Kerr v. State Farm Fire and Casualty Company
Filing
27
RULING granting 13 Motion for Summary Judgment. The plaintiff's claims shall be dismissed with prejudice. Judgment shall be entered accordingly. Signed by Judge Frank J. Polozola on 3/7/2012. (LSM)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
JOHN KERR
CIVIL ACTION
VERSUS
NUMBER 11-113-FJP-CN
STATE FARM FIRE & CASUALTY
COMPANY
RULING
State
defendant,
Farm
Fire
&
Casualty
has
filed
a
Motion
Company
for
(“State
Summary
Farm”),
Judgment.1
the
The
plaintiff, John Kerr (“Plaintiff or Kerr”), has filed an opposition
to this motion.2
The Court held oral argument on the pending
motion for summary judgment on November 2, 2011.
Following the
oral argument, the Court ordered that supplemental briefs be filed
by the parties.3
After reviewing the entire record and considering
the oral argument of the parties and for the reasons which follow,
defendant’s motion for summary judgment is granted and plaintiff’s
claims are dismissed with prejudice.
I.
Factual Background
Kerr filed a claim against State Farm based on the alleged
1
Rec. Doc. No. 13.
2
Rec. Doc. No. 14.
3
Rec. Doc. Nos. 23 & 26.
Doc#47636
1
disappearance of a boat, motor, trailer, and contents from his
home.
Plaintiff contends that on or about October 4, 2010, these
items disappeared from next to his mobile home in Livingston
Parish.
The boat and other items have never been found.
After Kerr filed a claim with State Farm, State Farm began to
investigate the claim and requested to take an examination under
oath (“EUO”) in accordance with the terms of the policy.
The EUO
was scheduled as permitted under the policy, but before it took
place, Kerr advised State Farm that he was contacting an attorney
and the EUO would be cancelled.
Reasonable efforts were made by
State Farm to reschedule the EUO, but plaintiff never agreed to or
appeared for the EUO nor did the plaintiff produce the documents
requested by State Farm.
Rather than complying with the terms of
the policy, Kerr filed this lawsuit.
In response to plaintiff’s
suit, State Farm claims that Kerr has breached the terms of the
insurance contract and his suit should be dismissed with prejudice.
State Farm contends it is entitled to summary judgment as a
matter of law under the facts of this case based on Kerr’s failure
to comply with the policy because plaintiff failed to submit to an
EUO and produce documents which were requested by State Farm in
accordance with the terms of the insurance contract between the
parties.
State Farm also argues that under Louisiana law, an
insured’s failure to cooperate with the insurer as required by the
terms of the policy has been held to be a material breach of the
Doc#47636
2
insurance contract and an affirmative and valid defense to a suit
filed pursuant to the policy.
In other words, State Farm claims
that Kerr’s failure to give the EUO and produce the documents, when
requested, is a bar to plaintiff’s claim.
In response to State Farm’s motion for summary judgment, Kerr
contends that after reporting his loss to State Farm, he promptly
filled out the loss documentation given to him by State Farm, had
the
documents
notarized,
and
returned
them
to
State
Farm.
Plaintiff argues he did not refuse to answer any questions asked of
him by any of the State Farm employees with whom he was in contact
during the investigation. Kerr acknowledges he received the demand
for an EUO a few weeks after having received a letter from State
Farm indicating that the insurer may not have a duty to pay under
the policy if State Farm’s investigation led to the discovery of
concealment or fraud on the part of the policy holder.
After
receiving this communication, Kerr contends he believed State Farm
was accusing him of fraud before formally requesting an EUO.
When
Kerr attempted to discuss this matter with State Farm agents, he
claims he was dissatisfied with their answers and how his claim was
being handled.
Plaintiff also contends he was concerned about a
potential conflict of interest as Kerr’s best friend had previously
dated one of the State Farm investigators on his claim.
Having
already believed he had been accused of fraud by State Farm, Kerr
did not submit to an EUO or produce the documents but retained
Doc#47636
3
counsel and filed this lawsuit.
II.
Law and Analysis
A.
