McDowell v. Allstate Vehicle & Prop. Ins. Co.

Decision Date17 November 2022
Docket Number21-0603
CourtSupreme Court of West Virginia

Submitted: October 5, 2022

Appeal from the Circuit Court of Fayette County The Honorable Paul M. Blake, Jr., Judge Civil Action No. 19-C-129

Erwin L. Conrad, Esq. Conrad & Conrad PLLC Fayetteville, West Virginia Counsel for the Petitioners

Brent K. Kesner, Esq. Ernest G. Hentschel, II, Esq. Kesner &amp Kesner, PLLC Charleston, West Virginia Counsel for the Respondents


1. "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syl. pt. 3 Aetna Casualty & Surety Co. v. Federal Ins. Co. of N.Y., 148 W.Va. 160, 133 S.E.2d 770 (1963).

2 "W.Va. Code, 33-6-7 (1957), provides that '[m]isrepresentations, omissions, concealments of facts, and incorrect statements shall not prevent a recovery under the policy unless. . . .' This language indicates that not all misrepresentations will avoid an insurance policy, but only those specifically identified in subsections (a), (b), and (c) of the statute." Syl. pt. 3, Powell v. Time Ins. Co., 181 W.Va. 289, 382 S.E.2d 342 (1989).

3. "Under W.Va. Code, 33-6-7(b) and (c) (1957), in order for a misrepresentation in an insurance application to be material, it must relate to either the acceptance of the risk insured or to the hazard assumed by the insurer. Materiality is determined by whether the insurer in good faith would either not have issued the policy, or would not have issued a policy in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or otherwise." Syl. pt. 5, Powell v. Time Ins. Co., 181 W.Va. 289, 382 S.E.2d 342 (1989).

4. "W.Va. Code, 33-6-7 (1957), adopts the test of whether a reasonably prudent insurer would consider a misrepresentation material to the contract." Syl. pt. 6, Powell v. Time Ins. Co., 181 W.Va. 289, 382 S.E.2d 342 (1989).

5. "[N]either West Virginia Code § 33-6-7(b) nor (c) [1957] requires that an insurer prove the subjective element that an insured specifically intended to place misrepresentations, omissions, concealments of fact, or incorrect statements on an application in order for the insurer to avoid the policy." Syl. pt. 6, in part, Massachusetts Mut. Life Ins. Co. v. Thompson, 194 W.Va. 473, 460 S.E.2d 719 (1995).

6. "Where an insurer seeks to avoid a policy based on a material misrepresentation, this assertion is in the nature of an affirmative defense which the insurer must prove by a preponderance of the evidence." Syl. pt. 7, Powell v. Time Ins. Co., 181 W.Va. 289, 382 S.E.2d 342 (1989).

7. Under West Virginia Code § 33-6-7 (1957), the materiality of a misrepresentation on an application for an insurance policy is ordinarily a jury question. However, if the evidence excludes every reasonable inference except that the misrepresentation was material, then the question of materiality becomes one of law for the court.



West Virginia Code § 33-6-7(b) and (c) (1957) permit an insurer to rescind a policy if the insurer establishes that the application for the policy contains answers that are false and were material to the insurer's decision to issue the policy.

In this appeal from the Circuit Court of Fayette County, homeowner Damon McDowell ("McDowell") purchased an insurance policy from Allstate Vehicle and Property Insurance Company ("Allstate") for a derelict house McDowell intended to remodel. After a fire, Allstate sought to rescind the policy, claiming that McDowell digitally signed an application whereon he falsely answered a question regarding whether he would occupy the house within thirty days. McDowell contends that he never saw the application; never signed it; and that his answer was not false because he entered the property within thirty days to store personal property and begin renovations. McDowell also asserts that Allstate never demonstrated that the thirty-day-occupancy question on the application was material to its decision to issue the policy, in part because the question conflicts with the terms of the policy.

