Morris v. Economy Fire and Cas. Co.

• Decision Date: 20 September 2004
• Docket Number: No. 49A02-0402-CV-129.,49A02-0402-CV-129.
• Citation: 815 N.E.2d 129
• Parties: Dirk A. MORRIS and Lisa K. Bowman-Morris, Appellants-Plaintiffs, v. ECONOMY FIRE AND CASUALTY COMPANY, St. Paul Fire and Marine Insurance Company and Metropolitan Property and Casualty Insurance Company, Appellees-Defendants.
• Court: Indiana Appellate Court

815 N.E.2d 129

Dirk A. MORRIS and Lisa K. Bowman-Morris, Appellants-Plaintiffs, v. ECONOMY FIRE AND CASUALTY COMPANY, St. Paul Fire and Marine Insurance Company and Metropolitan Property and Casualty Insurance Company, Appellees-Defendants.

No. 49A02-0402-CV-129.

Court of Appeals of Indiana.

September 20, 2004.

Morris L. Klapper, G.R. Parish, Jr., Klapper Isaac & Parish, Indianapolis, IN, Attorneys for Appellants.

Alan A. Bouwkamp, Newton Becker, Reichert, Indianapolis, IN, Attorney for Appellees.

OPINION

RILEY, Judge.

STATEMENT OF THE CASE

Appellants-Plaintiffs, Dirk A. Morris (Dirk) and Lisa K. Bowman-Morris (Lisa), (collectively, "the Morrises"), appeal the trial court's order granting summary judgment in favor of Appellees-Defendants, Economy Fire and Casualty Company, St. Paul Fire and Marine Insurance Company, and Metropolitan Property and Casualty Insurance Company (collectively, "Economy").

We reverse and remand.

ISSUE

The Morrises raise two issues on appeal, which we consolidate and restate as follows: whether the trial court erred in granting summary judgment in favor of Economy.

FACTS AND PROCEDURAL HISTORY

On May 30, 2000, the owner of a mini-storage facility in Cloverdale, Indiana, contacted the Morrises to inform them that the storage unit that they rented from the facility had been broken into. Several items were taken from the Morrises' storage unit, including a number of personal property items. Dirk went to the site of the mini-storage facility and met with an Indiana State Police Officer. At that time, Dirk estimated the loss to be approximately $15,000.00, as the used or garage sale value of the property that was stolen.

On or around June 10, 2000, the Morrises reported their loss to the Morrises' insurer, Economy. Economy obtained a copy of the Indiana State Police report, which stated that the dollar value of property stolen from the rental unit was approximately $15,000.00. On June 12, 2000, Economy's claims adjuster took the recorded statement of Dirk. During this statement, Dirk listed various items stolen from the storage unit, including a computer, Lisa's clothes, perfumes, a wine collection, and rugs. Additionally, Dirk alleged that there were a variety of Snap-On, Craftsman and Maco tools valued at approximately $7,000.00, taken from the storage unit. Economy continued to investigate the Morrises' claim, and through its initial investigation determined the following, in pertinent part:

a. A large number of the personal property items[,] which were purportedly stolen[,] were very expensive tools.

b. The values of the property had gone from the $15,000.00 listed on the police record to $38,000.00 when the inventory was submitted by the Morrises.

c. [Dirk] represented to Economy that he was physically disabled.

d. Despite the fact that they were professional grade tools, [Dirk] claimed they were not used for [a] business purpose e. Dirk [] had not provided any receipts or documentation regarding purchases for obtaining these tools.

f. The Morris' home was for sale, although the reason for the sale was unknown.

(Appellant's App. pp. 141-42, 147, 215, 218, 252).

On October 9, 2000, the Morrises advised Dan Jackson (Jackson), a representative of Economy, that they sought counsel and that they would not communicate with Economy until after they spoke with their attorney. Nonetheless, Economy proceeded with its investigation, and subsequently determined that additional issues and questions needed to be addressed in order to make a determination regarding the Morrises' claim. Particularly, the record reflects that Economy requested, among other things, the Morrises': (1) federal and state income tax returns; (2) documentation of all income for all household residents' statements for accounts at any financial institution; (3) documentation of debts or obligations of household residents; (4) copies of all financial statements or loan applications provided by any household members; (5) all estimates, appraisals, receipts or canceled checks reflecting the cost of repairing or replacing the personal property which was claimed stolen; and (6) documentation of all materials used to prepare the Proof of Loss submitted. Additionally, Economy determined that it needed to examine the Morrises, separately, to aid their investigation.

