Sentry Insurance v. Rice
Filing
35
OPINION denying 23 Plaintiff's Motion for Summary Judgment. Entered by Judge Sue E. Myerscough on 7/20/2011. (CT, ilcd) Modified on 7/20/2011 - Correct filing Judge (CT, ilcd).
E-FILED
Wednesday, 20 July, 2011 04:10:22 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
SENTRY INSURANCE, A MUTUAL )
COMPANY,
)
)
Plaintiff,
)
)
v.
)
)
KATHERINE RICE,
)
)
Defendant.
)
No. 09-3013
OPINION
SUE E. MYERSCOUGH, United States District Judge.
This cause is before the Court on the Motion for Summary
Judgment (Motion) (d/e 23) filed by Plaintiff Sentry Insurance, a Mutual
Company. In the Motion, Plaintiff argues Defendant Katherine Rice
concealed and misrepresented numerous material facts in her personal
property claim, which voids all coverage under the insurance policy. For
the reasons that follow, Plaintiff’s Motion is DENIED.
I. BACKGROUND
On October 18, 2006, a fire occurred at Plaintiff’s home located at
214 S. Paul Street, Springfield, Illinois (the subject property). At the
time of the fire, the subject property was covered by a homeowner’s
policy issued by Defendant to Plaintiff (the Policy). Plaintiff lived in the
subject property with her six children, ages approximately 3 to 20.
A.
Background Facts
The Policy provided a limit of liability in the amount of $145,250
for personal possessions. For personal possessions, the Policy provided in
relevant part as follows:
For losses to your personal possessions . . . we have
the option to repair or replace your property.
We’ll pay the cost of repair or replacement of your
damaged personal possessions or a loss to articles
described in a schedule attached to this policy
without deduction for depreciation unless
specifically described below. We’ll pay the
smallest of the following amounts:
#
Replacement cost at the time of loss;
#
The actual cost you incur to repair the
personal possession;
#
Any special limits on certain property
described in this policy;
#
The limit of coverage shown on the
declarations page or on an attached schedule.
Page 2 of 27
When the cost of repair or replacement for the
damaged property is more than $500, we will pay
replacement cost less depreciations until actual
repair or replacement is completed. (Emphases in
original.)
The Policy defines “you” and “your” to include (1) the person whose
name appears on the declaration page; (2) anyone under the age of 21 or
anyone under the age of 25 who is unmarried and a full-time student;
and (3) “your relatives, if a resident of your household.” (Emphases in
original.)
In December 2006, Defendant submitted to Plaintiff a 39-page
Personal Property Inventory Form (Inventory) with a cover sheet. The
Inventory listed the items of property Defendant believed were a total
loss, the age of the property, and the current replacement cost for each
item of property. The total estimated replacement cost of all the items
listed by Defendant was $409,515.79. On the cover sheet, Defendant
indicated that the prices listed were approximate amounts, that some
prices might be slightly higher or slightly lower, and that she was unable
to value certain items. Defendant also indicated that she had additional
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contents that were a loss, but she was concluding her Inventory.
Defendant also completed a Sworn Statement in Proof of Loss
(Proof of Loss) dated December 23, 2006. In the Proof of Loss,
Defendant completed blanks on a preprinted form. In paragraph 7,
which read, “The whole loss and damage was . . .” Defendant wrote:
“Property $102,437.71, contents 145,250.” In paragraph 8, which read
“The amount (less Ded. of $
) claimed under this policy is $
,” Defendant wrote “1,750.00" for the deductible and “unknown at this
time” for the amount claimed under the Policy.
In January 2009, Plaintiff filed a Complaint for Declaratory
Judgment. Plaintiff alleged Defendant was barred from recovery under
the Policy because she violated two Policy provisions by : (1) failing to
cooperate and comply with her responsibilities in the claim and
investigation; and (2) intentionally concealing and/or misrepresenting
material facts or circumstances, engaging in fraudulent conduct,
dishonest or criminal conduct, or making false statements surrounding
the fire loss, the claim presented, and the insurance. Defendant filed a
Page 4 of 27
Counterclaim alleging breach of contract and vexatious refusal to pay.
Defendant also alleges that as a result of Plaintiff and Plaintiff’s agents’
actions, Plaintiff has waived the right to contest Defendant’s claim for
monies due under the Policy.
B.
