Farley et al v. State Farm Fire & Casualty Co. et al

Filing 68

REPORT AND RECOMMENDATION: For the foregoing reasons, the undersigned concludes that there are no genuine issues as to any material fact and that Defendants are entitled to judgment as a matter of law. Accordingly, the undersigned recommends that Def endants' Motion for Summary Judgment be GRANTED, and that this action be DISMISSED. Signed by Magistrate Judge E. Clifton Knowles on 1/24/13. (xc:Pro se party by regular and certified mail.)(DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(tmw)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION

ROGER FARLEY and wife,
CAROLYN FARLEY,
Plaintiffs,

vs.

STATE FARM FIRE & CASUALTY
CO. and JOSEPH ROOKER, AGENT
for STATE FARM INSURANCE,
Defendants.

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CASE NO. 1:10-00096
JUDGE SHARP / KNOWLES

REPORT AND RECOMMENDATION
I. Introduction and Background
This matter is before the Court upon Defendants’ Motion for Summary Judgment.
Docket No. 59. Defendants have contemporaneously submitted a Memorandum of Law with
Exhibits (Docket Nos. 60 - 60-8), a Statement of Undisputed Material Facts with Exhibits
(Docket Nos. 61 - 61-8), and a transcript of proceedings in the Criminal Court of Hickman
County, State of Tennessee v. Carolyn Farley and Roger Farley, Case Nos. 09-5207CRV and 095150CRV (Docket No. 62).
Plaintiffs, who are acting pro se, have not responded to the instant Motion or
accompanying Statement of Undisputed Material Facts.
This case involves a claim that Defendants breached an insurance contract with Plaintiffs
by failing to pay for damage to Plaintiffs’ home and personal property resulting from a house fire

which were allegedly covered by an insurance policy issued by Defendants. Plaintiffs initially
filed suit against only Defendant State Farm Fire & Casualty Co., in the Chancery Court for
Hickman County, Tennessee, on June 25, 2009. Case No. 1:09-00046, Docket No. 1-1.
Defendant State Farm removed that action to this Court on August 10, 2009, on the basis of
diversity of citizenship. Case No. 1:09-00046, Docket No. 1.
On October 8, 2009, the parties to the prior action filed a “Joint Motion Pursuant to Rule
41(A) of the Federal Rules of Civil Procedure.” Case No. 1:09-00046, Docket No. 8. With the
Motion, the parties filed a proposed Agreed Order that was later entered by Judge Trauger. Case
No. 1:09-00046, Docket No. 8-1.
Plaintiffs were represented by counsel in the prior action.
Almost a year later, on October 6, 2010, Plaintiffs, acting pro se, filed a second
Complaint in the Chancery Court for Hickman County against Defendant State Farm and against
“Joseph Rooker, Agent for State Farm Insurance.” That action was virtually identical to the
previous action, except for naming Defendant Rooker as an Agent for State Farm and except for
the fact that it was filed pro se. Docket No. 1-1. That action was removed by State Farm on
October 25, 2010, and became the instant case in this Court. Docket No. 1.
Plaintiffs’ claims against Defendant Rooker were subsequently dismissed by Judge
Campbell. Docket No. 19. Approximately one month later, Plaintiffs retained counsel (Docket
No. 27) and the Court thereafter allowed the filing of an Amended Complaint (Docket No. 47)
that brought Defendant Rooker back into the case. Docket No. 46. In that Amended Complaint,
Plaintiffs raised claims that Defendant Rooker had entered into a contract to provide insurance
brokerage services to Plaintiffs, but that he breached that contract when he improperly completed

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Plaintiffs’ application for the insurance policy at issue. Plaintiffs essentially averred that
Defendant Rooker completed the insurance application alone, without any input from Plaintiffs,
and that Defendant Rooker stated in the application that Plaintiffs had not experienced any losses
in the three years prior to the application, although they had sustained two previous fire losses.
Plaintiffs averred that Defendant Rooker had incorrectly and improperly completed their
application, which led State Farm to deny coverage. Plaintiffs claimed that Defendant Rooker’s
actions constituted breach of contract, negligence, negligent misrepresentation, and breach of
fiduciary duty, all resulting from his allegedly improperly filling out the application. Docket No.
47.
The Amended Complaint also raised new claims against Defendant State Farm for
“negligence” and “respondeat superior.” The Amended Complaint also retained a claim for
breach of contract against State Farm. Id.
Defendants filed the instant Motion for Summary Judgment and supporting materials on
October 10, 2012.1 Docket Nos. 59-62. Defendants contend that they are entitled to summary
judgment because numerous items that Plaintiffs’ had claimed to be destroyed in the fire at their
home were recovered at another residence owned by Plaintiffs over a year later. Docket No. 60.
Defendants argue that Plaintiffs’ misrepresentations of what was destroyed in the fire, and their
seeking reimbursement for those items, constituted fraud so as to void their insurance policy and
relieve Defendants from the obligation to pay Plaintiffs on their claim. Id. Defendants contend
that there are no genuine issues of material fact because Plaintiffs admitted under oath that they
made false statements and submitted fraudulent claims to Defendants. Id. Defendants maintain