Thus, Economy requested, through its attorney, the examinations under oath of the Morrises in accordance with the policy's express provisions and asked them to provide specific documents, including financial records. Economy claimed that the purpose of this investigation was to:

a. Determine whether the tools were used for business purposes and would, therefore, be subject to limitations under the Policy.

b. To verify the facts of the claim.

c. To ascertain whether a subrogation claim would be possible against the owner of the rental storage facility at which the tools were located.

d. Determine whether the Morrises had the financial capacity to obtain the more than Thirty[-]Eight Thousand Dollars ($38,000.00) in tools and other personal items which they claimed were stolen.

(Appellant's App. pp. 195, 218-19, 246).

On October 31, 2000, Economy forwarded correspondence to the Morrises requesting their separate examinations under oath and asked them to provide documentation necessary for Economy to investigate and adjust the claim. On November 11, 2000, the Morrises, through their attorney, wrote to Economy and requested the transcripts of the statements previously given by the Morrises. The Morrises also advised Economy that the Proof of Loss form sent by Economy's claims adjuster was improper and asked for an appropriate Proof of Loss form. The Morrises' attorney did not advise Economy whether his clients would submit to examinations under oath. On November 21, 2000, Economy, by counsel, advised that the Morrises would be provided a copy of the transcript of any recorded statement taken in this matter upon completion of their separate examinations under oath and receipt of the signed transcripts of the same.

By letter dated November 29, 2000, counsel for the Morrises advised that examinations under oath would not be conducted until they had a chance to review the recorded statements. The Morrises' counsel further threatened that, unless a copy of the audiotape of the Morrises' statements and an appropriate Proof of Loss form were received within ten days from the date of his letter, he would file suit on behalf of the Morrises. On December 27, 2000, the Morrises submitted their Proof of Loss form claiming the "Value of Loss" of the stolen items to be $38,038.28. (Appellant's App. p. 147).

On January 12, 2001, the Morrises filed their Complaint in Tort for Failure of Insurers to Deal in Good Faith. On March 13, 2001, Economy filed its Defendant's Answer, Affirmative Defenses, and Counterclaim for Declaratory Judgment. Economy's Counterclaim alleged, among other things, that the Morrises' failure to submit to examinations under oath and to provide requested financial documents and their act of filing a lawsuit were in violation of the express terms of the policy. On April 24, 2001, the Morrises filed their Plaintiffs' Reply to Counterclaim by Economy Fire and Casualty Company. On May 2, 2001, the Morrises filed their Plaintiffs' Motion for Leave to Amend their Complaint. The Amended Complaint included a count against Economy alleging that Economy breached the insurance policy by refusing to make any payment under it. On May 4, 2001, the Morrises filed their Motion to Compel. On May 23, 2001, Economy filed its Defendants' Amended Answer and Affirmative Defense.

On June 16, 2001, Economy filed its Motion for Protective Order and Response to Plaintiffs' Motion to Compel. On this same date, Economy filed its Memorandum in Support of Defendants' Motion for Protective Order and Response to Plaintiffs' Motion to Compel. On July 6, 2001, Economy filed its Motion to Compel Plaintiffs' Discovery Responses. On April 25, 2002, Economy filed its Defendants, Economy Fire and Casualty Company, St. Paul Fire and Marine Insurance Company, and Metropolitan Property and Casualty Insurance Company's Motion for Summary Judgment.

On May 3, 2002, the Morrises filed their Response to Defendants' Motion to Compel Production of Documents. On September 27, 2002, the Morrises filed their Motion for Summary Judgment on Defendants' Counterclaim for Declaratory Judgment. On October 25, 2002, Economy filed its Motion in Opposition to Motion for Summary Judgment on Defendant's Counterclaim for Declaratory Judgment.

On February 3, 2003, a hearing on the summary judgment motions was held. After hearing evidence from both sides, the trial court took the matter under advisement. On February 4, 2004, the trial court issued its Entry of Judgment on Defendant, Economy Fire & Casualty Company, St. Paul Fire & Marine Insurance Company, and Metropolitan Property and Casualty Insurance Company's Motion for Summary Judgment. In its Order, the trial court stated, in pertinent part:

And the [c]ourt having examined said Motion, the Briefs, and evidence submitted by the parties, having heard oral arguments, and being otherwise duly advised in the premises, now finds the following:

1. This matter was submitted to the [c]ourt upon Motion of the Defendants, Economy Fire and Casualty Company, St. Paul Fire and Marine Insurance Company and Metropolitan Property and Casualty Insurance Company.

2. That upon proper notice, all parties appeared by counsel.

3. That oral arguments were heard and evidence submitted.

4. That there exists no genuine issue as to the following facts:

a. On April 16, 1997, Economy issued a homeowner's policy of insurance to [the Morrises], Policy No. HOO1322284.

b. The insurance policy sets forth the duties of the insured and requires the insured to attach all bills, receipts and related documents that justify figures in the inventory.

c. The insurance policy sets forth the

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