Peter Cecero, As Administrator of the Estate of Pasqualina Cecero v. Allstate Insurance Co

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 07-4740
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PETER CECERO, AS ADMINISTRATOR OF THE ESTATE
OF PASQUALINA CECERO,
v.
ALLSTATE INSURANCE CO.,
Appellant.
On Appeal from the United States District Court
For the Eastern District of Pennsylvania
(Civ. No. 06-286)
District Court Judge: Honorable Clifford Scott Green, Honorable John R. Padova
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Argued on November 20, 2008
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Before: FUENTES, HARDIMAN and GARTH, Circuit Judges,
(Opinion Filed: December 16, 2008)
Allan D. Goulding, Jr., Esq. (Argued)
Curtin & Heefner, LLP
250 North Pennsylvania Avenue
P.O. Box 217
Morrisville, PA 19067
Attorney for Defendant/Appellant

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Pasqualina Cecero was the named insured on the Allstate Policy.1
2
Robert B. Ponziano, Esq. (Argued)
Law Office of Robert B. Ponziano
118 N. State Street
Newtown, PA 18940
Attorney for Plaintiff/Appellee
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OPINION
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GARTH, Circuit Judge:
Appellant Allstate Insurance Company (“Allstate”) appeals from the December 3,
2007 order of the United States District Court for the Eastern District of Pennsylvania
denying its post-trial motions for judgment as a matter of law and for a new trial. Among
other rulings, Allstate challenges a ruling of the trial judge which removed its principal
defense from the jury’s consideration. We have jurisdiction under 28 U.S.C. § 1291. We
will vacate the District Court’s order and remand for a new trial.
I.
The late Pasqualina Cecero, now represented by her administrator (“Cecero”), was
the owner of a single-family dwelling in Feasterville, Pennsylvania. The home was
heated by oil supplied by a company called Hollywood Oil (“Hollywood”) and was
covered by an Allstate Homeowner’s Insurance Policy (the “Allstate Policy”).1
Cecero lived in the house until August 2004 when she was hospitalized for two-

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Peter became his mother’s guardian based on a Power of Attorney in September,2
2004.
3
and-a-half weeks. After a time in rehabilitation, Cecero went to live with her son Peter
Cecero (“Peter”). Two months later, Cecero moved to an assisted living facility. In2
February of 2005, Cecero was admitted to the hospital again, and on March 10, 2005, she
was sent to a nursing facility. In October 2006, Cecero died without ever returning to her
house. At all relevant times, no one was living in her house.
On April 7, 2005, it was discovered that Cecero’s home had sustained water
damage from a broken pipe that supplied water to the dishwasher. Allstate conducted an
investigation and determined that the house had been unoccupied for eight months, the
thermostat had been disconnected, Hollywood had not performed annual maintenance
during the winter of 2004-2005, and Peter did not check the oil tank levels. Allstate later
discovered that the oil tank was nearly full and contained six inches of water, which could
have rendered the furnace inoperable.
Consequently Allstate denied coverage stating that the broken pipe had frozen due
to a lack of reasonable care to maintain heat in the unoccupied house. The relevant
exclusion in the Allstate Policy denied coverage for damage caused by freezing of pipes
or overflow from appliances caused by freezing “while the building or structure is vacant,
unoccupied, or being constructed unless you have used reasonable care to: a) maintain
heat in the building or structure . . . .” (hereinafter “the Occupancy/Heat Exclusion”)(the
other exception in the Occupancy/Heat Exclusion is not relevant to the Cecero claim).

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The District Court granted judgment as a matter of law on Cecero’s bad faith claim.3
Cecero did not appeal.
District Court Judge Green disclosed the situation on the record and granted an4
opportunity for comment, but all counsel declined any further discussion of the matter.
Allstate did not move for District Court Judge Green to recuse himself, nor did Allstate
move for a mistrial.
4
Cecero sued Allstate for breach of contract and bad faith. Allstate defended that
the Occupancy/Heat Exclusion barred coverage. Allstate also counterclaimed on the
basis that a fraud-based exclusion excluded coverage because Cecero allegedly had not
been forthright as to the timing of the loss, the upkeep of the house, and when she had
lived there.3
After the parties presented their evidence, and prior to instructing the jury, the
District Court ruled as a matter of law that the water damage was covered by the Allstate
Policy. The District Court found that reasonable care to maintain heat had been used and
that the Occupancy/Heat Exclusion did not exclude coverage. The jury subsequently
awarded Cecero $227,000 and found in favor of Cecero on Allstate’s counterclaim.
Allstate filed post-trial motions arguing that the District Court erred in ruling, as a
matter of law, that there was insurance coverage, and that the Court improperly removed
the Occupancy/Heat Exclusion from the jury’s consideration.
Allstate also argued that District Court Judge Green erred in not recusing himself
and in denying a mistrial after Cecero’s counsel, Mr. Ponziano, engaged in allegedly
inappropriate ex parte communications with the District Court.4