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In the meantime, Plaintiffs’ counsel had been permitted to withdraw. Docket No. 55.
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that Plaintiffs admittedly made intentionally fraudulent statements to Defendants regarding items
lost in the fire with the intent to deceive them regarding their fire loss claim, such that under both
the insurance policy and Tennessee law, their coverage is voided and recovery is precluded. Id.
As has been noted, Plaintiffs have failed to respond to the instant Motion and Statement
of Undisputed Material Facts.
For the reasons set forth below, the undersigned recommends that Defendants’ Motion
for Summary Judgment be GRANTED.
II. Undisputed Facts2
Plaintiffs filed suit alleging breach of contract and contending that Plaintiffs are entitled
to collect the insurance proceeds due them from Defendants for a fire loss sustained at their
residence located at 4621 Coble to Only Road in Centerville, Tennessee on February 24, 2009.
See Amended Complaint.
Prior to the loss at issue, Defendant State Farm had issued a homeowner’s policy of
insurance to Plaintiffs. Docket No. 61-3, Certified Copy of Insurance Policy. On May 22, 2009,
Plaintiffs submitted to Defendant a sworn proof of loss regarding the claim on their residence.
Docket No. 61-4, Sworn Proof of Loss. Plaintiffs also submitted a sworn inventory of contents
list in which they listed the contents that they claim were lost in the fire and sought
reimbursement from Defendant. Docket No. 61-5, Sworn Contents List.
On August 9, 2010, eighteen items, including, but not limited to, a bedroom suite, several
antique tables, hunting items, a stuffed coyote, a dining set, and three antique wash stands were

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Unless otherwise noted, the following facts are in a form required by Fed. R. Civ. P. 56
and are undisputed.
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recovered from Plaintiffs residence located at 1748 Whitson Bend Road in Centerville,
Tennessee. Docket No. 61-6, Affidavit of Mr. S.M. Smith. These eighteen items were the same
items that Plaintiffs included in their Sworn Inventory of Contents List submitted to Defendant
in May of 2009 for payment of said items. Id.; see also, Docket No. 61-5, Sworn Contents List.
In November 2011, Plaintiff Carolyn Farley admitted under oath that she signed and
submitted a proof of loss claim to Defendant for recovery and payment in regard to the residence
and personal property that was lost in the house fire. Docket No. 62-1, Transcript, pp. 26-27.
She also admitted that well over $10,000 worth of these same items she claimed in the inventory
of contents list were not in the home at the time of the fire. Id.
In November 2011, Plaintiff Roger Farley admitted under oath that he signed and
submitted a proof of loss claim to Defendant for recovery and payment in regard to the residence
and personal property that was lost in the house fire. Id., pp. 36-37. He also admitted that well
over $60,000 worth of these same items he claimed in the personal property inventory were not
in the home at the time of the fire. Id. He further admitted under oath that he owned a cabin and
that he was aware that it was being burned, but still submitted a claim to Defendant for said loss,
and received over $60,000 for the claim from Defendant. Id., pp. 44-45.
Plaintiffs’ insurance policy states in part as follows:
SECTION I AND II - CONDITIONS
2. Concealment of Fraud. This policy is void as to you and any
other insured, if you or any other insured under this policy has
intentionally concealed or misrepresented any material fact or
circumstance relating to this insurance, whether before or after a
loss.
Docket No. 61-3, Certified Copy of Insurance Policy.
III. Analysis
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A. Local Rules 7.01(b) and 56.01(c) and (g)
Local Rule 7.01(b) states, in pertinent part:
b. Response. Each party opposing a motion shall serve and file a
response, memorandum, affidavits and other responsive material
not later than fourteen (14) days after service of the motion,
except, that in cases of a motion for summary judgment, that time
shall be twenty-one (21) days after the service of the motion,
unless otherwise ordered by the Court. Failure to file a timely
response shall indicate that there is no opposition to the motion.
Defendants filed the pending Motion on October 10, 2012. Docket No. 59. Plaintiffs
have failed to respond to Defendants’ Motion.
Additionally, with respect to Motions for Summary Judgment specifically, Local Rules
56.01(c) and (g) state, in pertinent part:
c. Response to Statement of Facts. Any party opposing the
motion for summary judgment must respond to each fact set forth
by the movant by either (i) agreeing that the fact is undisputed; (ii)
agreeing that the fact is undisputed for the purpose of ruling on the
motion for summary judgment only; or (iii) demonstrating that the
fact is disputed. Each disputed fact must be supported by a citation
to the record. ...
...
g. Failure to Respond. Failure to respond to a moving party’s
statement of material facts, or a non-moving party’s statement of
additional facts, within the time periods provided by these Rules
shall indicate that the asserted facts are not disputed for the
purposes of summary judgment.
Plaintiffs have failed to respond to Defendants’ Statement of Undisputed Material Facts.
Pursuant to Local Rule 56.01(g), Plaintiffs’ failure to respond indicates “that the asserted facts
are not disputed for the purposes of summary judgment.” Accordingly, there are no genuine
issues as to any material fact and all that remains to be determined is whether Defendants are
entitled to a judgment as a matter of law.

