Pennsylvania Record

Friday, July 19, 2019

PECO disabling natural gas service led to breach of policy agreement, property owner says

By Nicholas Malfitano | Aug 21, 2017

MEDIA – A Broomall property owner says its insurance company breached its policy agreement as a result of PECO turning off its natural gas service without any advance notice.

1219 MacDade, LLC of Broomall filed suit in the Delaware County Court of Common Pleas on Aug. 2 versus PECO Energy Company of Philadelphia and Certain Underwriters at Lloyd’s London (c/o Pennsylvania Insurance Department), of Harrisburg.

According to the lawsuit, the plaintiff purchased a property on the 1900 block of South Sproul Road in Broomall prior to July 2016, intending to rehabilitate it and lease it to tenants.

At that time, a policy was secured from Lloyd’s London to insure the location with property damage coverage. The policy contains a vacancy clause and a “winterization” clause, mandating the policyholder to maintain heat in the property or drain the equipment and shut off the supply if the heat is not maintained.

Meanwhile, PECO agreed to provide the property with electricity and natural gas service and first sent the plaintiff a bill for that service on July 20, 2016. The bill was erroneous, charging the plaintiff for $6,833.62 worth of service. After being informed, PECO acknowledged the error, adjusted the bill and gave financial credit to the plaintiff.

Later PECO bills from August 2016 to February 2017 showed monthly gas charges of about $30, but during this period, PECO shut off and locked the gas valve without telling the plaintiff. While the plaintiff continued to use electricity and was billed for this usage by PECO, it was believed the plaintiff was still being charged $30 per month for gas usage.

On Feb. 22, a water pipe along an exterior wall of the property burst, covering the first floor of the property with water and filling the basement with about two feet of water, which caused damage of the type covered by the insurance policy.

The plaintiff sought reimbursement from Lloyd’s London for the loss – which the company refused via an exclusion in the policy, stating it was the plaintiff’s failure to maintain heat in the property.

However, the plaintiff maintained it did its best to maintain that heat and the decision by Lloyd’s London was tantamount to breach of contract.

But in the event the Lloyd’s London coverage denial is correct, the plaintiff believes PECO was responsible for the cost to repair and replace the damage, due to its decision to turn off the property’s gas valve and not telling the plaintiff.

For a count of breach of contract to Lloyd’s London and additional counts of breach of contract and negligence to PECO, the plaintiff is seeking damages not in excess of $75,000.00, plus pre- and post-judgment interest, costs of suit and such other legal, equitable relief as the Court deems just and proper, in this matter.

The plaintiff is represented by Jeffrey P. Resnick of Sherman Silverstein Kohl Rose & Podolsky, in Moorestown, N.J.

Delaware County Court of Common Pleas case 2017-006857

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at

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Delaware County Court of Common Pleas