Roach v. Allstate Indemnity Company
Filing
54
ORDER & REASONS granting dft's 34 Motion for Summary Judgment. Signed by Judge Sarah S. Vance on 9/20/2011. (RLL)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
JOHN ROACH, JR ET AL.
CIVIL ACTION
VERSUS
NO: 09-1110
ALLSTATE INDEMNITY CO.
SECTION: R(2)
ORDER AND REASONS
In this insurance coverage dispute, Allstate Indemnity
Company moves for summary judgment.
Because plaintiffs made
material misrepresentations in their property loss claim, the
Court GRANTS defendant’s motion for summary judgment.
I.
BACKGROUND
This case concerns an insurance dispute between plaintiffs,
John Roach Sr. and John Roach Jr., and defendant Allstate
Indemnity Company (“Allstate”) over damage caused by a fire to a
residence located at 10523 Walker Road in St. Francisville,
Louisiana.1
Allstate issued a policy insuring the reworked
mobile home against fire and other perils.
The policy
application lists the applicant’s name and the occupant of the
1
Earline Webb, John Roach Jr.’s mother, owns the 1.79
acre tract of land at 10523 Walker Road. The house damaged in
the fire is located at the rear of property. Earline Webb, her
husband James Webb, and her granddaughter live in a separate
residence at the front of the property.
property as “John Roach.”2
The application states that “John
Roach” was born on July 17, 1948 and is both divorced and
retired.
The policy indicates that the household has only one
resident, that the applicant lives in the building as the owner,
and that State Farm Fire and Casualty previously insured the
property.
The policy insured the contents of the residence up to
$148,941.
Plaintiffs assert that John Roach, Sr. bought the insurance
policy on behalf of his son, John Roach, Jr., who owned the
residence but who was in prison at the time.
They also assert
the insurance agent who sold the policy was aware of these facts.
They contend that Allstate sent premium notices to John Roach,
Sr. at his home address, which was different from the address of
the insured property.
On August 22, 2009 a fire destroyed the dwelling listed on
the insurance policy.
Following the fire, John Roach, Jr.
submitted a list of lost personal property to Allstate in the
amount of $146,341.89.3
Defendant had a fire examiner examine
the fire scene to verify the claim for personal property losses.
His investigation failed to turn up the metallic remains of
2
R. Doc. 34-3.
3
John Roach, Jr. sent Earline Webb a handwritten list of
She completed the list, and he verified its accuracy.
his items.
2
$19,174.98 in personal property that Roach claimed was lost in
the fire.
Defendant now moves for summary judgment, asserting that on
the basis of undisputed facts Allstate is entitled to judgment as
a matter of law on the grounds of three coverage defenses: (1)
that plaintiffs made misrepresentations as to property damaged in
the fire which voided the insurance contract; (2) that John
Roach, Sr. does not have an insurable interest in the property;
and (3) that John Roach, Jr. is not an insured person under the
policy.
Because the Court finds that Allstate is entitled to
summary judgment on its defense of material misrepresentation,
the Court need not reach Allstate’s other two defenses.
II.
STANDARD
Summary judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(c)(2); see also Celotex Corp. v. Catrett, 477
U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1994).
When assessing whether a dispute as
to any material fact exists, the Court considers “all of the
evidence in the record but refrains from making credibility
determinations or weighing the evidence.”
3
Delta & Pine Land Co.
v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir.
2008).
All reasonable inferences are drawn in favor of the
nonmoving party, but “unsupported allegations or affidavits
setting forth ‘ultimate or conclusory facts and conclusions of
law’ are insufficient to either support or defeat a motion for
summary judgment.”
Galindo v. Precision Am. Corp., 754 F.2d
1212, 1216 (5th Cir. 1985); Little, 37 F.3d at 1075.
If the dispositive issue is one on which the moving party
will bear the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a directed
verdict if the evidence went uncontroverted at trial.’”
Int’l
Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263-64 (5th
Cir. 1991).
