Dougherty v. Allstate Property & Casualty Insurance Co.
681 F. App'x 112
| 3rd Cir. | 2017Background
- Dougherty owns a PA home damaged by water from a plumbing failure; he insured with Allstate and sought coverage for the damage.
- Allstate denied coverage based on a maintenance exclusion for faulty maintenance.
- Dougherty sued for breach of contract and bad-faith handling of his claim.
- The district court granted summary judgment for Allstate, finding the maintenance exclusion applicable given evidence of furnace neglect.
- The court relied on expert and factual record showing the furnace malfunction was due to lack of maintenance, not a covered peril.
- Dougherty argues possible alternative causes but the record shows, by admissions and evidence, that freezing pipes resulted from failure to winterize and maintain the furnace.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the maintenance exclusion bars coverage | Dougherty contends facts create disputes about the cause; Allstate failed to prove the exclusion applied | Allstate must prove the exclusion applies and the record shows furnace neglect caused the leak | Yes; exclusion properly applied, summary judgment for Allstate |
| Whether bad faith claim survives given exclusion | Allstate lacked a reasonable basis to deny coverage | There was a reasonable basis to deny based on maintenance failure | No; maintenance exclusion gave Allstate a reasonable basis to deny |
Key Cases Cited
- Madison Const. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100 (Pa. 1999) (burden on insurer to prove exclusion when denying coverage)
- Williams v. Borough of W. Chester, Pa., 891 F.2d 458 (3d Cir. 1989) (summary judgment standard; de novo review on contract issues)
- Halsey v. Pfeiffer, 750 F.3d 273 (3d Cir. 2014) (no factual dispute from speculation; record supports movant’s position)
- Pa. Nat. Mut. Cas. Ins. Co. v. St. John, 106 A.3d 1 (Pa. 2014) (plain and ordinary meaning governs contract interpretation; contract not property issue)
- Universal Teleservices Ari z., LLC v. Zurich Am. Ins. Co., 879 A.2d 230 (Pa. Super. Ct. 2005) (interpretation of policy language to effect intent of parties)