Summary Judgment Standard
Summary judgment should be granted if the record, taken as a
whole, "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."4
The Supreme Court has
interpreted the plain language of Rule 56(c) to mandate "the entry
of summary judgment, after adequate time for discovery and upon
motion, against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party's
case, and on which that party will bear the burden of proof at
trial."5
A party moving for summary judgment "must 'demonstrate
the absence of a genuine issue of material fact,' but need not
negate the elements of the nonmovant's case."6
If the moving party
"fails to meet this initial burden, the motion must be denied,
4
Fed. R. Civ. P. 56(c); New York Life Ins. Co. v. Travelers
Ins. Co., 92 F.3d 336, 338 (5th Cir. 1996); Rogers v. Int'l Marine
Terminals, Inc., 87 F.3d 755, 758 (5th Cir. 1996).
5
Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548,
2552, 91 L.Ed.2d 265 (1986). See also Gunaca v. Texas, 65 F.3d
467, 469 (5th Cir. 1995).
6
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.
1994) (en banc) (quoting Celotex, 477 U.S. at 323-25, 106 S.Ct. at
2552).
Doc#47636
4
regardless of the nonmovant's response."7
If the moving party meets this burden, Rule 56(c) requires the
nonmovant to go beyond the pleadings and show by affidavits,
depositions, answers to interrogatories, admissions on file, or
other admissible evidence that specific facts exist over which
there is a genuine issue for trial.8
not
be
satisfied
by
conclusory
The nonmovant's burden may
allegations,
unsubstantiated
assertions, metaphysical doubt as to the facts, or a scintilla of
evidence.9
Factual controversies are to be resolved in favor of
the nonmovant, "but only when there is an actual controversy, that
is, when both parties have submitted evidence of contradictory
facts."10
The Court will not, "in the absence of any proof, assume
that the nonmoving party could or would prove the necessary
facts."11
Unless there is sufficient evidence for a jury to return
a verdict in the nonmovant's favor, there is no genuine issue for
7
Id. at 1075.
8
Wallace v. Texas Tech Univ., 80 F.3d 1042, 1046-47 (5th Cir.
1996).
9
Little, 37 F.3d at 1075;
Wallace, 80 F.3d at 1047.
10
Wallace, 80 F.3d at 1048 (quoting Little, 37 F.3d at 1075).
See also S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 494
(5th Cir. 1996).
11
McCallum Highlands v. Washington Capital Dus, Inc., 66 F.3d
89, 92 (5th Cir. 1995), as revised on denial of rehearing, 70 F.3d
26 (5th Cir. 1995).
Doc#47636
5
trial.12
In order to determine whether or not summary judgment should
be granted, an examination of the substantive law is essential.
Substantive law will identify which facts are material in that
“[o]nly disputes over facts that might affect the outcome of the
suit under the governing law will properly preclude the entry of
summary judgment.”13
B.
The Relevant Policy Provisions14
The Court must look at the specific language of Kerr’s
insurance policy with State Farm to make proper determinations of
the issues in this case.
The relevant policy provisions state as
follows:
CONDITIONS
***
2. Your Duties After Loss.
After a loss to which the
insurance may apply, you shall see that the following duties
are performed:
***
d.
as often as we reasonably require:
1)
exhibit the damaged property;
12
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-51, 106
S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).
13
Id. at 248, 106 S.Ct. at 2510.
14
Rec. Doc. No. 13-1.
Doc#47636
6
2)
provide
us
with
records
and
documents
we
request and permit us to make copies; and
3)
submit to examinations under oath, while not
in the presence of any other insured, and sign
the same;
(Page 4 of Policy)
***
6.
Suit Against Us. No action shall be brought unless there
has been compliance with the policy provisions.
The
action must be started within one year after the date of
loss of damages.
(Page 5 of Policy)
C.
Analysis
Louisiana
law
instructs
that
“failure
to
fulfill
policy
requirements that are conditions precedent to an insurance contract
precludes suit under the policy...”15
As the district court for
the Eastern District of Louisiana recently stated:
“[T]he failure of an insured to cooperate with the
insurer has been held to be a material breach of the
contract and a defense to suit on the policy.”16 Such
failure may be the result of the misplaced arrogance of
15
Mosadegh v. State Farm Fire and Casualty Co., 330 Fed. Appx.
