A judge in the Federal District Court of Oregon recently granted summary judgment in favor of two insurance companies on a breach of contract claim on the basis that the policyholder “participated in the theft and misrepresented facts regarding the loss” in Gerke v Travelers Cas, Ins Co. of America, et al., 2013 WL 6241983 (D. Or. Dec. 3, 2013). In the case, the policyholder filed a lawsuit against his two insurance companies alleging they breached the insurance contracts for improperly denying his insurance claim after his truck and inventory were allegedly stolen. The insured operated an automotive tool supply business. As part of the business, the policyholder owned a box truck that was used to transport his inventory of tools. In April 2009, the insured’s box truck was found on fire. The policyholder, who was out of the area at the time, informed police that the truck and tools must have been stolen. The policyholder the filed claims for the loss under the insurance policies he had taken out to cover the truck and inventory. He estimated the truck was worth about $90,000 and valued the inventory at $145,000. All of the applicable insurance policies contained a condition precluding coverage in the event the insured concealed or misrepresented material facts concerning the loss.
Several years after the loss, in December 2012, the police received a tip indicating that the policyholder asked a third-party to steal the insured box truck and destroy it so the policyholder could file a false insurance claim. In return, the third-party was to take the tool inventory and sell it. When confronted by the police, the third-party admitted he was paid by the policyholder to take something and that he sold the tools to individuals throughout the state. The third-party was arrested and charged with first-degree arson. The police also interviewed the policyholder, who admitted to the plan. Based on the information obtained by the police, the insurance companies moved for summary judgment pursuant to the fraud/misrepresentation clauses in the applicable insurance policies. The court agreed with the insurance companies and granted summary judgment.
The insurance coverage attorneys at Maloney Lauersdorf Reiner have significant knowledge and experience in analyzing issues of fraud and misrepresentation, including conducting examinations under oath, providing coverage advice, and litigating cases involving allegations of fraud and misrepresentations. Please contact us with any questions or concerns about these issues, this case, or any other case you see on the MLR Insurance Coverage Blog.