The circuit court granted summary judgment in favor of Allstate's decision to rescind the policy. McDowell now appeals the summary judgment order. We reverse the order and conclude that questions of material fact exist regarding whether McDowell's answer to Allstate's thirty-day-occupancy question was false, and whether the question was material to Allstate's issuance of the policy. We also remand the case for further proceedings.

I. Factual and Procedural Background

In May of 2019, plaintiffs McDowell and Deeanna Lawson[1] purchased a house located at 219 Highland Avenue in Oak Hill, West Virginia. They paid $37,000 for the house. McDowell contends that he and his wife, plaintiff Mary McDowell, stored personal property in the house. This case involves insurance coverage on the house, and the facts revolve almost exclusively around McDowell.

Defendant Patrick O. Hambrick, Jr., is an insurance agent who sells policies for defendant Allstate. McDowell asserts that he had known agent Hambrick for several decades prior to 2019, and agent Hambrick knew McDowell was "fixing up houses." In mid-May, McDowell contends he had a discussion in a grocery store with agent Hambrick, and they talked about McDowell's purchase of and intent to remodel the Highland Avenue house. Agent Hambrick said he was selling homeowner's insurance, and he gave McDowell a business card and said he would like to earn McDowell's business.

McDowell contacted agent Hambrick who asked McDowell questions that are not apparent from the record. Based on that conversation, agent Hambrick prepared a "personalized insurance proposal" for a homeowner's insurance policy from Allstate for McDowell. It appears that, based upon the proposal, McDowell agreed to purchase an Allstate policy. However, it is unclear from the record how the policy was obtained.

A. The Application

The focus of this appeal is an application for coverage, a six-page document with typewritten answers that was apparently electronically prepared on May 17, 2019, sometime after agent Hambrick prepared the proposal. Allstate and McDowell have proffered two different versions of the application. The version of the application proffered by Allstate has a blank on page four titled "Applicant's Initials" followed by "D. M." There is also a blank on page six titled "Applicant's Signature" below the statement "I have read this entire application before signing." The signature blank on page six of Allstate's version of the application contains the following printed text:

Signed by: DAMON MCDOWELL Date: 2019.05.17 14:01:16 CDT

McDowell argues that he never initialed or signed the application and never saw it until some months later, after Allstate told him he had made misrepresentations on the application. McDowell alleges that Allstate sent him a version of the application. That printout of the application, proffered by McDowell, does not contain McDowell's initials, and it does not contain his printed signature.

Moreover, McDowell and Allstate offer two wholly different versions of the circumstances surrounding the completion of the application. As we understand the record, McDowell contends that, on May 17, after he had spoken with agent Hambrick and received the proposal for an Allstate policy, and while he was in the middle of reroofing a church, he received a telephone call from Lilly Hoover, an employee in agent Hambrick's office. McDowell recalls that Hoover asked him questions about the house. Furthermore, McDowell says Hoover "did some kind of Skype thing from a satellite" and told him the square footage of the house and told him the house's replacement value. McDowell gave Hoover a credit card number, Allstate charged a premium to the credit card, and a few days later he received documents showing he had insurance on the Highland Avenue house from Allstate.

Allstate counters that the purpose of the phone call was so that Hoover could complete the application using the answers given by McDowell. For instance, "dwelling information" on the application indicates that McDowell said the purchase price for the house was $37,000, but that he estimated its "current market value" was $300,000. However, the application also contains blanks filled with detailed information supplied solely by Allstate. In a section titled "Estimator" that used "Residential Component Technology (tm)," Allstate (not McDowell) identified the insured property as a two-story, single-family house built in 1921, identified the materials used to construct and decorate the house, and declared the house had 1,578 square feet of living area. On the application, Allstate placed the replacement cost of the house at $379,618. Significantly, the application contains the typed signature of agent Hambrick below this statement: "I have not inspected the premises." Allstate contends McDowell electronically signed the completed application after being given an opportunity review the document; Allstate does not, however, identify how he was able to review the application or how the signature was obtained.[2]

In his deposition, McDowell argued that he would never have signed the version of the application proffered by Allstate, if he had seen it, because it contains errors. For instance, the application identifies the co-owner...

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