65, 66, (5th Cir. 2009)(citing Lee v. United Fire & Casualty Co.,
607 So.2d 685, 688 (La. App. 4 Cir. 1992); Robbert v. Equitable
Life Assur. Soc., 217 La. 325, 343, 46 So.2d 286 (La. 1950)).
16
Spindel v. Bankers Specialty Insurance Company, 2010 WL
5439706, at *2 (E.D. La. Dec. 28, 2010),quoting Lee, 607 So.2d at
688.
Doc#47636
7
counsel, or the recalcitrance of the litigant. It may be
“manifested by a refusal to produce documents.”17
As
noted by one court, “[a]n outright refusal to submit to
an examination is the easy case.”18 Note, however, that
“[w]hen an insurer denies liability for a claim, it
abandons its right to compel the claimant to comply with
the preliminary provisions of the policy.”19
An insurer “must also show that it has been prejudiced by the
failure of the plaintiffs to submit to examination under oath.”20
An insurer can meets it burden of establishing actual prejudice by
establishing “that it is unable to obtain information while it is
still fresh [and that] it cannot inspect the subject property in a
timely fashion after receiving information from an examination
under oath.”21
Of importance, Louisiana courts have also observed that:
[A] cooperation clause is emphatically not an escape
hatch that an insurer may use to flee from liability. It
is most certainly not the law of Louisiana that any
failure to comply with the policy conditions, no matter
how trivial, will relieve an insurer from liability under
the policy it drafted and issued.22
17
Id., quoting Lee, 607 So.2d at 688.
18
Id., quoting Lee, 607 So.2d at 688.
19
Id., quoting Mosadegh v. State Farm Fire and Casualty Co.,
2008 WL 4544361, at *3 (E.D. La. Oct. 8, 2008), aff’d, 330 Fed.
Appx 65 (5th Cir. 2009)(quoting Patterson v. Liberty Lloyds Ins.
Co., 96-2168 (La. App. 4 Cir. 3/26/97), 692 So.2d 17, 19.
20
Id. at *4.
21
Id.
22
Jackson v. State Farm Fire & Cas. Co., No. 06-7202, 2010 WL
724108, at *8 (E.D. La. Feb. 22, 2010).
Doc#47636
8
In fact, dismissal of a suit before trial because of the breach of
a cooperation clause has been held to be “a draconian remedy which
[courts] do not ordinarily favor.”23
An insurer may be relieved of
liability only if the breach of the cooperation clause is material
and prejudicial.24
The burden of proving “actual prejudice” falls
on the insurer.25
The Court now turns to the contentions of the
parties and the application of relevant case law to the facts of
this case.
Plaintiff argues that State Farm’s Reservation of Rights
letter
mailed
to
him
prior
to
the
request
for
an
EUO
was
essentially an accusation of fraud by State Farm. Plaintiff stated
that he “felt” accused of fraud after receiving this communication.
This perceived accusation is apparently what prompted plaintiff to
hire an attorney and file suit rather than agree to submit to an
EUO.
State Farm counters that the “Reservation of Rights” letter is
normal and customary and was not a denial of plaintiff’s claim.
The
letter
simply
put
plaintiff
on
notice
of
State
Farm’s
investigation of the matter and the potential denial of his claim
23
Lee, 607 So.2d at 685.
24
Id., citing Williams v. Lowe, 02-355, (La. App. 5 Cir.
10/16/02) 831 So.2d 334, 336; Desadier v. Safeway Ins. Co., 712
So.2d 925, 928 (La. App. 3 Cir. 1998)(emphasis added).
25
Trosclair v. CNA Ins. Co., 637 So.2d 1168, 1170 (La. App. 4
Cir. 1994).
Doc#47636
9
in the case of fraud.
State Farm argues that the letter did not
accuse plaintiff of fraud and was not a denial of his claim.
Plaintiff notified State Farm that he hired an attorney.
State
Farm notes it never objected to plaintiff having an attorney
present for an EUO; however, once Kerr was represented by an
attorney, all efforts to schedule the EUO were avoided despite the
EUO being contractually required.
