Before the court was the motion of summary judgment brought by the plaintiffs and the cross-motion for summary judgment filed by State Automobile.

Chasanow denied State Automobile's motion for summary judgment, while granting in part and denying in part the plaintiffs' motion.

Chasanow in part sided with the plaintiffs regarding their breach of contract claim, but determined facts surrounding whether the insurance company misrepresenting the delay in payment was the result of a good faith mistake or misunderstanding remained disputed.

In 2015, a fire occurred at one of the businesses the plaintiffs operated, Smokey Joe's Grill and Boardwalk Café, damaging the building and causing the plaintiffs to lose business income and incur extra expenses. As a result the plaintiffs filed a claim with State Automobile to cover the loss and extra expenses.

In 2018, an umpire and appraisers issued an appraisal award for a total of $671,638; the plaintiffs then, seeking the payment, filed a proof of loss.

State Automobile refused to pay, "arguing that it was improper for the appraisers to have decided a period of restoration that conflicted with Defendant's own determination that the period of restoration ran from February 2015 to February 2016."

However, State Automobile later paid the plaintiffs $364,735, based on the sum of the loss amounts awarded by the appraisers. A couple weeks later, State Automobile filed suit, looking to modify or vacate the appraisal award, according to the opinion.

Following years of litigation, the parties conducting discovery. Plaintiffs then filed a motion for summary judgment, which State Automobile responded to by filing a cross-motion for summary judgment and opposition the plaintiffs' motion. Plaintiffs responded in opposition to State Automobile's motion.

In her analysis, Chasanow sided with the plaintiffs regarding their breach of contract claim, concluding the evidence submitted by both parties established that the period of restoration began on the date of the loss in February 2015 and ended mid to late April 2016, and that, under the loss scheduled originally awarded by the appraisers, plaintiffs were entitled to $235,274.

According to the court this number "represents the total amount of loss from February 2015 through April 2016 ($671,638) minus the $436,364 already paid by Defendant," the opinion said.

Plaintiffs had contended that it was undisputed that the period of restoration for their claim under their policy with State Automobile ran from February 2015 to April 2016, and therefore, they were entitled to a judgment as a matter of law regarding their breach of contract claims "based on Defendant's failure to pay the full amount the appraisers determined was due for that period."

However, State Automobile argued it was entitled judgment on the plaintiffs' claims as the period of restoration required under the policy had ended 12 months prior to the date of loss, and therefore, it had more than satisfied its obligations under the contract by paying for the losses incurred over the 13-month period between February 2015 and 2016, according to the opinion.

"The only issue that the parties seem to disagree about is whether the six months of repairs was to include February 2015 through April 2015 or whether the six-month repair period was to begin after the shrink-wrapping was removed," Chasanow wrote. "A review of the record, however, reveals that there is no genuine issue for trial and that the period of restoration was from February 2015 through April 2016."

"The parties agreed to shrink-wrap the building from approximately April to October 2015, and the six months of repairs could not have begun until after the shrink-wrap was removed. Therefore, the twelve-month period to which Defendant's expert referred must have spanned from April 2015 to April 2016—not February 2015 to February 2016," she added. "Defendant has not presented any evidence that contradicts this conclusion."

However, in regard to the lack of good faith claim the plaintiffs brought, Chasanow denied both parties' motions for summary judgment, determining disputed facts prevented resolution of the claim as a matter of law.

The plaintiffs had attempted to argue that the undisputed facts established that State Automobile had failed to act in good faith when processing their claim, and that it had failed to act in good faith as it reassigned the claim to a claims examiner, despite there being no coverage issues involved, preventing the claim from being settled, and misrepresenting that it had paid the plaintiffs the undisputed portion of the business income loss and actual cash value of the repairs before it actually had.

State Automobile argued that even if these statements were true, there was insufficient evidence to support a claim for lack of good faith.

According to the court, a claim for lack of good faith, under Md. Code, Cts. & Jud. Proc. Section 3-1701 and Ins. Section 27-1001, defines good faith as "an informed judgment based on honesty and diligence supported by evidence the insurer knew or should have known at the time the insurer made a decision on a claim."

However, the court determined there were too many disputed facts to resolve the claim on summary judgment motion, with most of the details surrounding the good faith claim being disputed and undetermined.

"We think the judge got it just right, the only thing left in this case is the lack of good faith," said C. Thomas Brown of Silver & Brown, in Fairfax, noting that they believe the trier of fact will ultimately decide that State Auto didn't act in good faith.

State Automobile's attorney, Matthew Malamud of Horst Krekstein & Runyon, in Plymouth Meeting, Pennsylvania, did not respond to a request for comment.