This Court has subject-matter jurisdiction because the parties are citizens of different states and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332. Plaintiff is a citizen of either Pennsylvania or North Carolina, [1] and Allstate is a business entity organized under the laws of Illinois that also has its principal place of business in Illinois. (ECF No. 1-2 ¶¶ 1-2; ECF No. 3 ¶¶ 1-2.) Venue is proper in this District because Plaintiff originally filed her case in the Somerset County Court of Common Pleas, which this District embraces. 28 U.S.C. § 1441(a).

         III. Factual Background [2]

         A. The Merrone House and Its Residents

         In September of 2012, Plaintiff purchased and moved into a home (the "House") located at 334 Village Run Road, Boswell, Pennsylvania. (ECF No. 24 ¶ 1; ECF No. 34 ¶ 1.) Plaintiff lived in the House with her daughter, Johanna Graham, and Johanna's three children. (ECF No. 24 ¶ 2; ECF No. 34 ¶ 2.) On July 20, 2017, a fire completely destroyed the House. (ECF No. 24 ¶ 2; ECF No. 34 ¶ 2.) While fighting the fire, the fire department used an excavation company to assist, which destroyed and leveled the house as well as all the appliances, making it difficult to determine the cause of the fire. (ECF No. 24 ¶ 17; ECF No. 34 ¶ 17.) There were initial reports that local fire officials had declared the cause of the fire to be a "gas line explosion," but neither the fire department nor the police released a cause of the fire immediately after it occurred. (ECF No. 27 ¶ 7; ECF No. 30 ¶ 7.)

         At the time of the fire, Plaintiff was a year behind on the House's mortgage and intended to sell the property; she also owed approximately $7, 500 for installing new windows on the House. (ECF No. 24 ¶ 11; ECF No. 34 ¶¶ 8, 11.) Johanna was a recovering heroin addict, did not work, was receiving state assistance, and was on probation for retail theft and use of Plaintiff's credit cards without permission. (ECF No. 24 ¶ 11; ECF No. 34 ¶ 11.) At the time of the fire, Plaintiff was in North Carolina, and Johanna reported that she was at a friend's house. (ECF No. 24 ¶ 11; ECF No. 34 ¶ 11.)

         B. The Insurance Policy

         On July 20, 2017, Plaintiff had an insurance policy (the "Policy") with Allstate covering the House. (ECF No. 24 ¶ 4; ECF No. 34 ¶ 4.) The Policy, with a policy number of 977 943 646, [3]provided structural coverage of $241, 743.00, personal property coverage of $96, 698.00, and additional living expenses ("ALE") coverage of $48, 349.00. (ECF No. 24 ¶¶ 4-5; ECF No. 34 ¶¶ 4-5.) The day after the fire, Plaintiff submitted a claim to Allstate. (ECF No. 24 ¶ 6; ECF No. 34 ¶ 6.) After speaking to Plaintiff, Allstate recorded a First Notice of Loss Snapshot, listing the cause of the fire as a gas leak; this information apparently originated with local fire officials. (ECF No. 27 ¶ 6; ECF No. 30 ¶ 6.)

         The Policy covers, subject to certain exceptions not relevant here, "sudden and accidental direct physical loss to property," including losses "caused by fire or explosion" or "fire and lightning." (ECF No. 27-2 at 30, 35.)

         To date, Allstate has paid Plaintiff a total of $364, 137.50, consisting of $48, 349.00 in ALE, $253, 830.15 for the dwelling, and $61, 958.35 for personal property.[4] (ECF No. 24 ¶ 35; ECF No. 34 ¶ 35.)

         C. The Investigation

         Following the fire, Allstate assigned three adjusters to Plaintiff's claim: Jason Gant to handle the structure, Amy Corona the personal property lost, and Yvette Sienkiewicz the ALE claim. (ECF No. 24 ¶ 7; ECF No. 34 ¶ 7.) On July 24, 2017, Corona spoke to Plaintiff, who mentioned that she had spoken with the fire marshal regarding the fire. (ECF No. 24 ¶ 10; ECF No. 34 ¶ 10.) In Allstate's file on the claim, Corona recorded that the fire marshal may have told Plaintiff that he believed Johanna had started the fire, and asked that Johanna take a polygraph test. (ECF No. 24 ¶ 10; ECF No. 34 ¶ 10.) Around the same time, Sienkiewicz contacted Plaintiff's bank to confirm that she was a year behind on her mortgage. (ECF No. 24 ¶ 9; ECF No. 34 ¶ 9.)