In his supplemental brief submitted after oral argument on
this motion, plaintiff implies for the first time that the term
“examination under oath” is vague or confusing as it is undefined
in the policy.
Plaintiff contends that the sworn statement of
reasons he initially gave to State Farm constitutes an EUO.
Even
if this is the case, the policy required the plaintiff to submit to
an EUO “as often as reasonably required.” Plaintiff has offered no
evidence to suggest that the request for an EUO by State Farm is or
was unreasonable under the facts and circumstances of this case.
The Court also finds this argument disingenuous because it is clear
to the Court that in plaintiff’s first opposition brief and in the
arguments
made
by
plaintiff’s
counsel
at
oral
argument
the
plaintiff was not confused by the term and fully understood what
was being requested of him by State Farm.
Plaintiff’s counsel
repeatedly stated to the Court that plaintiff “felt” like he had
been accused of fraud.
his
refusing
Doc#47636
the
Plaintiff claims this was the reason for
examination
under
10
oath.
Such
a
belief
or
contention is without merit and in contravention of the clear
language of the policy.
Plaintiff’s intentional refusal and
failure to cooperate in appearing and giving an EUO was a material
breach of the contract of insurance.
Recent jurisprudence from the Fifth Circuit and the district
court
for
the
Eastern
District
instructive in this case.
of
Louisiana
is
especially
In Mosadegh v. State Farm Fire &
Casualty Company, plaintiffs had made claims on their homeowners
and flood insurance policies for damage sustained due to Hurricane
Katrina.26
State Farm had paid some portions of the claim to
plaintiffs pursuant to the homeowners and flood policies.
At some
point, State Farm claimed plaintiffs provided inconsistent and
incomplete information and therefore requested plaintiffs submit to
an EUO.
The EUO was scheduled and plaintiffs were advised their
attorney was welcome to attend the EUO.
State Farm also sent
plaintiffs a standard “Reservation of Rights” letter on both the
homeowners and flood policies, which stated: “State Farm ... may
have no duty to pay, indemnify, defend, or otherwise perform under
the policy referenced above” in the case of fraud.27
Plaintiffs failed to appear for their EUOs without any notice
to State Farm.
State Farm received a letter from plaintiffs’
attorney asserting that since State Farm had denied the Mosadeghs’
26
2008 WL 4544361 (E.D. La. Oct. 8, 2008).
27
Id. at *1 (emphasis in original).
Doc#47636
11
claims, plaintiffs no longer had a duty to cooperate.
Plaintiffs’
counsel advised State Farm that plaintiffs might submit to an EUO
if State Farm produced their complete file and identified any
defenses it intended to use to deny or adjust their claims.28
State Farm responded to these assertions by letter notifying
plaintiffs that the “Reservation of Rights” letters were not
denials of the claims.
The letter further stated that State Farm
was not required under the policy to supply plaintiffs with a
claims file.
State Farm then requested plaintiffs to reschedule
the EUOs before their claims prescribed.
Instead of appearing for
the rescheduled EUOs, plaintiffs’ counsel notified State Farm the
matter was in litigation.29
State Farm moved for summary judgment on the grounds that the
Mosadeghs failed to cooperate with the insurer and thus materially
breached their contract. The court found that plaintiffs failed to
fulfill the requirements of the homeowners policy under which they
sued, stating:
The letters the plaintiffs invoke clearly do not deny any
claims; they merely state that the insurer “may” have no
duty to pay and referring the plaintiffs to language
already contained in their policy. While the language
does refer to denying claims because of fraud, there is
nothing in the letter to suggest that State Farm was
actually denying the claim at that point. Further, State
Farm sent another letter immediately after receiving
notice from the plaintiff’s attorney and made clear that
28
Id.
29
Id., at *2.
Doc#47636
12
State Farm was not denying the Mosadeghs’ claims.30
The court was also not persuaded by plaintiffs’ contentions, which
were similar if not the same as that urged by Kerr in this case,
stating:
The Court notes that “[t]he purpose of the oral
examination of the insured is to protect the insurer
against fraud, by permitting it to probe into the
circumstances of the loss, including an examination of
the insured....”
