United States District Court, W.D. Pennsylvania, Pittsburgh.
Marilyn J. Horan, United States District Judge.
Sypherd Enterprises Inc ("Sypherd"), brings the
within action against Defendant, Auto-Owners Insurance
Company ("Auto-Owners"), for claims of Breach of
Contract and Bad Faith pursuant to 42 Pa.C.S. § 8371
arising from a water damage claim on Sypherd's property.
Auto-Owners moves for summary judgment pursuant to
Fed.R.Civ.P. 56. (ECF No. 43). The parties provided briefs,
appendices, and concise statements of material facts (ECF
Nos. 44, 45, 46, 47, 48, and 49), and the matter is now ripe
following reasons, Auto-Owners' Motion for Summary
Judgment will be granted.
operates a restaurant/grill/tavern known as the Souper Bowl
located at 910 5thAvenue, Pittsburgh,
Pennsylvania. (ECF No. 46 at ¶ 3). On November 29, 2016,
the Souper Bowl suffered property damage when a "water
supply pipe in the immediate vicinity of Plaintiffs
5th Avenue premises failed and/or burst, causing a
large quantity of water to flow into and around the
premises." Id. at ¶¶ 2, 12, 22-23.
Mr. Sypherd testified that he noticed water coming out of his
pipes, walls, toilets, and drains. (ECF No. 47-1 at p. 49).
He also testified that the drain in the basement of the
premises was "totally clogged." Id. The
Pittsburgh Water and Sewer Authority ("PWSA")
performed the repairs to the broken water line. (ECF No. 46 at
¶ 25). Sypherd subsequently sought coverage for the
water damage under its Policy with Auto-Owners. Following the
incident, Dave Barr, a claims adjuster, inspected the Souper
Bowl on behalf of Auto-Owners and reported that the damage
was caused by surface water from the water main break leaking
through the back wall of the building. Id. at p.
24-25. On December 2, 2016, Auto-Owners denied coverage based
upon the following coverage exclusions in its Policy:
CAUSES OF LOSS-SPECIAL FORM
1. We will not pay for loss or damage caused directly or
indirectly by any of the following. Such loss or damage is
excluded regardless of any other cause or event that
contributes concurrently or in any sequence to the loss.
(1) Flood; surface water, waves (including tidal wave and
tsunami), tides, tidal water, overflow of any body of water,
or spray from any of these, all whether or not driven by wind
(including storm surge);
(2) Mudslide or mudflow;
(3) Water that backs up or overflows or is otherwise
discharged from a sewer, drain, sump, sump pump, or related
(4) Water under the ground surface pressing on, or flowing or
(a) Foundations, walls, floors or paved surfaces;
(b) Basements, whether paved or not; or
(c) Doors, windows or other openings;
(5) Waterborne material carried or otherwise moved by any of
the water referred to in Paragraph (1), (3) or (4), or
material carried or otherwise moved by mudslide or mudflow.
This exclusion applies regardless of whether any of the
above, in Paragraphs g. (1) through (5) is caused by an act
of nature or is otherwise caused.
(ECF No. 47-1 at p. 18). While not cited in Auto-Owners's
denial letter, the Policy contains an endorsement which
deletes subparagraph g(3). Id. at p. 23. In its
Answer, Auto-Owners also cited to additional portions of the
policy as a basis to deny coverage:
e. Utility Services The failure of power, communication,
water or other utility service supplied to the described
premises, however caused, if the failure:
(1) Originates away from the described premises; or
(2) Originates at the described premises, but only if such
failure involves equipment used to supply the utility service
to the described premises from a source away from the
Failure of any utility service includes lack of sufficient
capacity and reduction in supply. Loss or damage caused by a
surge of power is also excluded, if the surge would not have