Shoemaker v. Commonwealth Bank

The Shoemakers (plaintiffs) obtained a $25,000 loan from Commonwealth Bank (Commonwealth) (defendant) and gave Commonwealth a mortgage on their home. The mortgage agreement required the Shoemakers to carry insurance on the home. On January 20, Commonwealth sent the Shoemakers a letter stating that their insurance had been cancelled and that, if they did not obtain insurance, Commonwealth would be forced to purchase the insurance and add the premium to the loan. Mrs. Shoemaker claims that a Commonwealth representative called her and told her that if the Shoemakers did not get insurance, then Commonwealth would do it and add the premium to the loan. Mrs. Shoemaker claims she instructed Commonwealth to obtain the insurance. The Shoemakers claim they had no further communications with Commonwealth regarding insurance. Commonwealth claims that it did send the January 20 letter, but that a representative did not contact the Shoemakers. Commonwealth further claims that it additionally sent a February 4 letter informing the Shoemakers that Commonwealth had obtained insurance, and that it sent an October 25 letter informing the Shoemakers that Commonwealth would let that insurance expire December 1. After the insurance expired, the home caught fire and was destroyed. The Shoemakers claim that they did not receive the October 25 letter and, therefore, they found out about the cancelled insurance until after the fire. Mrs. Shoemaker filed suit, alleging fraud, promissory estoppel, and breach of contract. Mr. Shoemaker was joined as a plaintiff. Commonwealth filed a motion for summary judgment. The trial court found that Commonwealth’s promise required it to obtain insurance, but did not require Commonwealth to maintain it. The trial court, therefore, held that because Commonwealth had obtained insurance, it had not broken a promise and it had not made misrepresentations to the Shoemakers. The trial court granted Commonwealth’s motion. The Shoemakers appealed to the Superior Court of Pennsylvania.