Mier v. Niagara Fire Ins. Co., 205
F.Supp. 108, 110 (W.D. La. 1962) This is exactly what
State Farm was attempting to do. Plaintiffs’ claim that
they did not want to submit to an examination because the
defendant wanted to probe into possible fraud is a
patently limp basis for their refusal.31
However, the above finding did not end the inquiry for the
Mosadegh court.
The court stated that “[t]he defendant must also
show that it has been prejudiced by the failure of the plaintiffs
to submit to examinations under oath.”32
The court further noted:
“‘The burden is on the insurer to show actual prejudice.’33
defendant has done so on this record.
The
The defendant asserts that
it is unable to obtain information while it is still fresh; it
cannot inspect the subject property in a timely fashion after
30
Id., at *3.
31
Id. (emphasis added).
32
Id., at *4, citing Trosclair, 637 So.2d at 1170.
33
Id., quoting Trosclair, 637 So.2d at 1170.
Doc#47636
13
receiving information from an EUO.”34
The Mosadegh court made reference to Wright v. Allstate
Insurance Co., which held that summary judgment was not appropriate
where a plaintiff had failed to submit to an examination under
oath, but was later, as stated in a sworn affidavit, willing to
submit to a deposition.35
The Mosadegh court distinguished the
Wright case stating that “[t]he court in Wright also found that the
plaintiff had submitted ‘reasonable explanations’ for her failure
to cooperate.”36
The Mosadegh court then specifically found that
the Mosadeghs had not evidenced a willingness to submit to a
deposition but rather insisted on State Farm compelling them to be
deposed. Additionally, the court noted that “the Mosadeghs did not
provide any excuse for their failure to show up for the EUOs; only
after the fact have they asserted that it was because they believed
State Farm had denied their claims.
They made no effort to
reschedule the EUOs after State Farm assured their claims were not
being denied.
They have provided no ‘reasonable explanations’ for
34
Id., citing Holden v. Connex-Metalna Mgmt. Consulting, 2000
WL 1741839, *2 (E.D. La. 11/2/00) (“[C]ooperation clauses fulfill
the reasonable purpose of ‘enabling the insurer to obtain relevant
information concerning the loss while the information is
fresh.’”)(quoting 14 Couch on Insurance § 199:4)).
35
Id. citing Wright,, 2006 WL 3524030, *3 (W.D. La. 12/5/06).
36
Id., quoting Wright, at *3.
Doc#47636
14
their lack of cooperation.”37
The Mosadeghs appealed this ruling to the Fifth Circuit, which
affirmed the district court’s grant of summary judgment.38
On
appeal, the Mosadeghs again argued that State Farm sent them
letters
denying
coverage
justified their absence.
prior
to
the
scheduled
EUOs,
which
The Fifth Circuit affirmed the lower
court’s ruling that the reservation of rights letters were not a
denial of claims but rather a notice of potential denial should
fraud be found, and notice that State Farm was still in the process
of analyzing the claims. The Fifth Circuit held, “[o]n their face,
the
letters
did
not
deny
coverage
and
did
not
justify
the
Mosadegh’s [sic] failure to submit to an examination under oath.”39
The Fifth Circuit continued:
Because Louisiana law teaches that failure to fulfill
policy requirements that are conditions precedent to an
insurance contract precludes suit under the policy, the
Mosadegh’s [sic] failure served as a basis on which to
grant State Farm’s summary judgment motion.40
The Fifth Circuit also addressed the Mosadeghs’ challenge to
the lower court’s finding of prejudice by State Farm.
37
State Farm
Id., at *5.
38
Mosadegh v. State Farm Fire and Casualty Co., 330 Fed. Appx.
65, 2009 WL 1362830 (5th Cir. May 15, 2009).
39
Id.
