BREACH OF "COOPERATION" CONDITION BY INSUREDS HELD TO WARRANT INSURER'S DENIAL OF BURGLARY CLAIM

Homeowner	Theft Exclusion
Cooperation	Fraud

Insureds made claim under their renters policy, which provided coverage for personal property against risks of loss except as specifically excluded, for a very large loss of expensive items by burglary. The amount of insurance was $300,000; the amount of claim, approximately $80,000.

A series of disclosures during the course of the insurer's investigation and the response of the insureds led to the insurer's denial of coverage for breach by the insureds of their contractual obligation to cooperate during the investigation. The insureds then sued the insurer for breach of contract.

The insurer sought summary judgment, citing the insureds' refusal and failure to furnish requested and needed information. Alternatively, it contended that misrepresentation or concealment of material facts in the application for insurance submitted by the insureds relieved it from liability. The insureds appealed trial court grant of summary judgment in favor of the insurer and dismissal of the case.

The appeal court was convinced by the following suspicious circumstances surrounding the case, as revealed in testimony: The insureds attributed their loss to a maid, but could not supply her last name or how to reach her; they could not furnish evidence of payment of a maid by check; they did not supply purchase or other evidence of the value or existence of the bulk of the items allegedly stolen; when it was apparent that the couple had insufficient income to have acquired such property, the woman said that her mother gave them substantial sums but could not or would not provide the name and address of her mother; income tax returns had not been filed for more than ten years and there was evidence of credit card payment default and fraud.

The court concluded that the insureds' refusal to cooperate relieved the insurer from any obligation with respect to the claim. It was not necessary to address concealment of material facts, in the application for insurance, about a previous large loss.

The judgment of the trial court was affirmed in favor of the insurer and against the insureds.

(HELD ET AL., Appellants v. VIGILANT INSURANCE COMPANY, Respondent. Washington Court of Appeals, Division One. No. 33980-0-l. April 24, 1995. CCH 1995 Fire and Casualty Cases, Paragraph 5285.)