In Cummings v. Allstate Insurance Company, the court was faced with a carrier’s motion to dismiss for failing to join a necessary party. The case was brought by the estate of a decedent insured that died following surgery needed to correct injuries caused by a faulty floor. The insured alleges that a faulty floor, ruined by water that escaped from a heating system, was covered under a Deluxe Homeowner’s Policy issued by the carrier. After the carrier refused to cover the damage, the decedent tripped and fell, requiring surgery, which ultimately lead to her fatal heart attack. The insured alleges that the decedent’s cardiac arrest is solely attributable to the carrier’s bad faith refusal to pay their claim.
The insured filed suit in Philadelphia County and the carrier removed to federal court. During discovery, however, it came to light that the insured hired a subcontractor to repair the floor. The carrier therefore filed the instant motion, claiming that the absent subcontractor is a necessary party.
The insured’s complaint contained two counts, alleging first that the carrier breached its insurance contract and is liable for damages for pain, suffering and mental anguish. The insured’s second count alleges that the carrier acted in bad faith by conducting only a cursory investigation of its claim.
However, the court primarily addressed the carrier’s motion to dismiss, examining the necessity of joining the insured’s former subcontractor as a defendant to the suit. The carrier argued that the absent party was necessary because, in the event the court denies the insured’s breach of contract claim, compensation would be unavailable to the insured without the subcontractor’s inclusion. The court highlighted the fact that the subcontractor claimed in his deposition that he completed the work before the carrier denied the insured’s claim. This fact, the court held, would be a critical point later in the apportionment of damages.
Furthermore, the court recognized that, if it later finds that the damage to the floor was a covered loss and that the carrier did breach its contract, then the subcontractor’s joinder is still necessary to determine whether the damages relating to the insured’s death were foreseeable. The court also reasoned that it may be the case that the subcontractor’s repairs to the floor constitute a break in the chain causation, meaning that he is ultimately liable to the insured. Given these facts and the potential factual determinations that may arise at a later point in the suit, the court found that the subcontractor was a necessary party. However, it denied the insured’s motion to dismiss.
Date of Decision: December 27, 2011
Cummings v. Allstate Ins. Co., No. 11-02691, U.S. District Court for the Eastern District of Pennsylvania, 2011 U.S. Dist. LEXIS 148273 (E.D. Pa. Dec. 27, 2011) (Kelly, J.)