In a recent Memorandum Order out of the Western District of Pennsylvania, Selmek v. State Farm Fire and Casualty Company,1 a State Farm adjuster requested that the insured assist her in inspecting a damaged roof and securing it from further damage. Carl and Amy Selmeks’ home and detached garage (located 100 yards away from the house) in rural Pennsylvania were insured under a dwelling and liability policy issued by State Farm. Mr. Selmak suffered injuries when he fell through the roof of his garage. Prior to this, a windstorm had damaged the roof of the garage, causing certain shingles to be blown off. The Selmeks reported the loss to State Farm. State Farm sent an adjuster to inspect the property. The adjuster did not bring sufficient equipment with her to go onto the garage’s roof. Mr. Selmek offered the adjuster his own ladder and also assisted her in taking measurements of the roof.

After the inspection, Mr. Selmek asked the adjuster whether or not he should secure the roof with a tarpaulin to prevent further leakage into the structure of the garage. The adjuster instructed Mr. Selmek that he should go onto the roof to prevent further leakage and damage into the structure and to secure a tarpaulin over the damaged area. Mr. Selmek followed her instructions. While doing so, he fell through the rotted wood of the roof into the structure below onto a landing. This rendered him a paraplegic.

Some pertinent portions of the State Farm policy are as follows:2

  • After a loss, the insured shall "protect the property from further damage or loss, make reasonable and necessary temporary repairs required to protect the property, [and] keep an accurate record of repair expenditures." (Id. at p. 30 ¶2(b)).
  • It explicitly provides that State Farm "do[es] not insure under any coverage for any loss which would not have occurred in the absence of . . . [n]eglect, meaning neglect of the insured to use all reasonable means to save and preserve property at and after the time of a loss, or when property is endangered." (Id. at p. 27 ¶2(d) (emphasis omitted)).
  • However, the policy contains an additional coverage providing "[i]f damage is caused by a Loss Insured, [State Farm] will pay the reasonable and necessary cost you incur for temporary repairs to covered property to protect the property from further immediate damage or loss." (Id. at p. 22 ¶2).

The Selmeks filed a lawsuit against State Farm seeking compensation for Mr. Selmek’s injuries, loss of consortium damages stemming from the injuries and the alleged bad faith of State Farm. State Farm moved to dismiss all three counts. The Western District refused to dismiss all three counts.

The Selmeks’ third count sought damages stemming from State Farm’s alleged bad faith. Specifically, the Selmeks’ argued:

[T]hat the Defendant acted in bad faith toward the insured by placing the insured at risk of severe personal injury from a known hazard after inspecting the roof in order to reduce the property damage to the roof, which was a covered loss under the policy even though it placed the insured’s life and health in extreme jeopardy.

The Selmeks’ alleged that this constituted bad faith because “the insurer placed its own interests in adjusting the claim ahead of the interest of its insured by placing the insured in jeopardy of physical injury in order to save money on an insurance claim.”

The court noted:

[U]nder Pennsylvania jurisprudence, insurers owe a duty of good faith and fair dealing to their insureds. Among other duties, the implied covenant creates an obligation to disclose fully the coverage and any requirements under the policy. The covenant arises from the nature of insurance contracts and the fiduciary relationship between an insurance company and its insureds. Burton v. Republic Ins. Co., 845 A.2d 889, 899 (Pa. Super. Ct. 2004) (internal citations omitted).

The court refused to dismiss the Selmeks’ bad faith claim, finding that a plausible bad faith claim could arise “where an insurer, in bad faith, declines to inform an insured as to coverage for temporary repairs.”3

1 Selmek v. State Farm Fire and Cas. Co., No. CIV.A. 14-388, 2014 WL 6612906 (W.D. Pa. Nov. 20, 2014).
2 Id. at 2.
3 Id. at 8.