Sentry Insurance v. Whitaker et al

Filing 39

MEMORANDUM AND ORDER re: 24 ORDERED that Plaintiffs' Motion for Summary Judgment, [Doc. No. 24], is DENIED. Signed by District Judge Henry E. Autrey on 8/28/13. (CEL)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
SENTRY INSURANCE,

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) Cause Number. 4:12CV241 HEA
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Plaintiff,
v.
TAMMY WHITAKER,
Defendant.

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff’s Motion for Summary
Judgment, [Doc. No. 24]. Defendant opposes the Motion. For the reasons set
forth below, Plaintiff’s Motion is denied.
Facts and Background
Plaintiff brought this declaratory judgment action seeking a declaration
from the Court that it is not obligated to pay Defendant’s insurance claim under a
policy of insurance issued by Plaintiff to Defendant. Plaintiff claims Defendant
made material misrepresentations that rendered the policy void. Additionally,
Plaintiff seeks a determination that Defendant’s counterclaim for vexatious refusal
to pay under the policy is without merit. Plaintiff further seeks return of the
amount it has paid on Defendant’s insurance claim.
Discussion

The Policy contains certain provisions which require certain actions from
Defendant. Policy holders are required to notify Plaintiff as soon after the loss as
possible. Further, policyholders are required to cooperate with investigation of the
loss, protect the home and personal possessions from further damage or loss,
provide documentation that will assist in verifying Plaintiff’s liability for a loss,
make a list of damaged or destroyed personal possessions, showing in detail the
quantity, description and amount of loss for each item.
The policy also requires a sworn proof of loss within 60 days of the date of
the loss, and requires the insured to submit individually to examination under oath
as often as Plaintiff reasonably requires. The policy contains the exclusion that
Plaintiff has no duty to provide coverage if the insured fails to comply with the
insured’s responsibilities.
The policy also contains the exclusion:
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
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Intentionally caused a loss; or
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Made false statements; relating to this insurance.
Plaintiff investigated Defendant’s fire claim and determined that Defendant
failed to co-operate and failed to comply with her responsibilities. Plaintiff also
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concluded from its investigation that Defendant had intentionally concealed and/or
misrepresented material facts or circumstances, engaged in fraudulent conduct,
dishonest or criminal conduct ro made false statements surrounding the fire loss,
the claim presented and the insurance including the extent of the damage and the
amount of personal property loss.
Plaintiff moves for summary judgment on the grounds that the evidence
establishes its position and that no reasonable jury could conclude that Defendant
has not acted as detailed in Plaintiff’s Complaint. Defendant argues that the issues
before the Court are factual, and therefore, not determinable through summary
judgement, rather, must be determined by the trier of fact.
Standard of Review
The standard for summary judgment is well settled. In determining whether
summary judgment should issue, the Court must view the facts and the inferences
in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co.,
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Woods v. DaimlerChrysler
Corp., 409 F.3d 918, 921 (8th Cir. 2005); Littrell v. City of Kansas City, Mo., 459
F.3d 918, 921 (8th Cir. 2006). The moving party has the burden to establish both
the absence of a genuine issue of material fact and show that it is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc.,
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477 U.S. 242, 247 (1986); Celotex Corp v. Catrett, 477 U.S. 317, 322 (1986);
Enterprise Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). Once the
moving party has met this burden, the nonmoving party may not rest on the
allegations in his pleadings but by affidavit or other evidence must adduce specific
facts showing that a genuine issue of material fact exists. Fed.R.Civ.P. 56(e);
Anderson 477 U.S. at 256, Littrell, 459 F.3d at 921.
The nonmoving party must articulate and substantiate specific facts showing
a genuine issue of material fact. “The party opposing summary judgment may not
rest on the allegations in its pleadings; it must ‘set forth specific facts showing that
there is a genuine issue for trial.’” United Life of Omaha Life Ins. Co. v. Honea,
458 F.3d 788, 791 (8th Cir. 2006) (quoting Fed.R.Civ.P. 56(e)); “Only disputes
over facts that might affect the outcome of the suit under the governing law will
properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby,
Inc. 477 U.S. 242, 248 (1986); Hitt v. Harsco Corp., 356 F.3d 920, 923 (8th Cir.
2004). An issue of fact is genuine when “a reasonable jury could return a verdict
for the nonmoving party” on a factual issue. Anderson, 477 U.S. at 248; Woods,
409 F.3d at 990. To survive a motion for summary judgment, the “nonmoving
party must ‘substantiate his allegations with sufficient probative evidence [that]
would permit a finding in [his] favor based on more than mere speculation,
conjecture, or fantasy.’” Wilson v. Int’l Bus. Machs. Corp., 62 F.3d 237, 241 (8th

