PHILADELPHIA – Property owners who were not reimbursed for damage costs sustained in a rain storm have filed a lawsuit against their insurance provider, for breaching its contract with them and subsequently acting in bad faith.

Fotios Malitas and Alexandra Malitas of Huntingdon Valley filed suit in the Philadelphia County Court of Common Pleas on Oct. 11 versus Venetian Farmers Market, LLC also of Huntingdon Valley, plus Erie Insurance Exchange and Erie Indemnity Company of Erie.

The plaintiffs own the property at 1500 Farragut Avenue in Bristol, a two-story, multi-tenanted office and retail location measuring 23,000 square feet in size. The Erie defendants issued an insurance policy to the plaintiffs, known as an Ultraflex Commercial Property Policy. 

According to the policy, the defendants are allegedly obligated to pay for damages to the plaintiffs’ property due to a “direct physical loss or damage to covered property at the premises described in the declaration caused by or resulting from a peril insured against.”

Prior to Aug. 3 of this year, an unknown third party caused damage to the roof of the building, consisting of a broken and intentionally plugged four-inch roof drain pipe, permitting water to accumulate on the roof.

“Machinery was removed from the roof, a surveillance system was intentionally damaged, electrical junction boxes were opened and damaged and mechanical openings were created in the roof. Additionally, debris, including rolled-up roofing material, tar paper, plastic cups and other foreign materials were intentionally inserted into the 4-inch roof drain pipe,” the suit says.

On Aug. 3, a severe thunderstorm and four inches of rain overwhelmed the roof’s drainage system at the property and two to three feet of water accumulated on the roof before the water entered mechanical openings and cascaded into the building’s interior.

The roof of the building sustained extensive damage and there was additional damage to the building’s interior, including to the interior stores, offices, foyer, showroom and electrical system, and damage to one of the building’s tenants, China Gourmet Restauran, the suit sayst. As an additional result, plaintiffs have also sustained a loss of rental income.

The plaintiffs believe they were owed contractual obligations under the policy for the Erie defendants to investigate, evaluate and negotiate the property damage claim in good faith and to arrive at a prompt, fair and equitable settlement, and further believe the denial of their claim is without justification and a breach of these obligations.

For counts of breach of contract and bad faith, the plaintiffs are seeking compensatory damages and punitive damages in excess of $50,000, costs of suit, attorney’s fees, statutory interest and all other relief the Court deems just and proper.

The plaintiffs are represented by Liberato P. Verderame of Edelson & Associates, in Newtown.

Philadelphia County Court of Common Pleas case 171001481

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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Philadelphia County Court of Common Pleas
1501 Arch Street
Philadelphia, PA - 19102

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