766 F.3d 532 (6th Cir. 2014), 13-3887, Rose v. State Farm Fire & Cas. Co.

Docket Nº:13-3887
Citation:766 F.3d 532
Opinion Judge:SILER, Circuit Judge.
Party Name:RICHARD K. ROSE, Plaintiff-Appellant, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant-Appellee
Attorney:Don C.A. Parker, SPILMAN, THOMAS & BATTLE, PLLC, Charleston, West Virginia, for Appellant. Gregory A. Harrison, DINSMORE & SHOHL LLP, Cincinnati, Ohio, for Appellee. Elliot G. Hicks, Michael G. Gallaway, SPILMAN, THOMAS & BATTLE, PLLC, Charleston, West Virginia, for Appellant. Gregory A. Harrison...
Judge Panel:Before: SILER, GILMAN, and GIBBONS, Circuit Judges.
Case Date:September 08, 2014
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
SUMMARY

Rose’s Bidwell, Ohio home was insured by State Farm. Rose also had a Personal Articles Policy that covered two Rolex watches. In 2009, a fire destroyed the house. Later that day, Rose made a claim of $696,373.30 for the dwelling, $512,765.57 for damage to personal property, $30,000 for living expenses, and $29,850 for one Rolex watch. State Farm’s investigator took a recorded statement from Rose... (see full summary)

 
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Page 532

766 F.3d 532 (6th Cir. 2014)

RICHARD K. ROSE, Plaintiff-Appellant,

v.

STATE FARM FIRE & CASUALTY COMPANY, Defendant-Appellee

No. 13-3887

United States Court of Appeals, Sixth Circuit

September 8, 2014

Argued June 18, 2014

Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 2:10-cv-00874-George C. Smith, District Judge.

ARGUED:

Don C.A. Parker, SPILMAN, THOMAS & BATTLE, PLLC, Charleston, West Virginia, for Appellant.

Gregory A. Harrison, DINSMORE & SHOHL LLP, Cincinnati, Ohio, for Appellee.

ON BRIEF:

Elliot G. Hicks, Michael G. Gallaway, SPILMAN, THOMAS & BATTLE, PLLC, Charleston, West Virginia, for Appellant.

Gregory A. Harrison, DINSMORE & SHOHL LLP, Cincinnati, Ohio, for Appellee.

Before: SILER, GILMAN, and GIBBONS, Circuit Judges.

OPINION

Page 533

SILER, Circuit Judge.

Richard Rose owned a house in Ohio that burned in a fire. An investigation as to whether the fire was purposefully caused was ultimately inconclusive. Nevertheless, State Farm Fire and Casualty Company (State Farm), the holder of Rose's homeowner's insurance policies, denied his claim. Rose initiated suit, alleging breach of contract and bad faith. State Farm asserted that the policies were void because Rose concealed material information about his financial status when he was interviewed after the fire. The district court agreed and granted summary judgment to State Farm on both of Rose's claims. Because we find that a factual question remains as to whether Rose misled State Farm's investigators regarding his financial situation, we REVERSE and REMAND.

Page 534

I.

Rose owned a home in Bidwell, Ohio, that was insured by State Farm under a homeowner's policy that was in effect during the time of the fire. Although that policy covered most of his personal property, Rose also had a Personal Articles Policy that covered two Rolex watches. Collectively, these policies are the subject of this litigation.

On the morning of January 7, 2009, a fire destroyed Rose's home. The district court summarized the information Rose provided about that morning:

On that day, [Rose's] wife left for work at her usual time, somewhere between 7:45am and 8:20am. [He] remained in the home with his four dogs. As was his usual custom, [Rose] believes he probably smoked a cigarette while drinking his coffee. At some point, he drove his SUV down his driveway to see if his neighbor was available to talk about some work the neighbor was supposed to perform on [Rose]'s property. The neighbor was not at his shop, and between five and ten minutes later, [Rose] returned to his property. While he was in the front of the property, he noticed smoke coming out of the upstairs foyer window. Because his front door was locked, [Rose] ran around to the unlocked backdoor where he saw smoke and flames through the double windows of his kitchen area. [Rose] then ran to the sliding glass door at the back of the house where his dogs were sitting, 'in a state of panic.' (Rose Dep. at 95). He opened the door and let his dogs out; the oldest dog had to be pulled out from underneath the dining room table. At this point the dogs were about twelve feet from where [Rose] had seen flames in the window. Shortly thereafter, the windows over the kitchen sink blew out. [Rose] then called 911 and placed his dogs in his truck. He could not recall whether the dogs were covered in soot or smelled of smoke. [Rose]'s wife testified that the dogs smelled and required baths and that one dog was seen by the veterinarian.

Rose v. State Farm, No. 2:10-cv-874, 2012 WL 3583248, at *1 (S.D. Ohio Aug. 20, 2012). Later that day, Rose reported to State Farm a fire loss with respect to his home and personal property. He claimed $696,373.30 for the dwelling, $512,765.57 for damage to personal property, $30,000 for additional living expenses, and $29,850 for one Rolex watch.

State Farm assigned Rob Raker to investigate Rose's claim. On January 20, 2009, Raker took a recorded statement from Rose and his current wife, Shelly Rose. He also spoke with Rose's ex-wife, Kim Jividen, and gathered information by searching public records, such as court and real estate records. Raker also retained a fire investigator. After visiting the remains of the house, analyzing burn patterns, and consulting with electrical-engineering experts, the fire investigator issued a report regarding the cause of the fire. The report found that the fire originated in the kitchen area of the home, that electrical items did not appear to be the source of the fire, and that neither smoking nor cooking was suspected as a cause. Although the report indicated that non-reported human action could not be eliminated as a cause, it did not specifically conclude that the fire was " incendiary," i.e., deliberately ignited. At the conclusion of its investigation, State Farm denied Rose's claims for insurance proceeds. The company alleged Rose violated the " Intentional Acts" and " Concealment or Fraud" conditions of his respective insurance policies.1

Page 535

In 2010, Rose sued for money damages in Ohio state court, alleging breach of contract against State Farm as well as a tort claim for bad faith. After State Farm properly removed the case to federal court on diversity grounds, both parties filed cross-motions for summary judgment. On the issue of whether the fire was incendiary, the district court found that multiple issues of material fact remained. Accordingly, the court declined to grant summary judgment to either party based on the " Intentional Acts" clause. The district court, however, did find that some of the answers Rose gave in his recorded statement to State Farm were both misleading and material. Specifically, it held...

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