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5
District Court Judge Padova, to whom the case was transferred after the untimely
passing of District Court Judge Green, denied Allstate’s post-trial motions by order and
opinion dated December 3, 2007. Allstate timely appealed.
II.
At trial, District Court Judge Green had stated:
Under [the Occupancy/Heat Exclusion], I do not
believe that there is evidence from which a jury could find
that coverage is not provided for this house at the time.
First given the circumstances . . . it is clear to me that
the only evidence here has to be that when recovered from her
disability, that the insured intended to return to the building.
There is evidence, of course, the evidence is clear that she
intended to maintain heat in the building. The gentleman
from Hollywood has testified that they annually supplied oil,
that oil had been supplied this year, that they had had the
thermostat or thermostats maintained in an attempt to balance
the heating demands of husband and wife when they were
there, and under those circumstances, it seems to me that they
have done that which is reasonable.
. . .
But certainly [the loss] occurred by a reason other than
any failure on the part of the insured to properly maintain the
building. Even if it had resulted . . . in January or February, it
seems to me that you would have a covered loss. . . . [T]here
has been no failure on the part of the insured to keep the
property heated, heat’s been provided under every – under all
the evidence, heat has been provided. There is reasonable
care to continue to maintain the heat, and accordingly I would
find that the loss is a covered loss, and not one which is
excluded by policy.
District Court Judge Green then instructed the jury that a covered occurrence had

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We find unpersuasive Cecero’s argument that the District Court merely held that the5
house, itself, was covered for water damage, but that the coverage of this particular water
damage was still up to the jury. The record is clear that this is not the case.
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taken place, but that the jury was to consider damages, the fraud counterclaim, and the5
fraud exclusion defense. The jury was not instructed to consider the Occupancy/Heat
Exclusion. The District Court thus granted, in part, Cecero’s trial motion for judgment as
a matter of law.
“We exercise plenary review of an order granting or denying a motion for
judgment as a matter of law and apply the same standard as the district court. Such a
motion should be granted only if, viewing the evidence in the light most favorable to the
nonmovant and giving it the advantage of every fair and reasonable inference, there is
insufficient evidence from which a jury reasonably could find liability.” Ambrose v.
Twp. of Robinson, 303 F.3d 488, 492 (3d Cir. 2002)(internal citations omitted).
Viewing the evidence in the light most favorable to Allstate, we hold that the
District Court erred because Allstate presented sufficient contradictory evidence on
reasonable care to create a jury question. “The question is not whether there is literally no
evidence supporting the party against whom the motion is directed but whether there is
evidence upon which the jury could properly find a verdict for that party.” Id. at 493
(citation and quotation marks omitted).
When the District Court ruled on reasonable care, it focused only on two pieces of
evidence proffered by Cecero: that Hollywood had delivered oil, and that the thermostats

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The District Court did not even mention the Cecero family’s alleged frequent visits to6
the home, the neighbor’s testimony that he saw the family there often, or Peter’s
testimony that the thermostat was always in the 60-degree range.
Seeley opined that the pipe breakage was caused by freezing temperatures and a lack7
of heat in the house, and that the initial water damage must have been caused earlier than
April, 2005. The water he discovered in the oil tank would have shut off the oil burner,
which would disable the furnace and cut off heat to the house, thus causing the pipe to
freeze during a “cold snap” in January 2005.
Correlating this data to an increase in electrical bill costs starting in January and
lasting until August, Seeley noted that if there had been a pipe failure around January
(caused by freezing), the electric water heater would have continuously run in order to
maintain temperatures to compensate for a constant outflow of water. The continuous
running of the water heater would explain the higher energy bills.
7
had been maintained. Peter testified that he checked the thermostat, which read 626
degrees, but he was not aware that the analog thermostat had been replaced by a digital
one. Cross-examination revealed that Peter did not check the oil tank levels. The oil tank
was nearly full, and water that had formed at the bottom of the tank could have shut down
the house’s heating system. This evidence calls into question whether and how often the
Cecero family checked the temperature in the house. The contract with Hollywood also
included an annual maintenance check-up on the heating system, which Peter admits he
did not arrange in 2004.
Various witnesses disagreed as to the cause of the loss. A major contention at trial
was whether the loss was caused by a spontaneous failure of the pipe or whether it was
caused by freezing, as Allstate contended. Allstate’s investigator, Mr. Seeley, explained
his belief that the loss was caused by freezing. Cecero’s witness, Mr. Frederick, testified7
that he believed the loss was caused by spontaneous breakage from an external force or a

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defective pipe. He testified that the loss was not caused by freezing.
The District Court’s finding of reasonable care resolved the causation issue. The
District Court found that reasonable care had been used. Because there was ample
conflicting evidence from which a reasonable jury could have decided that reasonable
care had not been used, the District Court should have allowed the jury to decide the
reasonable care issue and the causation question in the context of the Occupancy/Heat
Exclusion. We will remand for a new trial.
III.
Allstate also argues that we should grant a new trial because District Court Judge
Green did not recuse himself or declare a mistrial after Cecero’s counsel, Mr. Ponziano,
engaged in allegedly inappropriate ex parte communications with the District Court. See
note 4, supra. We are not persuaded by Allstate’s argument.
We will vacate the December 3, 2007 judgment of the District Court and remand
for a new trial.

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