         Also on July 24, 2017, Gant contacted Plaintiff to discuss her claim for loss of the structure, and to request an inspection for July 25, 2017. (ECF No. 24 ¶ 12; ECF No. 34 ¶ 12.) Plaintiff did not make the appointment, but Gant photographed the scene and noted that the police and fire departments were conducting cause and origin investigations. (ECF No. 24 ¶ 12; ECF No. 34 ¶ 12.) On August 4, 2017, Gant spoke to Bob Rice, the cause and origin investigator, who told Gant that he was trying to hire a company to excavate the scene of the fire. (ECF No. 24 ¶ 13; ECF No. 34 ¶ 13.) Allstate then issued a reservation of rights regarding intentional acts of Plaintiff[5] on August 14, 2017, in which Allstate asserted that their delay in payment was based upon a report of potential arson, information that the fire marshal and police were investigating Johanna for possible arson, and Plaintiff's financial motive. (ECF No. 24 ¶ 14; ECF No. 34 ¶ 14.)

         After issuing the reservation of rights, Allstate referred the claim to a Special Investigative Unit ("SIU") to continue investigating the cause of the fire, and Holly Kelly was assigned to investigate. (ECF No. 24 ¶¶ 15-16; ECF No. 34 ¶¶ 15-16.) On August 15, 2017, Kelly noted that Rice told her that he would list the cause of the fire as undetermined. (ECF No. 24 ¶ 17; ECF No. 34 ¶ 17.) On the same day, Kelly took a recorded statement from Plaintiff on the subject of the House, its residents, and Plaintiff's issues with her mortgage; Kelly wrote in her notes that she planned to conduct additional investigation, including taking statements from Johanna, as well as other witnesses. (ECF No. 24 ¶ 18; ECF No. 34 ¶ 18.) Plaintiff stated that she had often smelled gas in the House and that she had spoken to the gas company about the issue. (ECF No. 27 ¶ 8; ECF No. 30 ¶ 8.) Kelly's manager also suggested further investigation of Plaintiff's mortgage and Plaintiff's claims that she moved property from the House, as well as further speaking with authorities investigating the fire. (ECF No. 24 ¶ 19; ECF No. 34 ¶ 19.)

         After Allstate received an arson immunity letter[6] from the fire marshal, it referred Plaintiff's claim to Richard DiBella, an attorney, to obtain examinations under oath ("EUO") of Plaintiff and Johanna. (ECF No. 24 ¶¶ 20-21; ECF No. 34 ¶¶ 20-21.) Initially scheduled for October 12, 2017, the EUOs were postponed when, during a break in Plaintiff's EUO, Plaintiff learned that the police were searching her car and questioning Johanna about possible drugs found with her in the vehicle. (ECF No. 24 ¶¶ 24-25; ECF No. 34 ¶¶ 24-25.) Plaintiff and Johanna eventually had their EUOs on October 24, 2017. (ECF No. 24 ¶ 26; ECF No. 34 ¶ 26.) In addition to having Plaintiff and Johanna undergo the EUOs, Kelly also did the following during her investigation: (1) spoke to several of Plaintiff's neighbors, one of whom saw cars and people at the House the evening before the fire and heard fighting and yelling; (2) followed up with the same neighbor, who was reluctant to provide information, potentially due to Johanna's boyfriend's reputation as a troublemaker; (3) reviewed the social media profiles of Plaintiff and Johanna, as well as Johanna's criminal record; (4) obtained Plaintiff's bankruptcy petition; (5) requested records from the propane company and a real estate firm that Plaintiff sought to use to sell the House; (6) performed a credit check; and (7) spoke with Plaintiff's realtor, who stated that the House was in poor condition. (ECF No. 24 ¶ 27; ECF No. 34 ¶ 27.)

         Kelly spoke with the fire marshal, Trooper Richards, [7] on November 16, 2017 about their investigation into the fire, and Trooper Richards stated that he intended to pursue a polygraph test for both Plaintiff and Johanna. (ECF No. 24 ¶ 28; ECF No. 34 ¶ 28.) On January 8, 2018, Trooper Richards informed Kelly that the police had scheduled a date for Johanna's polygraph, but that she was not responding to calls, and also that he had spoken with a detective on a drug task force who stated that a confidential informant heard Johanna admit to setting the fire. (ECF No. 24 ¶ 31; ECF No. 34 ¶ 31.) Allstate contacted the putative informant and interviewed him, but he denied any knowledge, though the investigator believed he may have had more information to share. (ECF No. 24 ¶ 32; ECF No. 34 ¶ 32.) Following the interview with the informant, Allstate determined that it would pay the claim and issued payments on the structure in February of 2018, an advance on the personal property in December of 2017, the remainder of the personal property in February and July of 2018, and the remainder of the ALE claims in March of 2018. (ECF No. 24 ¶¶ 33-34; ECF No. 34 ¶¶ 33-34.)

         The cause of the fire remains "undetermined." (ECF No. 27 ¶¶ 11-12; ECF No. 30 ¶¶ 11-12.)

         D. Plaintiff's Post-Fire Living Arrangements

         Since the fire, Plaintiff has lived primarily in hotels; Allstate ascribes the difficulties in finding stable housing to eviction from hotels for damaging rooms and violating hotel policies, as well as Johanna's criminal record. (ECF No. 27 ¶ 5; ECF No. 30 ¶ 5.) ...

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