Opinion
Civil Action No. 2:04-CV-02889-LDD.
October 7, 2005
OPINION
On August 10, 2005, a one-day bench trial was held before the Court. Based upon the presentation of evidence at the bench trial, this Court makes the following findings of fact and conclusions of law, and orders entry of judgment in favor of defendant and against plaintiff.
I. Findings of Fact:
A. Insurance Policy
1. Plaintiff Anna Corr ("plaintiff") was insured by defendant State Farm Fire and Casualty Company ("defendant") under a "renters" policy, No. 78-LE-1976-4 (the "policy"), issued on May 15, 2002. (See Policy, attached as Pl. Ex. 1; Transcript of August 10, 2005 Hearing ("Tr."), at 11).
2. The policy insured against the loss of property "owned or used by an insured. . . ." (See Policy, at 3).
3. The policy expressly covered the "loss of property from a known location when it is probable that the property has been stolen." (Id., at 7).
4. The policy imposed a one-year limitation period from the date of loss or damage for filing suit. (Id., at 12).
5. The policy also contained an anti-fraud provision, stating that the policy "is void as to you and any other insured, if you or any other insured under this policy has intentionally concealed or misrepresented any material fact or circumstance relating to the insurance, whether before or after a loss." (Id., at 17).
B. Plaintiff's Income
6. Disability benefits constitute plaintiff's sole source of income, both now and at the time of the two alleged thefts. (Tr., at 62).
7. Plaintiff earned approximately $570 a month in disability benefits several years prior to, and at the time of, the two alleged thefts. (Id.).
C. July 2002 Move
8. Plaintiff moved residences on July 13-15, 2002 from Bridle Rd. to Foster St. in Philadelphia, Pennsylvania. (Id., at 11-12).
9. Plaintiff hired professional movers to transport some of her belongings. (Id.).
10. In addition to professional movers, plaintiff also testified that she received help from two individuals, "Harry" and "Jim." (Id., at 67). Plaintiff stated that her mother arranged for these individuals to help plaintiff, after plaintiff's mother randomly encountered "Harry" outside of a local K-Mart. (Id., at 68-72). Plaintiff testified that her mother met Harry on one other occasion, many years prior to the meeting at K-Mart. (Id., at 69).
11. Plaintiff testified that she entrusted her most valuable and sentimental possessions to "Harry" and "Jim," rather than to the professional movers. (Id., at 13-14, 74-82).
12. Plaintiff testified that although she was unsure as to whether she met these individuals on one occasion prior to the date on which they arrived at her apartment, plaintiff did not know them personally. (Id., at 74). In fact, plaintiff did not know their full names, lacked their telephone numbers and addresses, and had no way to get in touch with them. (Id., at 80-83).
13. Plaintiff testified that, on July 14, 2002, she gave Harry and Jim her most valuable possessions with the expectation that they would transport these possessions to plaintiff's new residence in the afternoon of July 15, 2002.
14. Plaintiff testified that Harry and Jim never transported plaintiff's possessions to her new residence. (Id., at 15-16, 82-84). Plaintiff's testimony concerning the existence of Harry and Jim was unconvincing. The court does not believe items were entrusted to Harry and Jim; consequently, the Court is unconvinced that items in the care of Harry and Jim were stolen on July 14 and 15, 2002.
15. Shortly after midnight on July 16, 2002, plaintiff called the Philadelphia Police Department to report the theft. (Id., at 18-20, 83-85).
16. Plaintiff filed a police report, listing ten stolen items: a 12 piece China place setting; two oriental rugs; fifteen paintings; a computer; a stereo; a digital camera; a camcorder; a watch; 60 CDs; 18 DVDs; a love seat; and an Ottoman. The value of these items was estimated at $35,000. (See July 16, 2002 Police Report, attached as Pl. Ex. 8).
17. On July 16, 2002, plaintiff notified defendant of her claim, which sought the value of the property allegedly stolen during the July 2002 move. (Tr., at 23).
