Court Opinion

ID: 8908118
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:12:02.309555+00
Date Added: 2024-06-11T17:08:18.993848
License: Public Domain

Judge Phillips
dissenting.
An insurance policy being but a special kind of contract, it is fundamental, of course, that an insured must comply with the terms of the policy before he can recover under it, and the validity of this rule is not questioned by plaintiffs’ appeal. What is questioned is whether, as a matter of law, plaintiffs’ policy required them to permit defendant to examine the records of every *218banking and loan transaction that either of them had ever had. This question is not really addressed by the majority opinion, which is based on the tacit premise that the policy obligated plaintiffs to furnish any information requested that is relevant to any issue raised by the pleadings; a premise that the policy language does not support. And contrary to the implication in the opinion, plaintiffs’ case was not dismissed because they refused to produce records that defendant needed in evaluating or defending the claim; it was dismissed because they refused to sign a grossly overbroad authorization that defendant obviously did not need and that plaintiffs had no obligation to sign.
Though defendant argued here that the dismissal is also based on plaintiffs’ refusal to produce various papers requested by it other than those referred to in the refused authorization, this is not borne out by the record. That plaintiffs had no duty to produce any documents at all until defendant made a request is conceded, and the record plainly shows that the only request defendant made that was refused was the request to sign the disputed authorization. The only other request to examine documents that defendant made concerned plaintiffs’ income tax returns and that request was complied with. The authorization that plaintiffs refused to sign was as follows:
Authorization and Releases of Information and Records
I, Cecil K. Chavis and Vickie Chavis, do hereby authorize any representative of all banks and/or any type of lending institution which I have done any business with to consult with and/or deliver to any representative of State Farm Fire and Casualty Company any and all records referred to or requested by any representative of State Farm Fire and Casualty Company.
This the 4th day of December, 1981.
The scope of this authorization is without parallel. It would enable the company to examine every financial statement and loan application that plaintiffs have ever made, every check they have ever written, and every bank deposit they have ever made. Nothing in the policy obligated plaintiffs to sign such an authorization and the dismissal of plaintiffs’ case is clearly without foundation.
*219Plaintiffs’ obligation to produce documents requested by defendant is stated in one sentence of the policy, as follows:
The insured, as often as may be reasonably required, shall exhibit to any person designated by this Company all that remains of any property herein described, and submit to examinations under oath by any person named by this Company, and subscribe the same; and, as often as may be reasonably required, shall produce for examination all books of account, bills, invoices and other vouchers, or certified copies thereof if originals be lost, at such reasonable time and place as may be designated by this Company or its representative, and shall permit extracts and copies thereof to be made.
(Emphasis supplied.) This sentence is about the insured property, and it seems plain to me that the only papers it required plaintiffs to produce at defendant’s request were the “books of account, bills, invoices and other vouchers” that pertain to the insured property. It did not require them to produce all other books of account, bills, invoices and vouchers that they happened to have access to. Nor did it require them to produce papers such as bank and loan company records, which are neither books of account, bills, invoices nor vouchers. “[B]ooks of account, bills, invoices and other vouchers” are documents which tend to show the ownership and cost of properties; which is why, no doubt, the General Assembly phrased the Standard Fire Policy as it did. Requiring that such documents be produced on request when properties covered by them are the subject of a fire insurance claim serves a necessary purpose and makes sense. But requiring insureds to permit insurance companies to examine personal papers that clearly have nothing to do with the insured property and that may only support one of the myriad defenses that can be asserted in such cases makes no sense whatever. Though fishing expeditions of that type can be indulged in through the discovery process, the General Assembly has not required insureds to acquiesce in such expeditions as a condition to enforcing their rights under the policy. If the General Assembly had intended to deprive insureds of their policy benefits if they did not furnish their companies all information requested that might be relevant to the case —which is utterly inconceivable — it would not have used the language that it did.
*220That plaintiffs’ obligation to produce documents is quite limited by the policy terms was apparently recognized by the defendant at one time. In all events, when defendant scheduled plaintiffs’ examinations under oath it directed them to bring to their examination only “a detailed inventory of the items claimed as well as any bills, invoices, receipts and documents that they have to substantiate their loss.'y (Emphasis supplied.) The statement in the opinion indicating that plaintiff was “specifically requested to produce copies of his bank accounts and F.H.A. loan accounts” and that Chavis so testified is inaccurate. The only record basis for this statement is Chavis’ negative answer to a leading question by defense counsel which incorrectly asserted as a fact that such a specific request had been made. While the meaning of Chavis’ testimony on this point may be subject to argument, the meaning of defendant’s letter specifying the papers plaintiffs were to bring to the examination is not. It is in the record, and it does not mention “bank or loan accounts” of any kind.
The record, as I view it, shows that plaintiffs not only met the policy conditions covering disclosure, but went beyond them. They submitted to examination under oath at the time and place defendant suggested. They answered questions not only about the insured property, but about their assets, debts, and earnings. They also answered questions about claims they had made against others and about claims and charges that had been made against them; and they authorized defendant to obtain copies of their state and federal tax returns for each of the preceding five years. The only thing they did not do that defendant requested of them was sign the authorization quoted above. Their refusal was entirely justified, as banking records are neither “books of account, bills, invoices and other vouchers,” and the scope of the authorization was unreasonably broad in any event.