The Motion for Summary Judgment
In March 2011, Plaintiff filed the Motion at issue herein. The
Motion is based on the “Concealment Or Fraud” provision of the Policy:
Concealment Or Fraud
This entire policy will be void with respect to all
persons insured under this policy if, whether
before or after a loss, any person insured under
this policy has:
#
Intentionally concealed or misrepresented
any material fact or circumstance; or
#
Intentionally caused a loss; or
#
Engaged in fraudulent, dishonest[,] or
criminal conduct; or
#
Made false statements;
relating to this insurance.
The Policy also contains the following Endorsement:
Page 5 of 27
The following is added to the Concealment Or
Fraud section:
The Concealment Or Fraud Condition does not
apply once the policy has been in effect for one
year or one policy period, whichever is less.
However, we may cancel or nonrenew this policy
in accordance with the terms of the Cancellation
or Renewal provisions of the policy.
Plaintiff asserts the undisputed facts demonstrate Defendant
intentionally concealed and misrepresented numerous material facts in
her claim, which voids all coverage under the insurance policy. Plaintiff
also seeks judgment as a matter of law on Defendant’s counterclaim.
Specifically, Plaintiff argues the evidence demonstrates Defendant
misrepresented her personal property contents claim. Plaintiff asserts
that it was impossible that Defendant accumulated more than $409,000
worth of personal property between her 2001 bankruptcy filing–which
listed personal property totaling $650–and the date of the fire. Plaintiff
also points to Defendant’s March 2005 divorce proceedings, during
which Defendant listed no household goods or furniture on her financial
affidavit. Plaintiff also asserts that given Defendant’s income–$37,755 in
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adjusted gross Income in 2004 and $5,547 in adjusted gross income in
2005– and her banking records– which reflected negative or near negative
balances and overdraft fees–Defendant could not have purchased over
$409,000 in personal property in five years.
C.
Facts Relating to the Motion
The facts relevant to the Motion are as follows.
In April 2001, Defendant filed a Voluntary Petition for Chapter 7
Bankruptcy in the United States Bankruptcy Court for the Central
District of Illinois. On August 6, 2001, she was discharged under
Chapter 7. On August 13, 2001, Defendant and her husband filed a
Voluntary Petition for Chapter 13 Bankruptcy in the United States
Bankruptcy Court for the Central District of Illinois. Defendant’s
Schedule B, filed August 22, 2001, listed a total of $650 in personal
property–$400 for household goods and $250 for wearing apparel.
In August 2002, the Bankruptcy Court granted Defendant and her
husband permission to obtain a Small Business Administration (SBA)
Disaster Loan in the amount of $46,000 to repair or replace property
Page 7 of 27
damaged in April 2002. The amount borrowed included $18,000 to
repair or replace disaster damaged personal property. Defendant
completed the Chapter 13 Plan and was discharged October 5, 2006,
approximately two weeks before the fire.
In March 2005, Defendant filed a Petition for Dissolution of
Marriage from her husband. The Affidavit of Income, Expenses, Assets,
and Debts filed March 15, 2006, listed no household goods and
furniture.
In April 2007, April 2008, and August 2008, Defendant was
examined under oath by Plaintiff. Defendant testified she prepared the
Inventory. For the age of each item she listed, Defendant put the date
she acquired it. For the dollar figure, Defendant put the current
replacement cost.
According to Defendant, she asked Plaintiff’s adjuster whether
anyone would help her complete the form, and she was told no.
Plaintiff’s adjuster told her to go to the store or look on the Internet to
find out how much it would cost to buy a new item. Plaintiff’s adjuster
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also told Defendant to “try to guesstimate on what it may cost”, then to
bring the worksheet back, and they would go over it together. According
to Defendant, she and the adjuster went over the first draft. When she
prepared a second draft, the adjuster told her that he “didn’t have
anything else to do with it” and to send the Inventory to the main office1.
Defendant testified she bought a large number of items between
filing for bankruptcy and the fire, describing herself as a “big time
spender” and stating “I always spend. I just spend, spend, spend.”
Defendant also explained that the items on the Inventory included items
that were gifts and items bought used from other individuals and at
auction.
Defendant testified that between her bankruptcy and the fire, she
once received between $10,000 and $20,000 from her ex-husband and
Defendant also attempts to rely on a report prepared by Michael Dohm of
MidAmerica Loss Services regarding his review of the Inventory. However, the report
is not authenticated. See e.g., Article II Gun Shop, Inc. v. Gonzales, 441 F.3d 492,
495 (7th Cir. 2006) (district court properly considered reports authenticated by
affidavit); Samaritan Health Center v. Simplicity Health Care Plan, 459 F.Supp.2d
786, 799 (E. D. Wis. 2006) (“to get an expert’s opinion into the record for summary
judgment usually involves use of an affidavit or deposition testimony). Therefore,
this Court does not consider it.