18. On July 23, 2002, within a week from plaintiff's oral notification to defendant of the alleged losses, defendant's claim representative, Joe Tobin ("Tobin"), took plaintiff's recorded statement at her residence. (Id., at 25).
19. Plaintiff submitted to defendant a five-page personal property inventory form ("July 2002 inventory form"), which listed, inter alia, all of the items allegedly stolen during the course of the July move, the date they were acquired, and their approximate value. (See Personal Property Inventory Form, attached as Pl. Ex. 3).
20. The inventory form identified forty-nine stolen items, including a litany of items not on the police report, such as a $6800 diamond ring, a $2269 electronic keyboard, and $998 soundless air purifiers. (Id.; Tr., at 86-87). The approximate value of these items, according to plaintiff's inventory form, was $59,279.47. (Id.). The Court disbelieves Plaintiff's testimony as the identity and the valuation of the items stolen.
21. Plaintiff did not have receipts for the items allegedly stolen from her during the July move. (Tr., at 30-31).
22. Plaintiff testified that many of the items were gifts from plaintiff's ex-fiancé, John Murphy, who plaintiff allegedly dated for two years. (Id., at 90).
23. Mr. Murphy did not testify.
24. Plaintiff did not know Mr. Murphy's address, his birthday, his phone number, or where he worked. Nor did plaintiff possess a picture of Mr. Murphy. (Id., at 91-94). The court does not believe that Mr. Murphy bestowed the litany of lavish gifts enumerated in Plaintiff's testimony upon Plaintiff.
25. Plaintiff discovered at least one item identified on the inventory form, a Compaq computer system, in her closet in 2004. (Id., at 35-37).
26. Plaintiff submitted catalogue cut-outs of items that plaintiff felt were representative of the stolen items, without specifying that these items were not the exact items allegedly taken from her possession during the July 2002 move. (Id., at 41-45).
27. Plaintiff valued the items based upon prices for analogous items displayed in magazines and from her own personal shopping experiences. (Id., at 95-101).
D. August 2002 Move
28. On August 19, 2002, plaintiff moved from Foster Street to Oxford Street in Philadelphia, Pennsylvania. (Id., at 45).
29. Plaintiff testified that she kept personal items in a storage closet outside her new apartment. (Tr., at 49-51).
30. Plaintiff testified at one point that the storage closet was locked, but the lock was "sliced." (Tr., at 111). At another point, plaintiff testified that the storage closet was unlocked, indeed, that is was "always unlocked." (Tr., at 120).
31. Plaintiff testified that on August 22, 2002, while plaintiff and her mother were returning from shopping, plaintiff's mother watched a person leave from an open storage closet with plaintiff's air conditioner and then shouted "Oh my God he's taking the air conditioner." (Id., at 50-51).
32. Plaintiff did not see the theft, but testified that she immediately called the police after hearing her mother's proclamation. (Id.)
33. Plaintiff filed a police report in the afternoon of August 22, 2002, identifying an air conditioner as the only stolen item. (See August 22, 2002 Police Report, attached as Def. Ex. 3). The police report identified the storage closet as "open," as compared to locked. (Id.).
34. Plaintiff later filed an addendum to the police report, claiming that additional items were taken, including a lap top, a printer, a speaker phone, a transcriber, a scanner, quilts, linens, pillows, shoes, a radio, a CD player, and several animal-related products. (See August 22, 2002 Addendum to Police Report, attached as Def. Ex. 3).
35. Plaintiff filed a claim with defendant for the property allegedly stolen on August 22, 2002.
36. Plaintiff submitted a personal property inventory form to defendant identifying the items allegedly stolen ("August 2002 inventory form"). The August 2002 inventory form identified 32 stolen items. (Tr., at 122; see August 2002 Inventory Form, attached as Pl Ex. 5). According to plaintiff, the approximate value of these items was $11,268.30. (Id.).
37. Plaintiff submitted certain receipts with her second claim. (See Receipts, attached as Pl. Ex. 7).
38. Many of the receipts lacked an identification of the purchased product, the date of the purchase, or verification that plaintiff purchased the products. (Id.; Tr., at 125-128).
