Standard Mut. Ins. Co. v. Boyd, 1-583A140

• Decision Date: 30 August 1983
• Docket Number: No. 1-583A140,1-583A140
• Citation: 452 N.E.2d 1074
• Parties: STANDARD MUTUAL INSURANCE COMPANY, Defendant-Appellant, v. Kenneth BOYD, Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 1074

452 N.E.2d 1074

STANDARD MUTUAL INSURANCE COMPANY, Defendant-Appellant, v. Kenneth BOYD, Plaintiff-Appellee.

No. 1-583A140.

Court of Appeals of Indiana First District.

Aug. 30, 1983.

Peter G. Tamulonis, Kightlinger, Young, Gray & De Trude, Indianapolis, Ronald A. Hobgood, Kightlinger, Young, Gray & De Trude, Evansville, for defendant-appellant.

Dennis Brinkmeyer, Evansville, for plaintiff-appellee.

NEAL, Judge.

STATEMENT OF THE CASE

This is an interlocutory appeal by defendant-appellant, Standard Mutual Insurance Company (Mutual) from an order of the Vanderburgh Circuit Court denying Mutual's motion for summary judgment in an action for breach of an insurance contract brought by plaintiff-appellee, Kenneth Boyd (Boyd) who sustained a loss to his residence due to a fire.

We reverse.

STATEMENT OF THE FACTS

On June 18, 1980, Boyd's dwelling in Evansville, Indiana, was damaged by a fire. It was insured by Mutual under a homeowners policy which included the following provisions:

The insured, as often as may be reasonably required, shall ... submit to examinations under oath by any person named by this Company, and subscribe the same ...

No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with...

On June 25, 1980, Boyd had a recorded conversation with a representative of Mutual, and, on August 14, 1980, he submitted a "Sworn Statement in Proof of Loss" as required by the policy. Thereafter, Mutual requested Boyd to submit to examination under oath on September 11, 1980, as the policy provided. On that date, Boyd appeared with his attorney at the designated time and place, but refused to submit to examination despite notice of the applicable policy provisions. Mutual notified Boyd by letter on September 12, 1980, that his refusal to submit to examination under oath as requested constituted a breach of the policy conditions and would be asserted as a defense in the event Boyd pursued any claim against Mutual. For a second time Mutual requested Boyd to submit to examination under oath on September 16, 1980, a date selected by Boyd's attorney. Once again, Boyd refused to do so.

During the pre-trial phase, Boyd admitted that at no time on either September 11 or 16, 1980, did he submit to examination under oath by Mutual's counsel. The above facts were stipulated by the parties, and based upon those facts, the trial court entered findings, concluding as follows:

"The Court, having reviewed and considered the memoranda filed in support of and in opposition to Defendant's Motion for Summary Judgment and noting that, while there is legal authority in non-Indiana jurisdictions to support Defendant's Motion for Summary Judgment, but finding no Indiana case law which has dealt with the specific legal question presented by Defendant's Motion for Summary Judgment, does now deny Defendant's Motion for Summary Judgment due to the absence of controlling Indiana precedent."

In his affidavit filed in opposition to Mutual's motion for summary judgment, Boyd alleged that he "was a target defendant" in a possible "arson investigation" by law enforcement officials and that Mutual could not "guarantee" that any statement under oath would not be used in a criminal prosecution.

After the trial court denied Mutual's summary judgment motion, an interlocutory appeal was certified and ordered as it involved a substantial question of law of first impression in Indiana.

ISSUES

Mutual presents the following issues for review:

I. Whether the trial court erred in denying defendant's Motion for Summary Judgment based upon the undisputed facts;

II. Whether an insured is required to submit to an examination under oath when such a requirement is a condition precedent of the insured's insurance policy;

III. Whether an insured may refuse to comply with a fire insurance policy requirement requiring the insured to submit to an examination under oath after the insured has tendered to the insurance company his sworn statement in proof of loss;

IV. Whether an insured may refuse to comply with a fire insurance policy requirement requiring the insured to submit to an examination under oath after the insured has had conversation with a representative of the insurance company and has allowed his conversation to be recorded;

V. Whether the constitutional immunity from self-incrimination absolves an insured from complying with a fire insurance policy provision requiring the insured to submit to an examination under oath; and

VI. Whether an insured's refusal to submit to an examination under oath acts as a breach of the fire insurance contract such that it deprives the insured of any claim or cause of action against the insurer upon the fire insurance contract.