1
Page 9 of 27
“sometimes” received sums of $2,000 to $3,000 from her sister.
Defendant’s ex-husband also paid child support and paid some of
Defendant’s monthly bills.
When asked about the discrepancy between the filing of the
Affidavit of Income, Expenses, Assets, and Debts in the dissolution
proceeding–which listed no household goods or assets–and the Inventory,
Defendant testified her attorney told her to stop filling out the forms and
that she, the attorney, would fill them out. Defendant also testified that
household goods should have been listed.
At the April 2007 deposition, when asked the amount she was
asking for from the insurance company, Defendant responded,
“[w]hatever I’m entitled to.”
II. JURISDICTION AND VENUE
Plaintiff is a corporation organized and existing under the laws of
Wisconsin, with its principal place of business located in Stevens Point,
Wisconsin. Plaintiff is licensed and authorized to do business as an
insurance company in Illinois. Defendant is a resident of Sangamon
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County, Illinois. Because complete diversity exists, and the amount in
controversy exceeds $75,000, this Court has subject matter jurisdiction
under 28 U.S.C. § 1332(a)(1). Venue exists in this judicial district
because a substantial part of the events or omissions giving rise to the
claim occurred here. See 28 U.S.C. §1391(a)(2).
III. STANDARD OF REVIEW
Summary judgment is appropriate “if the pleadings, depositions,
answers to interrogatories and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a matter of
law.” See Fed.R.Civ.P. 56(c); see also, Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). A moving party must show that no reasonable factfinder could return a verdict for the non-moving party. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 254 (1986); Gleason v. Mesirow Fin.,
Inc., 118 F.3d 1134, 1139 (7th Cir. 1997).
IV. ANALYSIS
As this case is founded on diversity jurisdiction, the Court “must
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apply the law of the state as it believes the highest court of the state
would apply it if the issue were presently before that tribunal.” State
Farm Mut. Auto. Ins. Co. v. Pate, 275 F.3d 666, 669 (7th Cir. 2001).
Absent controlling authority from the State’s highest court, federal courts
exercising diversity jurisdiction may consider decisions of the State’s
lower courts, courts of other jurisdictions, and other persuasive authority.
See Stephan v. Rocky Mountain Chocolate Factory, Inc., 129 F.3d 414,
417 (7th Cir. 1997).
A.
The Policy Endorsement Issue
Neither party originally addressed the Endorsement, which provides
as follows;
The following is added to the Concealment Or
Fraud section:
The Concealment Or Fraud Condition does not
apply once the policy has been in effect for one
year or one policy period, whichever is less.
However, we may cancel or nonrenew this policy
in accordance with the terms of the Cancellation
or Renewal provisions of the policy.
This Court asked the parties to provide supplemental briefing, and they
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have done so. See Fed.R.Civ.P. 56(f) (court may grant summary
judgment in favor of the nonmovant after giving notice and a reasonable
time to respond). Defendant argues the Endorsement provision applies
and she is entitled to partial summary judgment on the portion of
Plaintiff’s claim relying on the Fraud Or Concealment provision. Plaintiff
argues the Endorsement provision does not apply.
The construction of a insurance contract is a question of law.
Chatham Corp. v. Dann Ins., 351 Ill. App. 3d 353, 358 (2004). The
same rules of construction that apply to other types of contracts also
apply to insurance contracts. Country Mut. Ins. Co. v. Teachers Ins. Co.,
324 Ill. App. 3d 246, 248-49 (2001). That is, this Court must ascertain
and give effect to the intent of the parties, which is determined by
examining the language of the contract. Stark v. Illinois Emcasco Ins.
Co., 373 Ill. App. 3d 804, 807 (2007). In doing so, this Court
construes the policy as a whole, taking into account the type of
insurance, the risks undertaken, and the purpose of the contract.
Country Mut. Ins. Co., 324 Ill. App. 3d at 248-49. “A court must read
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the provision in its entire factual context and not in isolation.” Allstate
Ins. Co. v. Amato, 372 Ill.App.3d 139, 144-45 (2007). If the terms of
the policy are clear and unambiguous, they must be given their plain and
ordinary meaning. Stark, 373 Ill. App. 3d at 807. If the terms of the
policy are susceptible to more than one meaning, then the terms are
ambiguous. Pekin Ins. Co. v. Wilson, 237 Ill. 2d 446, 456 (2010), citing
American States Ins. Co. v. Koloms, 177 Ill. 2d 473, 479 (1997).
