INSURER
JUSTIFIED ITS REQUEST FOR LOSS DOCUMENTATION
|
Homeowner |
Bad Faith |
|
Cooperation |
Examination Under Oath |
American Family Insurance
(AFI) provided homeowner insurance coverage to Kelly and Rebecca Savage
(Savages) at the time of an alleged burglary. In early May, 2005, the Savages
claimed that they returned home and found that their auto was stolen and,
relevant to this claim, their home was burglarized. The Savages made a claim
for loss of personal property for $50,000. However, none of the reports or
proof of loss statements included any details that supported or documented what
they claim was taken. In fact, no information was entered in any document area
that asked for details about stolen or lost property. The Savages, eventually,
filed for summary judgment arguing that, among other issues, AFI was guilty of
breach of contract. The Savages appealed after the trial court ruled in favor
of AFI.
The appeals court reviewed
the matter. AFI sought to adjust the loss and, as part of its investigation,
discovered that, in 2000, the Savages filed bankruptcy and documented ownership
of less than $5,000 in personal property. Due to the lack of loss documentation
and the large discrepancy between the previously-reported personal property and
the $50,000 claim, AFI requested examining the Savages under oath as well as
copies of several years of tax returns. The Savages never completed the
examinations, nor did they submit the requested tax information.
The court focused on the
Savages’ argument that, in making its decision, the trial court erred by:
·
not
properly considering the Savages’ arguments
·
failing
to enforce an agreement that the original claim would continue processing after
the Savages submitted the request tax returns
·
failing
to rule on the Savages complaint that AFI’s timing of
its request for tax returns was unreasonable
In the opinion of the
higher court, the trial court handled the complaints properly including with
regard to breach of contract. Specifically, it found that the lower court addressed
the question of breach by ruling that AFI was NOT guilty of breach since the
insurer had never made a decision on whether it would honor the Savages claim.
With regard to enforcing an agreement, the higher court agreed with the lower
court that the two parties had never reached a point where any final agreement
was made, so any enforcement was moot. Finally, in light of the policy wording
regarding an insured’s post-loss duties, the court also agreed with the lower
court’s finding that AFI’s request for information to
assist with claim settlement (scheduling examinations under oath and the tax
returns) was well within its rights.
In the end, the higher
court ruled that the lower court addressed the dispute properly. The decision
against the Savages and in favor of AFI was affirmed.
Savage et
al., Appellants, v. American Family Insurance Company, Appellee. CtApp OH,
Tenth District. No. 081P-273 Filed September 4, 2008. Affirmed.
Westlaw 897 N.E. 2nd 195