39. Plaintiff provided no testimony linking the receipts to the products identified on plaintiff's August 2002 inventory form. (Tr., at 57).
II. Conclusions of Law:
40. Plaintiff proceeds only on a breach of contract claim. (See Pl. Compl., at ¶¶ 8-11; August 1, 2005 Stipulation, Doc. No. 11). Plaintiff contends that defendant breached its contract with plaintiff by refusing to indemnify plaintiff for the losses she allegedly sustained during the July and August 2002 moves. (Tr., at 142).
41. Defendant provides two defenses. First, defendant argues that plaintiff's claims are void because plaintiff made material misrepresentations in her claim submissions. (Tr., at 150-155). Second, defendant contends that plaintiff's claim is time-barred because plaintiff failed to file suit within one year after sustaining the loss, as required by the insurance policy. (Tr., at 1481-49).
42. A plaintiff seeking to prove a breach of contract claim under Pennsylvania law must establish three elements by a preponderance of the evidence: (1) the existence of a valid contract between the parties, including the essential terms of the contract; (2) a breach of the duty imposed by the contract; and (3) damages resulting from the breach. See, e.g., Omicrom Systems, Inc. v. Weiner, 860 A.2d 554, 564 (Pa.Super.Ct. 2004).
43. An insurer may defend against a breach of contract claim by asserting a fraud defense. Pursuant to this defense, an insurer must prove three elements: (1) the representation was false; (2) the representation was made in bad faith or with knowledge of its falsity; and (3) the representation was material to the risk being insured. See Saracco v. Vigilant Ins. Co., 2000 WL 202274, at *2 n. 7 (E.D. Pa. Feb. 22, 2000) (applying misrepresentation defense to insured's behavior during investigation of claim); Parasco v. Pacific Indemnity Co., 920 F. Supp. 647, 652-653 (E.D. Pa. 1996) (requiring defendant to establish misrepresentation during post-loss investigation when policy voids coverage for intentional misrepresentation of facts related to policy before or after loss); Tudor Ins. Co. v. Township of Stowe, 697 A.2d 1010, 1017 (Pa.Super.Ct. 1997). Although courts seem to disagree as to the actual standard of proof, it is axiomatic that the insurer bears the burden of proving these elements. Compare Greenberg v. Aetna Ins. Co., 235 A.2d 582, 584 (1967) (misrepresentation defense to breach of contract action by insured to collect proceeds of covered losses need only be proved by preponderance of evidence) with Tudor Ins. Co., 697 A.2d at 1016 (insurer seeking to avoid policy must prove fraud by clear and convincing evidence); 17 Couch on Ins. § 254:94 (2005) ("burden of proof to establish a misrepresentation or concealment by the insured, and the falsity, materiality, or other element necessary to raise the defense in a given jurisdiction rests, as a general rule, upon the insurer").
A. Prima Facie Case
44. This Court concludes that plaintiff failed to establish a prima facie case of breach of contract. Specifically, the Court finds that plaintiff has failed to prove by a preponderance of the evidence that defendant breached a duty imposed by the contract.
This finding relieves the Court from reaching the question of whether defendant met its burden of establishing the affirmative defense of a material misrepresentation.
45. In order to establish that defendant breached its duty by refusing to indemnify plaintiff for the losses related to the two thefts, plaintiff must establish that: (1) she "owned or used" the property; and (2) it is "probable" that the property was stolen.
46. In considering whether plaintiff has met her burden, the Court, as fact-finder, must weigh evidence, make credibility determinations, and draw all reasonable inferences from the evidence. Fed.R.Civ.P. 52(a); see Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 856 (1982) (Rule 52(a) recognizes the "unique opportunity afforded the trial judge to evaluate the credibility of witnesses and to weigh the evidence."); Weir by Gasper v. Estate of Ciao, 556 A.2d 819, 824 (Pa. 1989) ("In a bench trial, it is the duty of the trial judge to judge credibility of witnesses and to weigh their testimony.").
1. July 2002 Claim
a. Ownership or Use
47. With respect to the losses related to the July 2002 move, the Court finds that plaintiff failed to establish that plaintiff owned or used the property identified in the inventory list. (See Policy, at 3).
