The court ruled that the insured's claim for vandalism of his house by a renter and for bad faith survived the insurer's motion to dismiss. Wehrenberg v. Metro. Prop. & Cas. Ins. Co., 2015 U.S. Dist. LEXIS 103758 (W.D. Pa. Aug. 7, 2015).
The insured's home was insured by a homeowner's policy issued by Metropolitan. The insured rented his home to Alphonso Hyman in October 2011. In lieu of rent, Hyman was to pay the mortgage company the equivalent of his rent each month.
In early 2012, Hyman stopped making the monthly rent/mortgage payments. The insured went to the home and found the locks had been changed. Looking in the windows, he saw the interior had been gutted. When the insured reached Hyman, Hyman said he was a contractor and was fixing the structural problems and would put the house back together. He also promised to make up late payments to the mortgage company. The insured did not report what he found to Metropolitan.
A year later, mortgage payments again stopped. When the insured went to the house, he found not only the first floor in the same disassembled condition, but that the basement and second floor had also been gutted.
The insured then filed a claim with Metropolitan, asserting that the property had been vandalized. Metropolitan denied the claim and the insured lost the home in foreclosure.
The insured sued for breach of contract and bad faith. Metropolitan filed a motion to dismiss. The motion was denied. First, Metropolitan did not demonstrate that the facts alleged could never be "vandalism or malicious mischief," which would be covered under the policy.
Although the insured did not report any loss after his first visit to the house, he did report the loss to Metropolitan following his second visit when he found additional damage. Thus, it was plausible that he did not acquiesce in the second incident in which Hyman removed even more elements from the home without the insured's permission. What took place may or may not have been vandalism - it was too soon to tell.
Because the complaint stated a plausible breach of contract claim, Metropolitan's argument to dismiss the bad faith claim also failed.