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B. Motion for Summary Judgment
It would be inappropriate to grant Defendants’ Motion solely on the ground that Plaintiff
have failed to respond. See Stough v. Mayville Community Schools, 138 F.3d 612, 614 (6th Cir.
1998). As the Sixth Circuit has stated:
[A] district court cannot grant summary judgment in favor of the
movant simply because the adverse party has not responded. The
Court is required, at a minimum, to examine the movant’s Motion
for Summary Judgment to ensure that he has discharged [his
initial] burden ... The federal rules require that the party filing a
Motion for Summary Judgment “always bears the burden of
demonstrating the absence of a genuine issue as to a material fact.”
Id. (citations omitted). The Court will, therefore, consider whether Defendants have met their
burdens under the appropriate summary judgment standards discussed below.
Under Fed. R. Civ. P. 56(c), summary judgment is appropriate only “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.” A dispute is “genuine” only if “the evidence is such
that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986).
In order to prevail on a Motion for summary judgment, the moving party must meet the
burden of proving the absence of a genuine issue as to material fact concerning an essential
element of the opposing party’s claim. Celotex v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548,
2553, 91 L. Ed. 2d 265 (1986); Street v. J.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir.
1989). In determining whether the moving party has met its burden, the Court must view the
evidence in the light most favorable to the nonmoving party. Matsushita Electric Indus. Co. v.

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Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986).
Fed. R. Civ. P. 56 provides that the nonmoving party may not rest upon the mere
allegations or denials of his or her pleading, but his or her response, by affidavits or otherwise,
must set forth specific facts showing that there is a genuine issue for trial. If a nonmoving party,
however, 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, there is no
genuine issue as to any material fact because a complete failure of proof concerning an essential
element of the nonmoving party’s case necessarily renders all other facts immaterial. Celotex,
477 U.S. at 322-23, 106 S. Ct. at 2552, 91 L. Ed. 2d at 273. When this occurs, the moving party
is entitled to summary judgment as a matter of law. Id. at 322-23, 106 S. Ct. at 2552; Williams v.
Ford Motor Co., 187 F.3d 533, 537-38 (6th Cir. 1999).
C. The Case at Bar
It is undisputed that Plaintiffs admitted under oath that they claimed certain items had
been destroyed in the fire, when they knew that those items were not in the home at the time of
the fire and were not destroyed in the fire. Plaintiffs have admitted that they sought to collect
insurance proceeds on those items. It is further undisputed that Plaintiffs’ insurance policy
contained a clause explicitly voiding the policy if any person insured by the policy intentionally
concealed or misrepresented any material fact or circumstance relating to the insurance, whether
before or after a loss. Because it is undisputed that Plaintiffs’ intentionally misrepresented that
items were lost in the fire that were not lost, and intentionally sought reimbursement on those
misrepresentations, Plaintiffs’ insurance policy is void. Plaintiffs, therefore, cannot recover from
State Farm on a breach of contract theory.

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Furthermore, Plaintiffs’ claims against State Farm for negligence and respondeat
superior, and Plaintiffs’ claims against Defendant Rooker for breach of contract, negligence,
negligent misrepresentation, and breach of fiduciary duty, must likewise fail. As discussed
above, these claims set out in the Amended Complaint were based upon the allegation that
Defendant Rooker, acting alone, had erroneously completed Plaintiffs’ application for insurance.
Even if that were true, however, Plaintiffs did not suffer any damage or injury from the actions
of Defendants Rooker or State Farm. As discussed above, State Farm was entitled to deny
coverage based upon the “Concealment of Fraud” condition, because of misrepresentations
Plaintiffs made after the loss occurred. Thus, Plaintiffs would have suffered the same loss (i.e., a
denial of benefits under the insurance policy) regardless of the alleged improper completion of
the application.
IV. Conclusion
For the foregoing reasons, the undersigned concludes that there are no genuine issues as
to any material fact and that Defendants are entitled to judgment as a matter of law.
Accordingly, the undersigned recommends that Defendants’ Motion for Summary Judgment be
GRANTED, and that this action be DISMISSED.
Under Rule 72(b) of the Federal Rules of Civil Procedure, any party has fourteen (14)
days after service of this Report and Recommendation in which to file any written objections to
this Recommendation with the District Court. Any party opposing said objections shall have
fourteen (14) days after service of any objections filed to this Report in which to file any
response to said objections. Failure to file specific objections within fourteen (14) days of
service of this Report and Recommendation can constitute a waiver of further appeal of this

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Recommendation. See Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L. Ed. 2d 435 (1985),
reh’g denied, 474 U.S. 1111 (1986); 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72.

E. Clifton Knowles
United States Magistrate Judge

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