48. Plaintiff relies entirely upon her own testimony to support her ownership of the property. Plaintiff contends that she either purchased the stolen property or that the property was gifted to her by her ex-fiancé.
49. The Court finds that plaintiff's testimony on this issue lacks credibility, and, accordingly, this Court affords plaintiff's testimony on this issue little, if any, weight.
50. With respect to the property that plaintiff allegedly purchased, plaintiff fails to submit any receipts. (Tr., at 31, 88-90). Although plaintiff contends that the receipts for this property were located in a strongbox, which was also stolen during the course of the July 2002 move, plaintiff provides no explanation as to why the receipts for the second set of items allegedly stolen during the August 2002 move were in a different location than the receipts for the first set of items. (Id., at 31, 89). Furthermore, plaintiff failed to demonstrate how she could have afforded many of the items that she allegedly purchased, such as the electronic keyboard, while plaintiff was earning approximately $570 per month on disability. (Id., at 62-63).
51. Plaintiff further contends that the remaining property was gifted to her by her ex-fiancé, Mr. Murphy. (Id., at 91). However, Mr. Murphy did not testify on plaintiff's behalf. Furthermore, although plaintiff claims that she and Mr. Murphy dated for two years, plaintiff lacked knowledge as to any of the material details of Mr. Murphy's life, such as his phone number, where he worked, or where he lived. (Tr., at 91-94). Nor did plaintiff have any pictures of her ex-fiancé. (Tr., at 93). Finally, plaintiff failed to describe in detail the factual circumstances behind her receipt of such gifts, such as how, where, and when Mr. Murphy provided these gifts. Quite simply, the Court does not believe Mr. Murphy bestowed these gifts upon Plaintiff.
b. Probability of Theft
52. Assuming arguendo that plaintiff did establish her ownership of the property, the Court finds that plaintiff failed to establish the probability that the property was stolen through the July 2002 move.
53. Plaintiff relies entirely on her own testimony to establish that the items identified on the July 2002 inventory form were stolen during the July 2002 move.
54. This Court finds that plaintiff's testimony on this issue lacks credibility, and, again, affords plaintiff's testimony on this issue little, if any, weight.
55. Plaintiff's testimony strains credulity. For instance, plaintiff testified that although she hired professional movers to transport certain possessions, she decided not to give all of her possessions to the professional movers, who were presumably bonded. (Tr., at 80-82). Instead, plaintiff claims that she entrusted her most precious, valuable, and sentimental possessions, including a $6800 diamond and opal ring, a $2640 watch, a digital camera, and a camcorder, to two random people, unaffiliated with an insured moving company, with whom plaintiff had little or no contact in the past. Nor did plaintiff know their full names, telephone numbers, or addresses. (Id., at 80-83). In fact, plaintiff had no way of contacting these individuals. (Id.). Furthermore, in addition to the implausibility of trusting what plaintiff valued as nearly $60,000 in possessions to two virtual strangers, the Court notes that a wide discrepancy exists between the police report and the final inventory report; indeed, while plaintiff identified ten stolen items in the initial police report, her final inventory report to defendant contained nearly fifty items. (See July 2002 Police Report, attached as Def. Ex. 2; July 2002 Inventory Form, attached as Pl. Ex. 3).
2. August 2002 claim
a. Ownership or Use
56. With respect to the August 2002 claim, this Court finds that plaintiff failed to establish by a preponderance of the evidence that she owned the items identified on the August 2002 inventory report.
57. Plaintiff failed to provide testimony linking each individual receipt, as documented in Pl. Ex. 7, with her purchase of those products identified in the August 2002 inventory report. Nor did plaintiff explain how she could have afforded the items identified in the August 2002 inventory report based upon her monthly income of $570. Plaintiff also failed to explain why she possessed receipts allegedly documenting the existence of these items, when all other receipts were allegedly stolen during the course of the July 2002 move. Furthermore, many of the receipts lacked identifying characteristics, such the identity of the product, the date of the purchase of the product, or who purchased the products. Plaintiff did not provide testimony clarifying these ambiguities.
b. Probability of Theft
58. Nor did plaintiff establish by a preponderance of the evidence the probability that the property identified in the inventory reports was stolen. Plaintiff provides only her testimony, in conjunction with the police report, in support of this proposition.
