Vernon v. Aetna Insurance Company
| Decision Date | 29 November 1960 |
| Docket Number | Civ. A. No. 13172. |
| Citation | 189 F. Supp. 233 |
| Parties | C. A. VERNON et al., Plaintiffs, v. AETNA INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Percy Foreman, Cire & Jamail, George E. Cire, Houston, Tex., for plaintiffs.
Barrow, Bland & Rehmet, David Bland, Houston, Tex., for defendant.
The case is before the court on defendant's First Amended Motion for Summary Judgment.
Plaintiffs, C. A. Vernon and daughter, Marianne Vernon (named in the policy of insurance sued upon as Marianne Vernon Lorentzen), residents of Texas, base their claim for relief against defendant, Aetna Insurance company, hereinafter called Aetna, a corporate resident of the State of Connecticut, upon a personal property floater policy of insurance to which is attached a schedule of jewelry specifically insured for the sum of $49,150. The policy further covers unscheduled personal property, other than jewelry, in the amount of $26,000, and there is no coverage afforded by the policy on unscheduled jewelry other than $250 coverage for any one loss.
The policy affords all-risk coverage, subject however to the exclusions contained in the policy.
Plaintiffs state in their original complaint that on or about January 17, 1960, articles of jewelry valued at $27,700 were taken from the home of plaintiffs in Bryan, Texas, under circumstances that constituted burglary or theft.
Heretofore the court has dismissed defendant Phil Nabors, a resident of the State of Texas, from this suit because of the failure of the complaint to state a claim against him upon which relief could be granted. Defendant Aetna removed the case from the District Court of Brazos County, Texas, alleging properly that the resident defendant was fraudulently joined in order to defeat the removal jurisdiction of this court. Consequently, complete diversity of citizenship exists, and the amount involved is in excess of $10,000, giving this court jurisdiction under the provisions of Title 28 U.S.Code, §§ 1332 and 1441.
On May 20, 1960, Marianne Vernon appeared before a Notary Public in and for Brazos County, Texas, signed, subscribed and swore to a statement in which she confessed that the alleged burglary and theft described in plaintiffs' complaint was a complete hoax and a scheme and conspiracy devised to defraud Aetna into paying the proceeds of its policy upon a feigned act of burglary committed by C. A. Vernon. According to this sworn statement, the feigned act of burglary and the entirety of the scheme and conspiracy was known to Marianne Vernon at the time it was carried out.
Aetna filed its original motion for summary judgment on September 8, 1960, to which it attached a copy of the said affidavit of Marianne Vernon. A hearing was set by the court on defendant's original motion for summary judgment on October 31, 1960. Prior to such hearing, plaintiffs, along with affidavits of Mr. and Mrs. C. A. Vernon, filed another sworn statement dated October 28, 1960, of Marianne Vernon, in which she stated that the hoax and feigned act of burglary described in her affidavit of May 20, 1960, was not true and was completely false. This affidavit says that Marianne Vernon was induced to make the affidavit of May 20, 1960, by a man with whom she was in love. This second sworn statement further asserted that she, Marianne Vernon, simply concocted the facts stated in the May 20th statement about the participation of her father and mother in the feigned act of burglary and theft in order to protect said man with whom she was in love and prevent him from going to the penitentiary for the theft. I will not speculate upon the emotions and reactions of this woman, but one wonders how long she would love and trust him after she knew he had stolen her jewelry.
The two statements, under oath, given by Marianne Vernon are in direct conflict, one of which must be false and untrue as to the material facts covering whether an insured loss actually occurred.
The policy of insurance sued upon by plaintiffs contains the following langauge in paragraph 9 thereof:
"This policy shall be void if the Assured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof or in case of any fraud, attempted fraud or false swearing by the Assured touching any matter relating to this insurance or the subject thereof, whether before or after a loss."
Language of similar import contained in insurance policies consistently has been held operative and effective by the courts. Chaachou v. American Central Insurance Company, 5 Cir., 1957, 241 F.2d 889; 5 Appleman, Insurance Law and Practice, Section 3587; 29 American Jurisprudence, Section 1419, page 529.
Aetna invokes the above-quoted language and contends in its motion for summary judgment that the two affidavits given by Marianne Vernon, as a matter of law, constitutes fraud, attempted fraud, false swearing, concealment and misrepresentation, touching the subject matter of the insurance policy.
The court is convinced that Aetna's position is correct and that its First Amended Motion for Summary Judgment should be granted.
Admitting that the original statement, under oath, given by Marianne Vernon was false, nevertheless, plaintiffs urge the application of Article 21.19, Insurance Code of Texas, V.A.T.S., which is quoted as follows:
"Any provision in any contract or policy of insurance issued or contracted for in this State which provides that the same shall be void or voidable, if any misrepresentations or false statements be made in proofs of loss or of death, as the case may be, shall be of no effect, and shall not constitute any defense to any suit brought upon such contract or policy, unless it be shown upon the trial of such suit that the false statement made in such proofs of loss or death was fraudulently made and misrepresented a fact material to the question of the liability of the insurance company upon the contract of insurance sued on, and that the insurance company was thereby misled and caused to waive or lose some valid defense to the policy." (Emphasis supplied.)
In urging the application of this statute, plaintiffs contend that the May 20th statement of Marianne Vernon was the equivalent of a proof of loss or, in any event, was a statement made in support of a claimed loss given after Aetna invoked paragraph 11 of the policy sued upon which is quoted, in part, as follows:
"The Assured shall submit, and so far as is within his or their power shall cause all...
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Vernon v. Aetna Insurance Company
...and misrepresentation, as a matter of law, the district court rendered judgment for Aetna. The published opinion may be found at 189 F.Supp. 233. Appellee was entitled to judgment on its motion only if there were no genuine issues as to any material fact and if the uncontroverted facts esta......