PHILADELPHIA – A Northeast Philadelphia church contends that its insurance carrier has committed breach of contract, by failing to cover its losses of water damage sustained when a drain line failed.
Remnant Church of God of Philadelphia initially filed suit in the Philadelphia County Court of Common Pleas on Jan. 27 versus Scottsdale Insurance Company, of Columbus.
(The case was removed to the U.S. District Court for the Eastern District of Pennsylvania on Feb. 11.)
“Defendant, in its regular course of business issued to plaintiff a policy of insurance covering plaintiff’s property located at 7710 Ogontz Avenue, Philadelphia, PA 19150. On or about Feb. 9, 2021, while the policy was in full force and effect, plaintiff suffered direct physical loss and damage to the insured property believed to be the result of a peril insured against under the policy, namely, an escape of water from a drain line, resulting in damage to the insured property and those areas and to the extent set forth in the preliminary estimate of loss,” the suit says.
“Notice of this covered loss was given to defendant in a prompt and timely manner and plaintiff, at all relevant times, fully complied with all the terms and conditions required by the policy. Defendant, despite demand for benefits under the policy, has refused, without legal justification or cause, and continues to refuse, to pay to plaintiff monies owed for the damages suffered as a result of the loss. Solely as a result of defendant’s failure and refusal to pay benefits to plaintiff as required under the policy, plaintiff has suffered loss and damage in an amount in excess of $50,000.”
The suit alleges that the defendant is obligated by the terms of the contract to indemnify the plaintiff’s loss.
“Despite submission of reasonable proof and demand for full and complete payment with respect to plaintiff’s loss, defendant has not paid to plaintiff all of the policy benefits to which plaintiff is entitled under the policy and has refused to provide funds sufficient to bring plaintiff’s property to pre-loss condition,” the suit states.
“Defendant’s denial of coverage was made without a reasonable basis in fact. Defendant’s refusal to indemnify plaintiff’s loss constitutes a breach of the insurance contract.”
The defendant provided an answer to the case on Feb. 17, denying the Church’s allegations as conclusions of law to which no response was required, and providing six affirmative defenses.
“Plaintiff’s complaint fails to state a cause of action upon which relief for breach of contract or statutory bad faith may be granted. Plaintiff’s complaint fails to state or allege sufficient facts to establish the claim is a covered event, peril or loss under the defendant’s policy. All actions by the defendant in receiving, investigating, and making its coverage determination were done in a timely and reasonable manner, with a reasonable basis in fact, and were communicated to the plaintiff in a timely and appropriate manner,” the defenses stated.
“All or part of the damages alleged and claimed in this case resulted from an event, occurrence or incident other than the event alleged in the complaint and other than an event that is covered in the policy. The damage and event alleged in the complaint are excluded from coverage under various exclusions in the policy. Plaintiff’s claims were properly denied with a reasonable basis by defendant under the terms of the policy.”
For counts of breach of contract and bad faith, the plaintiff is seeking damages in excess of $50,000, together with interest, court costs, counsel fees and delay damages.
The plaintiff is represented by Michael J. Casper of Wheeler DiUlio & Barnabei, in Philadelphia.
The defendant is represented by Bradley J. Vance of Reger Rizzo & Darnall, also in Philadelphia.
U.S. District Court for the Eastern District of Pennsylvania case 2:22-cv-00553
Philadelphia County Court of Common Pleas case 220102318
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com