Ambiguities are construed against the insurance company. Id.
Plaintiff argues the Endorsement merely incorporates Section 154
of the Illinois Insurance Code which precludes the rescission of a policy
based on misrepresentations made in the negotiation of a policy that has
been in effect for more than one year. See 215 ILCS 5/154 (noting
circumstances under which a policy may be rescinded for a
misrepresentation or false warranty made by an insured in the
negotiation of a policy of insurance or breach of a condition of such
policy). According to Plaintiff, the Endorsement does not apply because
the misrepresentations in this instance were not made in the application
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for insurance.
However, the plain language of the Endorsement is not so limited.
The Endorsement does not reference section 154 and does not limit the
applicability of the endorsement to misrepresentations made in the
negotiation for a policy of insurance.
Instead, the plain language of the Endorsement provides that the
Concealment Or Fraud Condition does not apply if the policy has been in
effect the lesser of one year or one policy period. The Endorsement says
nothing about limiting the Endorsement to misrepresentations made in
the negotiation of the policy.
This Court agrees, however, with Plaintiff’s additional argument
that the Policy at issue (October 2006 through October 2007) was in
effect for less than one year. The Policy term commenced October 3,
2006, and the fire occurred October 16, 2006.
The Endorsement also provided, however, that the Concealment Or
Fraud Condition does not apply if the policy has been in effect for “one
policy period.” The parties do not expressly address the “one policy
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period” language and do not provide any explanation for the meaning of
the term “one policy period” in the Endorsement.
The Policy does not define “policy period.” Policy period could
refer to a policy period less than one year, meaning that the Concealment
Or Fraud provision does not apply if, in the case of a nine-month policy,
the policy has been in effect for one nine-month policy period. Policy
period could also refer to instances where a policy one year in length or
less is renewed.
Here, Defendant previously had a policy of insurance with Plaintiff
that covered the period of October 3, 2005, through October 3, 2006.
The policy was apparently renewed for the period of October 3, 2006,
through October 3, 2007.
“In Illinois, the renewal of an insurance policy is generally
conceived to be a new contract.” Doe v. Illinois State Medical InterInsurance Exchange, 234 Ill. App. 3d 129, 137 (1992); see also Burmac
Metal Finishing Co. v. West Bend Mutual Ins. Co., 356 Ill. App. 3d 471,
480 (2005) (renewal of a policy is a new contract but unless otherwise
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provided, “the terms and conditions of the original policy become part of
the renewal contract of insurance”). Although the Policy covering 2006
through 2007 was a new contract of insurance, it is unclear whether that
is considered the second policy period. See, e.g., Executive Risk
Idemnity, Inc. v. Chartered Benefit Services, Inc., 2005 WL 1838433, *9
(N.D. Ill. 2005) (noting that the renewal of a policy does not create a
single policy period for claims reporting purposes).
Here, both policies contain the same policy number: 26-68720-53.
Both policies had the same terms but had different coverage limits and
premiums. The facts suggest that Defendant was covered by policy No.
26-68720-53 from October 2005 to October 2006 (one policy period)
and then by policy No. 26-68720-53 from October 2006 through 2007
(second policy period).
Because the parties did not adequately address this issue, the Court
declines to enter summary judgment in favor of either party on this issue
at this time. However, the issue raised by this Policy provision is
sufficient to deny summary judgment in favor of Plaintiff.
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B.
Other Questions of Fact Remain
Even if the Endorsement does not apply, genuine issues of material
fact remain regarding whether Plaintiff can void the Policy pursuant to its
Concealment Or Fraud provision. The Policy’s Concealment Or Fraud
provision provides that the entire policy is void if an insured person
“[i]ntentionally concealed or misrepresented any material fact or
circumstance.”
Plaintiff asserts that Defendant “intentionally concealed and
misrepresented numerous material facts in her claim, which voids all
coverage under the insurance policy.” Plaintiff claims Defendant “grossly
inflated her claimed losses in her Sworn Proof of Loss, beyond any
reasonable explanation.” Despite declaring in 2001 that she had only
$650 in personal property (bankruptcy court) and in 2006 that she had
no household goods or furniture (divorce court), Defendant claimed in
her December 2006 Proof of Loss that she had over $409,00 in personal
property that was destroyed by fire. Plaintiff further asserts Defendant
could not have obtained that much personal property given her income.
