April 2006 Bad Faith Cases No Claim Against Carrier For Failing To Include Costs For General Contractor Overhead Where Insureds Did Not Intend To Hire General Contractor (Philadelphia Commerce)

In Crowley v. Travelers Property and Casualty Insurance Company, the Philadelphia Court of Common Pleas, Commerce Court, affirmed its grant of summary judgment in favor of the insurer in Plaintiffs’ action alleging breach of contract, bad faith, and violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.  After sustaining damage to their home during a wind storm, Plaintiffs were entitled to replacement costs under the policy.  Plaintiffs hired a public adjuster who included overhead and profit costs for a general contractor in its estimate, while Defendant’s adjuster did not include such costs.  The Philadelphia trial level court cited U.S. Supreme Court case law which held that these costs must be advanced only when an insured is “reasonably likely” to need a general contractor.  The Court noted that Plaintiffs themselves testified that they never intended to hire a general contractor, and held that Plaintiffs were not entitled to profit by receiving compensation for a general contractor when one was neither used nor even contemplated.

Date of Decision:  April 10, 2006

Crowley v. Travelers Prop. Cas. Ins. Co., Court of Common Pleas, Philadelphia, August Term 2003, No. 2689, 2006 Phila. Ct. Com. Pl. LEXIS 185 (C.C.P. Philadelphia April 10, 2006)(Bernstein, J.)