59. This Court again finds that plaintiff's testimony on this issue lacks credibility, and, as such, affords plaintiff's testimony little, if any, weight. Several reasons support this finding.
60 First, plaintiff noted that see did not see the alleged theft. Second, plaintiff's mother did not testify as to the factual details behind the robbery. Third, plaintiff had no reason to infer that she was being burgled at the time she called the police, particularly because plaintiff had not yet spoken with her mother about what she witnessed and because the exclamatory remark of plaintiff's mother did not indicate that the burglary of plaintiff's air conditioner was occurring. (Id., at 112). Fourth, in her statement to Tobin on July 23, 2003, several weeks prior to the alleged August 2002 theft, plaintiff stated that she "sold" her air-conditioners and suggested that this act was to "offset" the costs of professional movers. (See July 23, 2003 Statement, attached as Def. Ex. 13, at 10). Fifth, rather than immediately checking the storage area after the alleged theft, plaintiff contends that she did not survey the storage area until much later, when she discovered additional items that were stolen. (Id., at 120-121). Sixth, the inconsistency between the items identified on plaintiff's initial police report and those identified on the supplemental police report is then exacerbated by the inconsistency between the supplemental police report and plaintiff's inventory form, which contains a litany of additional items that were not identified on the supplemental police report. (Id., at 121-122). Seventh, plaintiff fails to adequately explain why certain valuable items, such as a $2384.40 lap top computer and nearly $3,000 in psychic material, were placed in an unlocked storage closet outside of her apartment. (Id., at 48-49, 120).
3. Conclusion
The Court also notes that plaintiff failed to provide a foundation from which the Court could reasonably apportion damages. Under Pennsylvania law, a plaintiff must prove damages to a reasonable degree of certainty. TIG Ins. Co. v. Nobel Learning Communities, Inc., 2002 WL 1340332, at *17 (E.D. Pa. June 18, 2002) (noting the well-established rule that "as in any breach of contract action, the insured has the burden of proving damages with reasonable certainty"). In the instant case, plaintiff provided no expert testimony on the amount of plaintiff's loss. Instead, plaintiff's damages claim is based upon subjective assessments of the amount of each item and/or catalogue descriptions of products similar to plaintiff's items. Neither method establishes the value of plaintiff's allegedly stolen items to a reasonable degree of certainty. See Restatement (Second) of Contracts § 352 (1981); Merion Spring Co. v. Muelles Hnos. Garcia Torres, S.A., 462 A.2d 686, 696 (Pa.Super.Ct. 1983) (noting that Pennsylvania courts have adopted § 352 of the Restatement (Second) of Contracts and the reasonable certainty rule for damages).
61. This Court finds that plaintiff has not established by a preponderance of the evidence that defendant breached its duty under the policy. Defendant was only required to indemnify plaintiff for certain types of losses, including losses related to the "probable" theft of personal property owned or used by an insured. The Court finds that plaintiff's testimony lacks all credibility, indeed, that it is riddled with inconsistencies and implausibilities, and, thus, plaintiff's testimony, standing alone, fails to establish that plaintiff owned the property submitted in her claims and that this property was probably stolen. Accordingly, the Court enters judgment in favor of defendant and against plaintiff. An appropriate Order follows.
In so doing, the Court need not reach defendant's arguments that plaintiff made affirmative misrepresentations in the submission of her claim or that plaintiff's claim is barred by the policy's one-year suit limitation provision.
ORDER
AND NOW, this 6th day of October 2005, following an August 10, 2005 bench trial on plaintiff's remaining breach of contract claim, it is hereby ORDERED as follows:1. Judgment is entered for defendant on plaintiff's breach of contract claim.
2. The Clerk of Court is directed to close this matter for statistical purposes.