Case Title: Progressive Insurance Co. v. Wasoka

Citation: 178 Vt. 337, 2005 VT 76, 885 A.2d 1166

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2005-07-08T00:00:00Z

Document:
Progressive Insurance Co. v. Wasoka (2003-451); 178 Vt. 337; 885 A.2d 1166

2005 VT 76

[Filed 08-Jul-2005]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 2005 VT 76

                                No. 2003-451

  Progressive Insurance Company	                 Supreme Court

                                                 On Appeal from
       v.	                                 Rutland Superior Court

  Gregory Wasoka and Robert Cerdeira	         June Term, 2004

  Richard W. Norton, J.

  Laurie LeClair and Susan J. Flynn of Clark, Long, Werner & Flynn, P.C.,
    Burlington, for Plaintiff-Appellant.

  Mark E. Furlan of Abatiell Associates, P.C., Rutland, for
    Defendant-Appellee Wasoka.

  John E. Brady and Brendan P. Donahue of Brady & Callahan, P.C.,
    Springfield, for  Defendant-Appellee Cerdeira.

  PRESENT:  Amestoy, C.J., (FN1) Dooley, Johnson, Skoglund and Reiber, JJ.

        
       ¶  1.  JOHNSON, J.   Progressive Insurance Company appeals from a
  denial of its motion for summary judgment against its insured, Gregory
  Wasoka, for fraud in the inducement of an automobile insurance policy. 
  Progressive claims on appeal that the trial court misunderstood its motion
  for summary judgment and erroneously dismissed the entire case when
  Progressive had filed its motion based on only one of its claims. 
  Progressive contends the trial court also erred by treating Wasoka's
  response as a cross-motion for summary judgment, which it claims raised new
  matters, without giving Progressive thirty days to respond.  We affirm
  because we agree the motion asked the court to void the policy for fraud in
  the inducement as evidenced by Wasoka's noncooperation, defendant's
  response was directly related to fraud in the inducement, and the court's
  decision nineteen days later indicated that the undisputed facts did not
  show that Progressive was entitled to judgment on this issue.  As a result,
  no further issues were left and the complaint was dismissed.  Moreover, if
  there was prejudice as a result of the procedure the trial court followed,
  Progressive failed to come forward with any evidence of it, other than the
  unsubstantiated claims of counsel, despite filing two post-judgment
  motions.   

       ¶  2.  The agreed facts are as follows.  In July 2000, Gregory Wasoka
  purchased a Vermont automobile insurance policy from agent Steve Shortle of
  C.G. McCullough Insurance Agency, Inc., of Killington, Vermont.  In May
  2001, Wasoka was involved in an automobile/bike accident in Connecticut
  with Robert Cerdeira.  After informing Progressive of the accident, Wasoka
  agreed to be interviewed by Progressive agents on May 10, 2001 and May 22,
  2001 respectively as part of the investigation.  Progressive made no
  request that either of these first two interviews be given under oath.  In
  a letter dated August 15, 2001, Progressive requested that Wasoka submit to
  a third interview, this time under oath.  Wasoka received the letter but
  did not reply.  In August 2002, Wasoka submitted to deposition by
  Progressive's counsel.  
   
       ¶  3.  In the course of investigating the accident, Progressive
  learned the following uncontested facts that it submitted for consideration
  with its motion: (1) at the time of the accident, Wasoka was a student at
  Naugatuck Valley Community College in Connecticut, (2) at the time of both
  of the May 2001 investigatory interviews Wasoka was staying with his
  parents in Connecticut, (3) at the time of the second interview Wasoka was
  employed by Gary Industries in Connecticut, and (4) while Wasoka received
  limited mail at his brother's residence in Killington, Vermont, including
  his Progressive insurance bills, he received mail at his parent's house in
  Connecticut. (FN2)
        
       ¶  4.  Additionally, the following facts were submitted by Wasoka in
  the course of the investigation and deposition.  During his second May
  interview, Wasoka stated he worked at the Killington Ski Resort in the fall
  and winter of 2000 while staying at his brother's condo in Killington.  In
  August, 2002, Wasoka testified in deposition that he lived in four
  different places at the time he purchased his insurance policy including
  his brother's residence in Killington, Vermont, his grandmother's cottage
  on Lake Bomoseen in Vermont, a friend's house in Winchester, New Hampshire,
  and his parent's house in Connecticut.  Wasoka also testified in deposition
  that all that was required to obtain his Vermont insurance policy was his
  Vermont driver's license and a mailing address.  He testified that he had
  known agent Shortle all his life as a family friend and that Shortle was
  aware, from conversations with Wasoka's father, that Wasoka traveled
  between many different places when he purchased the policy.
   
       ¶  5.  Progressive filed suit against Wasoka and Cerdeira in January
  2002 seeking a declaratory judgment that Wasoka's insurance contract "is
  void ab initio due to [Wasoka's] fraudulent representations, and that there
  is no coverage under its policy for any claims arising out of the incident
  with Mr. Cerdeira due to Mr. Wasoka's failure to cooperate with Progressive
  and misrepresentations made in the course of presenting his claim."  The
  contract contains the following cooperation clause: "[a] person claiming
  coverage under this policy must . . . allow us to take signed or recorded
  statements, including statements under oath, and answer all reasonable
  questions we may ask, when and as often as we may reasonably require."  

       ¶  6.  Progressive filed a "Motion for Summary Judgment" on January
  28, 2003, claiming that "[d]efendant deliberately breached a policy
  provision that would have enabled his insurer to investigate the issue of
  fraud in the inducement of the policy, a legal issue that would void
  coverage. . . . By this motion, Plaintiff requests judgment from the court
  that Defendant's breach of contract voids the insurance contract ab
  initio."  The motion goes on to say, some pages later, that Wasoka's
  actions, refusal to submit to an examination under oath and his refusal to
  sign a bilateral reservation of rights/non-waiver agreement,  must be
  viewed as "admissions of fraud in the inducement of the policy, voiding
  coverage ab initio."  At all times, the motion asked the trial court to
  find that the policy was void for fraudulent inducement as evidenced by
  Wasoka's alleged noncooperation.
   
       ¶  7.  By the time Progressive filed the motion for summary
  judgment, it had deposed Wasoka under oath, exactly the result it was
  seeking prior to filing the declaratory judgment action. Not surprisingly,
  Wasoka used this deposition in filing his "Opposition to Summary Judgment"
  to show that, regardless of the circumstantial evidence that Progressive
  sought to rely on for voiding the policy, he had not, in fact, committed
  fraud in the inducement of the insurance policy.  Wasoka devoted five full
  pages to why Progressive had failed to present sufficient evidence of
  residence fraud.  He argued that he had not failed to cooperate under the
  terms of the contract, that Progressive had failed to produce evidence of
  prejudice resulting from his alleged noncooperation as is required under
  Smith v. Nationwide Mutual Insurance Co., 2003 VT 61, ¶ 10, 175 Vt. 355,