PHILADELPHIA – An action filed by a landlord who suffered water damages to his rental properties and sued Allstate Insurance Company for breach of contract and bad faith has been dismissed.
On Jan. 7, U.S. District Court for the Eastern District of Pennsylvania Clerk of Court Kate Barkman announced the litigation between plaintiffs Overbook Properties, LLC and William Wolverton and Allstate had been settled.
Overbrook Properties is located in Narberth and owned a three-unit residential apartment building located on Ridge Avenue in the Roxborough section of Philadelphia. According to the litigation, the trio of units collected a monthly rental income of $2,200, and in 2009, the plaintiffs secured a policy from Allstate, based in Northbrook, Ill.
After a prior policy dispute between the plaintiffs and Allstate in 2011, which nearly led to the termination of the plaintiffs’ policy, Allstate offered a “Landlords Package Policy” in June 2016, renewing the policy coverage on the property.
“On or about Jan. 12, 2017, leaking water was observed in all three apartments of the property emanating from the toilet in the third floor apartment and the sewer stacks in the second and first floor apartments, causing water damage to the premises. There had not been any continuous or repeated leakage of water, steam, or fuel from any of the pipes, walls, plumbing fixtures, floors, stacks, or ceilings prior to that date. Plaintiffs reported the Jan.12, 2017 leak and resulting water damage to Allstate on or about Jan. 16, 2017,” U.S. District Court Judge Michael M. Baylson said.
The plaintiffs claimed they performed all post-loss obligations required under the policy, including proper notice of the loss, providing a sworn statement in proof of loss and repair estimates – however, Allstate has allegedly refused to reimburse the plaintiffs for their claims.
As a result of the water damage, plaintiffs sustained repair costs of $32,671 and loss of rental income of $24,200 over a time period spanning Jan. 12, 2017 to Nov. 20, 2017. Subsequently, Overbrook was unable to pay the mortgage on the property and was forced to sell it at a loss of $75,000 on Nov. 30, 2017.
The plaintiffs filed their initial complaint in the Philadelphia County Court of Common Pleas on Jan. 11, 2018 which Allstate removed to the U.S. District Court for the Eastern District of Pennsylvania on Feb. 9, for reasons of the amount in controversy and the diversity of citizenship between the parties.
An amended version of the complaint was filed on March 1 of last year, detailing claims of breach of contract and bad faith – leading Allstate to file a motion to dismiss the bad faith claim and one to strike the plaintiffs’ demand for attorney’s fees on the breach of contract claim, in addition to a final one to strike paragraphs 9-11 and 37 of the amended complaint.
The plaintiffs opposed these motions and they were later denied.
The plaintiffs were represented by James Cunilio of Cunilio & Cunilio, in Bryn Mawr.
The defendant was represented by Mark J. Walters of Labletta & Walters, in Eatontown, N.J.
U.S. District Court for the Eastern District of Pennsylvania case 2:18-cv-00630
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com