DISCUSSION AND DECISION

An order denying a motion for summary judgment is generally not an appealable interlocutory order, and is generally to be challenged by a motion to correct errors after a final judgment or order is entered. State, Department of Natural Resources v. Taylor, (1981) Ind.App. 419 N.E.2d 819. However, where the parties present no conflict in the operative facts and agree that there is no genuine issue of material fact necessitating resolution, and where the defendant raises defenses within its motion for summary judgment, which, if applicable, would entitle it to a judgment as a matter of law, the requisites of rule which allows appeals from interlocutory orders are met. Id. Such is the case here, and therefore, our review is limited to a consideration of whether the trial court erred in denying Mutual's motion for summary judgment as a matter of law.

The crucial question before us is whether an insured's refusal to submit to examination under oath constitutes a material breach of the insurance contract, thus depriving the insured of any claim or cause of action on the insurance contract against the insurer. Mutual argues that "[h]aving inexcusably failed to submit to any examination under oath, Mr. Boyd inexcusably breached material contract provisions and is, therefore, barred from recovery under the insurance policy." Mutual contends that the insured's obligations under the policy in the event of a loss are clear and unequivocal. Included therein is the requirement that the insured "shall ... submit to examinations under oath by any person named by the Company, and subscribe the same..." The policy further provides that no action shall be sustainable unless all the requirements under the policy have been complied with .

Indiana courts have not yet addressed this question; however, Mutual cites a number of cases from other jurisdictions which have reviewed the specific policy provisions in question, and those cases consistently hold that the failure of an insured to submit to examination under oath is a material breach of the policy which relieves the insurer of its contractual duty to pay. Kisting v. Westchester Fire Insurance Company, (7th Cir.1969) 416 F.2d 967; Southern Guaranty Insurance Company v. Dean, (1965), 252 Miss. 69, 172 So.2d 553; Lentini Brothers Moving & Storage Co., Inc. v. New York Property Insurance Underwriting Association, (1980) 76 A.D.2d 759, 428 N.Y.S.2d 684; Hallas v. North River Ins. Co. of New York, (1951) 279 A.D. 15, 107 N.Y.S.2d 359; Gross v. United States Fire Insurance Company, (1972) 71 Misc.2d 815, 337 N.Y.S.2d 221; Restina v. Aetna Casualty & Surety Company, (1969) 61 Misc .2d 574, 306 N.Y.S.2d 219; 13 A COUCH ON INSURANCE 2nd Sec. 49A:361 (Rev. ed. 1982); and 5A APPLEMAN INS. L. & P. Sec. 3549 (1970). ¹

In his appellee's brief, Boyd argues that he did submit a sworn statement of proof of loss which was sufficient notice to Mutual for it to investigate Boyd's claim. Further, Boyd contends that his refusal to submit to an oral examination under oath did not in any manner prejudice Mutual as to the claim made by Boyd. For authority, Boyd cites Gruenberg v. Aetna Insurance Company, (1973) 9 Cal.3d 566, 108 Cal.Rptr. 480, 510 P.2d 1032 for the proposition that the failure of an insured to give a sworn statement under oath and to provide documents concerning a fire loss does not defeat an insured's claim of loss.

Gruenberg, as Mutual points out, is inapposite to the case at bar since it involved a tort action brought against several insurers for breaching their duty of good faith and fair dealing to the insured. The insurers, the court found, had willfully and maliciously entered into a scheme to deprive the insured of the benefits of his fire insurance policies by falsely implying that the insured had a motive to deliberately set fire to and burn down his place of business. The insurers then used the fact that the insured failed to submit to examination under oath as a pretense for denying liability...