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Defendant first responds to Plaintiff’s Motion by arguing that the
Inventory was not part of the Proof of Loss. Defendant notes the actual
Proof of Loss states that the amount claimed under the policy is
“unknown at this time.” Therefore, according to Defendant, no
misrepresentation was made in the Proof of Loss.
The Proof of Loss required Defendant to assert, in part that:
no articles are mentioned herein or in annexed schedules but
such as were destroyed or damaged at the time of said loss; no
property saved has in any manner been concealed, and no
attempt to deceive the said company, as to the extent of said
loss, has in any manner been made. Any other information
that may be required will be furnished and considered a part
of this proof.
Defendant testified she was told by Plaintiff to complete the inventory.
The cover sheet Defendant sent to Plaintiff with the Inventory indicates
she provided the Inventory “[p]er your request.” Therefore, Defendant
was required to furnish the Inventory and it is considered part of the
Proof of Loss.
Defendant responds to Plaintiff’s remaining arguments in support
of its Motion by asserting that genuine issues of material fact exist
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whether Defendant’s conduct was wilful and done with the intent to
deceive. Defendant argues a reasonable jury could determine Defendant
made an honest effort in presenting her claim.
Under Illinois law, a misrepresentation in a proof of loss can render
the policy void under a policy’s concealment or fraud provision. Lykos
v. American Home Ins. Co., 609 F.2d 314, 316 (7th Cir. 1979) (affirming
district court’s granting of “judgment non obstante veredicto” after jury
returned verdict for the insured). “[T]o void an insurance policy, a
misrepresentation or concealment of material facts by the insured must
be willful and with the intent to deceive and defraud the insurer.”
Bloomgren v. Fire Ins. Exchange, 162 Ill. App. 3d 594, 600 (1987), citing
Weininger v. Metropolitan Fire Ins. Co., 359 Ill. 584, 598 (1935).
“Ordinarily, fraud and false swearing is a question of fact for the
jury but it becomes a question of law when the insured’s
misrepresentations cannot in any way be seen as innocent.” Folk v.
National Ben Franklin Ins. Co., 45 Ill. App. 3d 595, 597 (1976) (wherein
the insured sold equipment after the fire but included the equipment on
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his proof of loss); see also Passero v. Allstate Ins. Co., 196 Ill. App. 3d
602, 610 (1990); Lykos, 609 F.2d at 315. “If some effort is displayed at
making an honest valuation of a loss, the court should not find fraud or
misrepresentation as a matter of law but should submit the question to
the jury.” Fitzgerald v. MFA Mutual Ins. Co., 134 Ill. App. 3d 1007,
1010 (1985).
In this case, questions of fact remain. Taking the facts in the light
most favorable to Defendant, a reasonable jury could find that Defendant
did not intentionally conceal or misrepresent a material fact in the
Inventory and Proof of Loss.
Five years had passed between Defendant’s bankruptcy petition
and the fire. Defendant testified she was a big spender. Plaintiff testified
that for the “age” of each item on the Inventory Form, she put the date
she acquired the item. According to the Inventory Form, all the items,
with the exception of approximately 20, were acquired within the past
five years.
Defendant further testified she received a large number of items as
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a gift or purchased them used from other individuals or at auction.
Defendant listed the replacement value of the items because that is what
she was told to do. In addition, the Policy provides that Plaintiff would
pay the replacement cost at the time of loss, if that amount is smaller
than the cost to repair, the special limits on certain property, or the limit
of coverage. The language in the Policy does not specifically indicate that
the replacement cost would be for a like item. See, e.g., Santizo v.
Allstate Property & Casualty Ins. Co., 2010 WL 2735649, *3 (E. D. Mo.
2010) (summary judgment granted in favor of the insurance company
where the insured testified she purchased the items for amounts vastly
lower than the values listed in the inventory report and the policy
provided that the replacement payment would be based on the amount
necessary to replace the property with similar property of like kind and
quality).
Defendant also testified she asked Plaintiff for help in preparing the
Inventory. The evidence, taken in the light most favorable to Defendant,
suggests she made some effort at making an honest valuation of a loss.
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See Fitzgerald, 134 Ill. App. 3d at 1010 (reversing judgment on directed
verdict in favor of insurance company; in light of insured’s testimony that
he did not understand the proof of loss forms, asked for help, and
received none, the court should have let the jury decide whether the
insureds knowingly made false representations in an attempt to defraud).