Cir. 1995)(quotation omitted);” Putnam v. Unity Health System, 348 F.3d 732, 733-34 (8th Cir. 2003). A plaintiff may not merely point to unsupported self-serving
allegations, but must substantiate allegations with sufficient probative evidence
that would permit a finding in the plaintiff’s favor. Wilson 62 F.3d at 241 (8th Cir.
1995); Smith v. International Paper Co., 523 F.3d 845,848 (8th Cir. 2008). “The
mere scintilla of evidence in support of the plaintiff’s position will be insufficient;
there must be evidence on which the jury could reasonably find for the plaintiff.”
Anderson, 477 U.S. 242 at 252; Davidson & Assoc. v. Jung, 422 F.3d 630, 638 (8th
Cir. 2005); Smith, 523 F.3d at 848.
The type of exclusionary language in the insurance policy has been held to
be unambiguous and enforceable. Childers v. State Farm Fire & Cas. Co., 799
S.W.2d 138, 141; Liberty Mut. Fire Ins. Co. v. Scott, 486 F.3d 418, 422-23 (8th
Cir. 2007); Santizo v. Allstate Property and Casualty Insurance Company, Cause
Number 4:09cv151 SNLJ, Memorandum, July 9, 2010; Allstate v. Estes, 118
F.Supp.2d 968, 972 (E.D.Mo 2000).
Under Missouri law, “a misrepresentation as to a portion of the loss may
void coverage to the entire claim.” Childers v. State Farm Fire & Cas. Co., 799
S.W.2d 138, 141 (Mo.Ct.App.1990). Misrepresentation, however, under Missouri
law “requires an intent to deceive.” United Fire & Cas. Co. v. Historic Pres. Trust,
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265 F.3d 722, 731 (8th Cir.2001) (citing Gould v. MFA Mut. Ins. Co., 331 S.W.2d
663, 669 (Mo.Ct.App.1960)).
Under Missouri law, a person who has an opportunity to read a document but
signs it without doing so is held to have knowledge of its contents. United States
ex rel. Bussen Quarries, Inc. v. Thomas, 938 F.2d 831, 833 (8th Cir.1991). But
knowledge of the contents of a document that contains false information does not
necessarily establish an intent to deceive. “Proof of a mere naked falsehood or
misrepresentation ordinarily is not enough” to void an insurance policy, because it
“is firmly established [that] the existence of a fraudulent intent or an intent to
deceive is an indispensable element.” Cohen v. Metro. Life Ins. Co., 444 S.W.2d
498, 505 (Mo.Ct.App.1969). If an insured knows, for example, that a document
says an object was in a home during a fire, and the insured genuinely believed that
the object was in the home, then proof that the object was elsewhere during the fire
does not establish that the person intended to deceive the insurer.
Missouri law also does not establish that Defendant is “conclusively bound”
by the representations made in the initial inventory. An insured may contradict or
explain the inventory at trial, and the credibility of the insured is typically a
question of fact for the factfinder. See Parks v. Md. Cas. Co., 230 Mo.App. 383,
91 S.W.2d 1186, 1192 (1936) (stating that statements in a proof of loss bind the
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insured “unless they are contradicted or explained at trial”); see also 13 Lee R.
Russ & Thomas F. Segalla, Couch on Insurance, § 197:14 (3d ed. 2005) (“As a
general rule, statements made in proofs of loss ... are not conclusive as to the
claimant, provided they were made in good faith and without an intent or attempt to
defraud the insurer.”).
The Eighth Circuit Court of Appeals’ decision in Liberty Mutual Fire
Insurance Co. v. Scott, 486 F.3d 418 (8th Cir.2007), is not to the contrary. Scott
held that an insured's material misrepresentation regarding her personal
property—reflected in discrepancies between an insurance proof of loss and a
bankruptcy petition—voided the insured's coverage for fire losses. 486 F.3d at
422–23. The Court noted, however, that the insured presented no evidence “that
the insurance proof of loss amounts resulted from mistake or were otherwise
inadvertent,” and that the only reasonable inference was that the insured made a
material misrepresentation to the insurer. Id. at 423. Unlike the insured in Scott,
Defendant has presented evidence that the discrepancies on the initial inventory
were a result of mistake or inadvertence, and therefore not the product of an intent
to deceive Plaintiff. Young v. Allstate Ins. Co. 685 F.3d 782, 784-787 (8th Cir. 2012).

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Conclusion
Based on the record before the Court, there exists genuine issues of material
fact. Plaintiff is therefore not entitled to judgment as a matter of law.
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ Motion for Summary
Judgment, [Doc. No. 24], is DENIED.
Dated this 28th day of August, 2013.

_______________________________
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE

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