Claims Dismissed in Absence of Evidence of Residency

Gerow v. State Auto Prop. & Cas. Co., 3:17-cv-203 (W.D. Pa. 2018)

In this breach of contract/bad faith action, the Western District Court considered whether to grant the plaintiffs’ and insurer’s cross-motions for summary judgment. This suit arose from a property damage claim following a burst water pipe at the plaintiffs’ alleged residence. The insurer had denied the claim on the basis that the insureds were not residing there at the time of the loss, as was required by the homeowners policy. The plaintiffs argued that the policy language was ambiguous and that, even if there was a residency requirement, Mr. Gerow was residing there. They also asserted that the insurer had waived the right to argue that they were not residing there and that it was estopped from denying coverage. The court found that the policy language was not ambiguous and that similar language has previously been upheld by Pennsylvania courts. While the plaintiffs agreed that Mrs. Gerow was not residing at the subject property, as she was in Connecticut taking care of her mother, they argued that Mr. Gerow was a resident of the insured property. The court disagreed, finding that Mr. Gerow stayed with his wife in Connecticut three to four nights per week and was only at the subject property two to four times per month. While the plaintiffs argued that they intended to return to the property, the court considered that their intention is not evidence of residency. Rather, it is “a factual place of abode evidenced by a person’s physical presence,” which was lacking in this case. The court also rejected the plaintiffs’ argument that the insurer had waived the residency requirement and was estopped from denying coverage. The plaintiffs were unable to point to an express declaration from the insurer that it was waiving this condition precedent. With respect to the bad faith claim, the court considered that the insurer clearly had a reasonable basis for denying coverage in light of its conclusion that the insureds were not residing at the insured property at the time of the loss. Thus, the court granted the insurers’ motion for summary judgment in its entirety and dismissed the breach of contract and bad faith claims.