Defendant has also proposed other explanations for the alleged
discrepancies. Defendant notes that the Inventory listed all of the
personal belongings of her six children-- who lived in the home, but that
the bankruptcy filing did not. She also testified at her deposition that
her Affidavit of Income, Expenses, Assets, and Debts filed in her divorce
proceedings should have contained household items but that her attorney
told her to stop filling out the document. All these facts raise a genuine
issue of material fact whether Defendant intentionally concealed or
misrepresented a material fact in the Inventory and Proof of Loss. See,
e.g., Trzcinski v. American Casualty Co., 953 F.2d 307, 314 (1992)
(finding the evidence viewed in the light most favorable to the insured
did not warrant removing the question of fraud and false swearing from
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the jury given the insured’s testimony and explanations).
Each of the cases cited by Plaintiff in support of its claim that
Defendant misrepresented material information in her Proof of Loss as a
matter of law are distinguishable. Several of the cases involved a
discrepancy between a bankruptcy filing and an insurance inventory or
proof of loss but the time between the two was much shorter than exists
here. In addition, in many of those cases, the courts noted that the
insured did not provide an explanation for the discrepancy. See Liberty
Mutual Fire Ins. Co. v. Scott, 486 F.3d 418, 422-23 (8th Cir. 2007)
(affirming judgment as a matter of law entered after the close of evidence;
bankruptcy filing was made one year prior to insurance claim and the
insured failed to present evidence of mistake or inadvertence); Williams
v. Farmers Ins. Co., Inc., 2011 WL 96672 (W. D. Ark. 2011) (granting
insurance company’s motion for summary judgment where only two
years had passed between bankruptcy filing and insurance claim and the
insured provided no explanation for the discrepancy; the insured also
admitted she had no property worth over $14,000, which was contrary to
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her submission to the insurance company); Santizo, 2010 WL 2735649,
at *3 (granting summary judgment in favor of insurance company on the
insured’s vexatious refusal to pay claim; court found the discrepancy
between the proof of loss and bankruptcy valuation 1 ½ years earlier was
too great for a jury to find anything but a misrepresentation in the proof
of loss absent evidence of a mistake on either filing or a great number of
purchases following the bankruptcy); Mathes v. Mid-Century Ins. Co.,
2008 WL 2439744, *2 (E. D. Mo. 2008) (granting summary judgment
in favor of insurance company; the insured’s representations in
bankruptcy filings six months before the fire varied greatly from his
insurance claim and the insured presented no evidence to suggest there
was a mistake in his bankruptcy filings, or that he accumulated
additional personal property after his bankruptcy filing, or that there was
a mistake in his proof of loss).
The remaining cases cited by Plaintiff are also distinguishable. In
Passero, 196 Ill. App. 3d at 610, the insureds did not deny that they
falsified a receipt to show that the insureds purchased video equipment.
Page 25 of 27
No such evidence exists here.
In State Farm General Ins. Co. v. Best in the West Foods, Inc., 282
Ill. App. 3d 470, 479 (1996), the appellate court affirmed the district
court’s grant of judgment in favor of the insurance company after the
close of the insured’s case. The insureds’ 1987 tax return and February
1988 financial statement contained lower inventory values than that
submitted after a July 1988 explosion. Best in the West, 282 Ill. App. 3d
at 479. Again, the time period between the two different values in State
Farm – between one year and 5 months– is much shorter than the five
year period between Defendant’s bankruptcy filing and the fire.
Finally, this case is distinguishable from Tenore v. American and
Foreign Ins. Co. of N.Y., 256 F.2d 791 (1958), cited by Plaintiff in its
Reply. In Tenore, following a trial, judgment was entered in favor of the
insured and the Seventh Circuit reversed. The Seventh Circuit had
before it evidence that 71 of the guns were valued as new despite being
manufactured 50 years earlier, and having cracked stocks, no stocks, and
missing parts. Tenore, 256 F.2d at 794. The Seventh Circuit found the
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testimony of the individual who valuated the properly was “obviously
false” and the district court had found the same testimony “fantastic.”
256 F.2d at 793. Here, given the explanations by Defendant, the Court
cannot at this point find that the listings on the Inventory and valuation
of the property was “obviously false.”
V. CONCLUSION
For the reasons stated, Plaintiff’s Motion for Summary Judgment
(d/e 23) is DENIED.
ENTERED: July 20, 2011
FOR THE COURT:
s/Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATE DISTRICT JUDGE
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