The nonmoving party can then defeat the motion by
either countering with sufficient evidence of its own, or
“showing that the moving party’s evidence is so sheer that it may
not persuade the reasonable fact-finder to return a verdict in
favor of the moving party.”
Id. at 1265.
If the dispositive issue is one on which the nonmoving party
will bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence in
the record is insufficient with respect to an essential element
of the nonmoving party's claim.
See Celotex, 477 U.S. at 325.
The burden then shifts to the nonmoving party, who must, by
submitting or referring to evidence, set out specific facts
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showing that a genuine issue exists.
See id. at 324.
The
nonmovant may not rest upon the pleadings, but must identify
specific facts that establish a genuine issue for trial.
See,
e.g., id. at 325; Little, 37 F.3d at 1075; Isquith ex rel.
Isquith v. Middle South Utils., Inc., 847 F.2d 186, 198 (5th Cir.
1988), cert. denied, 488 U.S. 926 (1988).
III. DISCUSSION
Because this case was removed on the basis of diversity
jurisdiction, the relevant policy covers Louisiana insureds and
provides that Louisiana law shall govern any and all claims or
disputes in any way related to the policy, the question of
whether Allstate may avoid the Roach’s insurance coverage must be
decided by Louisiana law.
See In re Katrina Canal Breaches, 495
F.3d 191, 206 (5th Cir. 2007)(“[In] Louisiana actions involving
the interpretation of insurance policies issued in Louisiana for
property located in Louisiana, Louisiana's substantive law
controls.”).
A. Material Misrepresentation
Under the Allstate policy, the “entire policy shall be void”
if the insured “willfully conceal[s] or misrepresent[s] any
material fact” before or after the loss.4
Louisiana law provides
that an insurer may avoid coverage on grounds of material
4
See R. Doc. 34-12 at 28; see also R. Doc. 34-12 at 28.
5
misrepresentation only if: “(1) the statements made by the
insured were false; (2) the misrepresentations were made with the
actual intent to deceive; and (3) the misstatements materially
affected the risk assumed by the insurer.”
Cousin v. Page, 372
So.2d 1231, 1233 (La. 1979); see also Dean v. State Farm Mut.
Auto Ins. Co., 975 So.2d 126, 131 (La. Ct. App. 2008)(holding
that the same test is applicable to both misrepresentations made
in the negotiation of an insurance contract and those that occur
after the issuance of a policy or occurring after a loss).
The
insurer claiming the defense of material misrepresentation bears
the burden of proving that there was a misrepresentation and that
it was made with the intent to defraud.
1231.
Cousin, 372 So.2d at
“Fraud will never be presumed from acts which may be
accounted for on the basis of honesty and good faith.”
Williams
v. United Fire & Cas. Co., 594 So.2d 455 (La. Ct. App. 1991).
When the misrepresentation concerns the value of an insured’s
loss, “‘materiality’ simply embodies the understanding that the
misrepresentation concerns a fact that significantly affects the
rights and obligations of the insurer.”
Bennett v. Allstate Ins.
Co., 950 F.2d 1102, 1106 (5th Cir. 1992)(citing Mamco, Inc. v.
Am. Emp’rs Ins. Co., 736 F.2d 187, 190 n.6 (5th Cir. 1984)).
Intent may “be inferred from circumstances that create a
reasonable assumption that the [insured] was aware of the falsity
of his representations.”
Mamco, Inc. v. Am. Emp’rs Ins. Co., 736
6
F.2d 187, 190 (5th Cir. 1984).
“Overvalution of items and
absence of claimed items from the property at the time of the
fire are criteria for material misrepresentation, as well as
circumstantial evidence of intent.”
Dominio v. Allstate Ins.
Co., 2010 WL 4668332, at *4 (E.D. La. Nov. 9, 2010) (finding the
insured’s misrepresentations of the value and ownership of
furniture and clothing material and intentional)(citing Bennett,
736 F.2d at 1106).
Defendant argues that plaintiffs made multiple material
misrepresentations in their contents claim with the intent to
defraud Allstate.