40
Id., citing Lee v. United Fire & Casualty Co., 607 So.2d 685,
688 (La. App. 4 Cir. 1992); Robbert v. Equitable Life Assur. Soc.,
217 La. 325, 343, 46 So.2d 286 (La. 1950).
Doc#47636
15
suggested it was not even required under Louisiana law to show
prejudice.
law
The court stated: “We do not pause on that Louisiana
question,
because
State
Farm
has
certainly
demonstrated
prejudice to its investigation and adjustment capacity through the
Mosadeghs’ unwillingness to submit to the required examinations, as
the district court held.”41
While this Court is inclined to agree with other Louisiana
district courts that prejudice is required to be shown,42 the Court
will follow the Fifth Circuit’s holding in Mosadegh. In short, the
Court finds it is not necessary for it to find that the insurer
must show prejudice because State Farm has clearly shown it was
prejudiced under the facts and circumstances of this case.
First, the Court finds that State Farm was deprived of its
right under the contract to take an examination under oath and was
41
Id.
42
See e.g., Hamilton v. State Farm Fire & Casualty Company,
2011 WL 5078963, *2 (E.D. La. Oct. 24, 2011)(“... ‘as [t]he burden
is on the insurer to show actual prejudice’”); Dennis v. Allstate
Insurance Company, 2011 WL 870508, *1 (E.D. La. Mar. 10, 2011)(“The
Court explained that under Louisiana law, an insured’s refusal to
submit to an examination under oath precludes recovery only if it
causes prejudice to the insurer.”); Rodriguez v. Southern Fidelity
Insurance Company, 2011 WL 743461, *3 (E.D. La. Feb. 23, 2011)(“An
insurer may be relieved of liability only if the breach of the
cooperation clause is material and prejudicial. The burden of
proving ‘actual prejudice’ falls on the insurer.”); Spindel v.
Bankers Specialty Insurance Company, 2010 WL 5439706, *2 (E.D. La.
Dec. 28, 2010)(“The [insurer] must also show that is has been
prejudiced by the failure of the plaintiffs to submit to an
examination under oath.”).
Doc#47636
16
therefore also deprived of the right to properly and thoroughly
investigate the claim.
Further, the Court agrees with State Farm
that it was prejudiced by the denial of any meaningful opportunity
to settle meritorious claims prior to facing suit and by its
potential exposure to a bad faith action.
State Farm contends by
plaintiff’s refusal to submit to an EUO, it lost the right to
properly investigate and evaluate the claim and potentially settle
the claim prior to suit to avoid the expense, time, and effort of
litigation.
State Farm also argues it has been further prejudiced
by plaintiff’s allegations that State Farm is in bad faith.
The affidavits submitted by State Farm provide support for its
claim of prejudice.
Affiant Kara Carpenter, Claim Team Manager in
the Special Investigative Unit for State Farm, testified regarding
plaintiff’s claim, in pertinent part, as follows:
2)
... This matter was transferred to the Special
Investigative Unit due to certain issues that arose
during the investigation of the claim.43
* * *
4)
In accordance with the terms and conditions of the
contract of insurance under which Mr. Kerr made a
claim against the State Farm Fire and Casualty
Company, a request was made of Kerr to provide
information in the form of documents, as well as
provide an examination under oath.
These steps
were necessary in order to investigate this claim.44
* * *
43
Affidavit of Kara Carpenter, Rec. Doc. No. 13-2, p. 1.
44
Id.
Doc#47636
17
6)
Mr. Kerr did not appear for an examination under
oath and did not produce the documents that State
Farm requested that he provide.45
* * *
8)
The examination under oath and the request to
produce documents were material to our overall
consideration of the claim of Mr. Kerr.
The
failure on the part of Mr. Kerr to comply with the
terms and conditions of the contract of insurance
prejudiced State Farm’s ability to complete the
investigation of the claim. An examination under
oath with the production of documents is an
essential tool in the investigation process.
It
allows
us
to
ask
questions,
and
receive
information, early on in the investigation of the
claim. That is at a time period when information
is fresh in the minds of the insured such as their
whereabouts on certain dates and times, the
condition of the items for which [the insured] is
making a claim, financial status, loan status,
information on telephone usage, information that
can be derived from telephones such as text
messages, possibly emails, and other pertinent
information.46
Affiant Kendra Bradford, another employee of the Special
Investigative Unit of State Farm, testified:
* * *
3)
In connection with the investigation of Mr. Kerr’s
claim, I determined that I needed Mr. Kerr to
provide documents and records and give an
examination under oath as provided in the policy of
insurance.
