[co-author: Tricia Kazinetz]

On December 24, 2013, a fire destroyed Plaintiffs’ home.  Plaintiffs’ homeowners’ policy, issued by State Farm, required insureds to submit personal property inventories within sixty days after a loss.  Three days after the fire, a State Farm agent notified Plaintiff Coenen that she needed to complete a personal property inventory before her claim could be processed.  In March 2014, a public adjustor also advised Coenen that she needed to prepare a personal property inventory.  These instructions notwithstanding, Coenen did not submit an inventory until June 19, 2015, approximately eighteen months after the fire.
 
State Farm eventually paid Plaintiffs approximately $347,000.  The only remaining amount in dispute was $16,789.02 for restorative landscaping and debris removal.  Plaintiffs sued State Farm for breach of contract and bad faith for failure to pay this amount.
 
State Farm moved for summary judgment, arguing that it reasonably and promptly compensated Plaintiffs for all covered losses and that any delay in payment was the result of Plaintiffs’ own failure to perform their obligations under the insurance contract, specifically their failure to provide a personal property inventory within sixty days of the loss. 
 
In ruling on State Farm’s motion, the court recognized that the rights and obligations of the Plaintiffs and State Farm were governed by the insurance contract.  Notably, the court found that the insurance contract placed the responsibility on Plaintiffs to control the timing and amount of payments received by requiring them to submit a personal property inventory within sixty days of the loss.  The court also pointed out that State Farm had provided Plaintiffs with several payments, including two advance payments.   
 
The court ultimately held that Plaintiffs failed to satisfy their obligations under the policy by waiting eighteen months to submit their personal property inventory—notwithstanding the notice from the State Farm agent and the public adjustor—and that State Farm justifiably waited for the inventory before fully paying the claim.  Accordingly, the court found that there was no merit to Plaintiffs’ bad faith claim because any “delay” by State Farm was the direct result of Plaintiffs’ own failure to perform their contractual duties, not State Farm’s lack of a reasonable basis for denying benefits.  The court therefore determined that no reasonable juror could conclude that State Farm acted in bad faith and dismissed the claim. 

Turner v. State Farm Fire & Cas. Co., No. 3:15-CV-906, 2017 WL 2345538 (M.D. Pa. May 31, 2017).