Specifically, Allstate contends that John
Roach, Jr. inflated and falsified his claim by deliberately
including items that he did not own and that were not destroyed
in the fire.
Based on the undisputed evidence the Court finds
Allstate’s motion to be meritorious.
Allstate presents evidence that the fire scene examiner was
unable to find the metallic remains of many claimed items,
including twelve major items with a total value of $19,174.98.5
Further, deposition testimony corroborates the examiner’s
5
The fire scene examiner did not find the following
items: (1) Craftsman riding lawnmower ($3,299); (2) Dell Computer
($1,949); (3) Dell Color Laser Printer ($349); (4) HP Laptop
Computer ($1,049); (5) Samsung 50 inch television ($1,200); (6)
LG 55 inch TV ($1,999); (7) Sony 52 inch LCD television
($3,099.99); (8) Panasonic 42 inch television ($875); (9)
Craftsman Tool Set ($975); (10) Whirlpool Clothes Dryer ($450);
(11) Thomasville Sofa ($3,500); (12) La-Z-Boy Recliner ($429.99).
7
findings.
One of the items plaintiffs claimed was destroyed that
the examiner did not find was a Craftsman riding lawnmower with
an alleged original cost of $3,299.
Mr. Webb, John Roach, Jr.’s
stepfather, testified that he owned a Craftsman riding lawn
mower, that he usually cut John Roach, Jr.’s lawn, that he keeps
his lawnmower in the shed at the front of the property, and that
it was not affected by the fire.6
In addition, John Roach, Jr.
listed five televisions on his claim, but the fire examiner found
only two televisions.
Chivonia Nevils, John Roach Jr.’s
girlfriend, testified that there were only three televisions when
she lived in the home in 2007 and 2008.7
Furthermore, plaintiffs
submit no evidence to refute the examiner’s findings.
Therefore,
the uncontradicted evidence indicates that plaintiffs falsified
their claimed losses.8
Moreover, the misrepresentations are material.
The total
value of twelve of the major items that the fire scene examiner
could not find is $19,174.98.
6
R. Doc. 34-10 at 5.
7
Because plaintiffs’ false
R. Doc. 34-9 at 3.
8
Allstate submits evidence that plaintiffs claimed a
number of items purchased from Olinde’s furniture store. The
evidence shows that John Roach, Sr. purchased this furniture for
his own use and kept it on his property. Plaintiffs do not
respond directly to defendant’s evidence, but aver generally that
the furniture shown in photographs sent to Allstate was in the
residence at the time of the fire. The Court does not rely on
Allstate’s evidence as to this furniture in granting summary
judgment.
8
statements would result in Allstate’s paying more than was owed
under the policy, the Court finds that the misrepresentations are
material.
See, e.g., Bennett, 950 F.2d at 1106 (finding material
misrepresentation where several items on the insured’s sworn
contents list had been removed from the home prior to the fire
and were older than the insured claimed); Williams v. United Fire
& Cas. Co., 594 So.2d 455, 464 (La. Ct. App. 1991)(upholding a
verdict of material misrepresentation when insured failed to
disclose he had removed some items from home before the fire).
Finally, it is reasonable to find, based on the
circumstances, that the insured was aware of the falsity of his
representations.
Mamco, 736 F.2d at 190 (5th Cir. 1984).
The
items that were not found by the fire scene examiner included
such things as a lawnmower, large televisions, a dryer, a
recliner and a sofa.
John Roach, Jr. does not even try to
explain how so many large and expensive items were claimed as
losses when their remains were not found on the property.
Accordingly, the Court finds that Allstate has met its burden of
proving that the plaintiffs made material misrepresentations in
their personal property claim and is entitled to summary
judgment.
9
IV.
CONCLUSION
For the foregoing reasons, defendant’s motion for summary
judgment is GRANTED.
New Orleans, Louisiana, this 20th day of September, 2011.
___
_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE
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