Pennsylvania court holds that a dispute over the value of property, for purposes of insurance coverage, is a material fact that must be settled by the court.

In Brown v. Everett Cash Mut. Ins., the insureds’ home was totally destroyed by a fire.  Following the loss, the insurer, based on an investigation conducted by its adjuster, issued the insureds a reimbursement check for the replacement cost of the property less depreciation.  The insureds refused to sign the check, and ultimately commenced a lawsuit against their insurer claiming, inter alia, they were entitled to the full replacement value of the property (as opposed to the actual cash value, which was paid by their insurer).  Eventually, the insurer moved for summary judgment, which was granted by the lower court.

On appeal, the Pennsylvania Superior Court concluded that given the “rather large discrepancy” between the insureds’ and the insurer’s value of the property, this discrepancy gave rise to a material fact that only the trial court could address.  As such, the Pennsylvania Superior Court concluded the lower court improperly granted summary judgment on this issue.

Consequently, this case suggests that an undefined “large dispute” over the value of a claimed loss could act as bar to an insurer prevailing in a motion for summary judgment, as a Pennsylvania court may deem this to be a genuine issue of material fact.

Thanks to Colleen Hayes for her contribution to this post.