It was felt that this was necessary
because the claim was such that Mr. Kerr was
claiming the boat, motor, trailer and contents were
stolen next to a mobile home which Mr. Kerr had
just moved out of, there were questions raised as
to whether this was a legitimate theft, as well as
45
Id. at p. 2
46
Id.
Doc#47636
18
whether there were issues of motive and opportunity
to commit fraud.
The boat, motor, trailer and
contents to my knowledge have never been recovered.
Ascertaining the facts and events around the date
of
loss,
information
regarding
the
boat/motor/trailer/equipment, information regarding
financial status, information regarding those who
may have been in contact with Kerr, and what
information those persons may know, and other
information was particularly critical to the
investigation. It is not to suggest that these are
all the reasons why the examination under oath and
production of documents was necessary, however it
was certainly felt that it was necessary in order
to advance the investigation and address this while
it was fresh in the minds of Mr. Kerr.
This is
also critical to contact other people who may have
been in contact with Kerr and could express
information about the claim, while information is
fresh in their minds. We have also learned that
electronic information can at times be obtained,
and indeed it at times can be preserved, however to
do so, it must be done early on.47
* * *
6)
...The examination did not go forward because Mr.
Kerr advised that he wanted to retain counsel.48
7)
...Mr. Kerr never gave his examination under oath,
and never produced the documents that he was asked
to bring for his examination under oath.49
8)
The information requested of Mr. Kerr as well as
the examination under oath were essential to the
investigation of the claim.
Mr. Kerr failed to
provide the information requested and failed to
give an examination under oath.50
47
Affidavit of Kendra Bradford, Rec. Doc. No. 13-3, pp.1-2.
48
Id. at p. 2.
49
Id.
50
Id.
Doc#47636
19
9)
For the reasons set forth above, the investigation
efforts were material to my overall investigation
of the claim and the failure on the part of Mr.
Kerr to comply with the terms and conditions of the
contract of insurance prejudiced my ability to
complete the investigation of the claim.
In a
claim of this nature, timing is important. It is
critical to be able to learn information and obtain
information at such time as the information is
readily available, can be secured, information can
be obtained from persons when details about time,
place, and others present is fresh in that person’s
mind. Being able to take an examination under oath
early on leads to the ability to contact other
individuals to see if stories are similar about
events and this is typically only successful if it
can be done early on.
I have also learned that
information such as text messaging which may be
relevant is over ridden in electronic devices with
time. The ability to investigate and investigate
early is critical. Thus the inability to perfect
and complete this investigation substantially
prejudiced our investigation.51
The affidavits of the State Farm employees who were attempting
to investigate plaintiff’s claim clearly establish that State Farm
was prejudiced by plaintiff’s failure to submit to an examination
under oath as required by the policy.
Plaintiff has failed to
present any summary judgment evidence which would controvert State
Farm’s proof of prejudice or even create a material issue of fact
which would require the Court to deny State Farm’s motion for
summary judgment. Therefore, the Court finds that summary judgment
shall be granted under the law and facts of this case in favor of
State Farm dismissing plaintiff’s claims with prejudice.
51
Id. at pp. 2-3.
Doc#47636
20
III. Conclusion52
For the reasons set forth above, the Court finds that the
plaintiff materially breached the contract of insurance by failing
to cooperate in submitting to an examination under oath as required
by the contract.
The Court further finds that assuming without
specifically finding that State Farm must show it was prejudiced,
State Farm has shown it suffered significant prejudice to its
investigation as a result of plaintiff’s breach.
Thus, summary
judgment shall be granted in favor of State Farm as a matter of law
under the facts of this case.
Therefore:
IT IS ORDERED that State Farm’s motion for summary judgment
shall be granted and plaintiff’s claims shall be dismissed with
prejudice.
Judgment shall be entered accordingly.
Baton Rouge, Louisiana, March 7, 2012.
S
FRANK J. POLOZOLA
MIDDLE DISTRICT OF LOUISIANA
52
The Court has considered all of the contentions of the
parties whether or not specifically addressed herein.
Doc#47636
21
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?