Opinion ID: 1676660
Heading Depth: 2
Heading Rank: 2

Heading: Fraudulent Acts and False Statements

Text: Farm Bureau next argues that the Footes were not entitled to any recovery under the terms of the homeowners policy, due to the allegedly uncontroverted evidence that the Footes committed fraudulent acts and made false statements. Specifically, Farm Bureau contends that the Footes made false statements about (1) their status as owners of the house and their interest in the two watercrafts burned in the fire, and (2) their additional living expenses. Farm Bureau also contends that Gaylon committed a fraudulent act by submitting false receipts as documentation for their claimed additional living expenses. Regarding the first of these points, Farm Bureau introduced the insurance application, signed by Gaylon, reflecting that the Footes had indicated the land was not owned by someone other than the applicants and that there were no occupants on the premises other than the owner. Gaylon testified that when he applied for the insurance policy, he explained the ownership situation to Farm Bureau's agent, Brad Walker, and that Walker then completed the application for insurance. Gaylon testified that he also told this information to Farm Bureau's adjuster, Kent Bard, after the fire. Farm Bureau presented the property inventory completed by the Footes, wherein they claimed a loss of $12,500.00 for the value of the two Polaris watercrafts. It also presented the titles to the watercrafts, showing them to be owned by Charles Hamilton. Gaylon admitted that when he signed the inventory, he understood that he was representing that the items listed were his property. He maintained, however, that he held more than a majority of the ownership interest in the watercrafts. He explained that Hamilton was his partner and that Hamilton's ownership interest was approximately $3,500.00, while the remaining interest was his. Farm Bureau also presented evidence showing that the Footes misrepresented the nature of their interest in the trailer in which they were living after the fire. Farm Bureau questioned Gaylon about a letter that he had written to the insurance company stating that he and Tammy had rented the trailer for $750.00 per month. Gaylon admitted that the information in the letter was wrong, because he and Tammy had actually purchased, not rented, the trailer. Gaylon also admitted that he had a friend write fictitious receipts as proof of the rental fees for the trailer. On rebuttal, Gaylon explained that he presented the false receipts as a result of conversations with Bard, wherein Bard agreed to pay the Footes $700.00 a month for additional living expenses. Gaylon stated that Bard told him that they could live with their parents and still receive $700.00 per month, but that they would still have to furnish receipts for their expenses so that he would have something to put in his file. According to Gaylon, Bard told him: It's your money and we'll pay it to you[.] Bard confirmed the substance of these conversations, testifying that he told the Footes that Farm Bureau would pay additional living expenses even if they were living with their parents and not paying any money. Bard also stated that he told the Footes that they had to have some documentation to justify payment of those living expenses. Whether these actions were fraudulent or the statements were materially false was a question for the jury. This court has recognized that once the insured establishes a prima facie case for recovery under the insurance policies, the burden shifts to the insurer to prove that the damages claimed were not covered under the policy. See Reynolds v. Shelter Mut. Ins. Co., 313 Ark. 145, 852 S.W.2d 799 (1993). The jury was instructed on this issue as follows: Farm Bureau contends that the insurance contract is void because of certain actions and representations of the Plaintiffs. If you find by a preponderance of the evidence, either before or after the loss, there have been fraudulent acts or material false statements made or material facts or circumstances concealed or misrepresented in regard to the insured property, the insured coverage, or the loss by the Plaintiffs, then your verdict must be for the Defendants and against the Plaintiffs. The jury apparently believed the explanations offered by the Footes and concluded that Farm Bureau had not met its burden on this issue. We find no error with this conclusion. The jury is free to believe or disbelieve the testimony of any witness. Bearden v. J.R. Grobmeyer Lumber Co., 331 Ark. 378, 961 S.W.2d 760 (1998). This is true even if the testimony is uncontradicted or unimpeached. See Anderson v. Graham, 332 Ark. 503, 966 S.W.2d 223 (1998).