Court Opinion

ID: 9472906
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:14:24.784346+00
Date Added: 2024-06-11T17:43:13.296358
License: Public Domain

CLARK, Circuit Judge,
dissenting:
In deciding this case the majority has committed two errors. First, it has failed to recognize that: (1) only a false misrepresentation with the intent to defraud will void coverage; and (2) this issue should have been decided by a jury. Second, by placing undue emphasis on Woods’ statements in his proof of loss, it has allowed it to outweigh an interrogation of Woods by the insurance company, while Woods was under oath. Because summary judgment was inappropriate under these circumstances, I must dissent.
The majority relies on Claflin v. Commonwealth Ins. Co., 110 U.S. 81, 3 S.Ct. 507, 28 L.Ed. 76 (1884), and quotes the following statement: “The fact whether Murphy had an insurable interest in the merchandise covered by the policy was directly in issue between the parties.” Majority Opinion at 1495. In Claflin the jury was allowed to decide this crucial issue after it had been fully litigated at trial. See Claflin v. Commonwealth Ins. Co., 110 U.S. at 85, 3 S.Ct. at 513. Because the majority has permitted summary judgment to stand, Woods has not been given an adequate opportunity to develop the issue just quoted. As I shall demonstrate, the facts of this case disclose that Woods probably did have an insurable interest in the house, since the evidence indicated that he owned it at the time of the fire.1 Foreclos*1498ing Woods’ opportunity to litígate the issue merely because of a misstatement in a proof of loss is summary injustice at its worst.
In Insurance Companies v. Weides, 81 U.S. (14 Wall.) 375, 20 L.Ed. 894 (1871) the Supreme Court indicated that the issue of whether statements made by an insured are false and fraudulent misrepresentations are questions of fact upon which a jury should decide. The Court mentioned:
It is true the policies stipulated that fraud or false swearing on the part of the assured should work a forfeiture of all claim under them. The false swearing referred to is such as may be in the submission of preliminary proofs of loss, or in the examination to which the assured agreed to submit. But it does not inevitably follow from the fact that there was a material discrepancy between the statements made by the plaintiffs under oath in their proofs of loss, and their statements when testifying at the trial that the former were false, so as to justify the court in assuming it, and directing verdicts for the defendants. It is only fraudulent false swearing in furnishing the preliminary proofs, or in the examinations which the insurers have a right to require, that avoids the policies, and it was for the jury to determine whether that swearing was false and fraudulent.
Id. at 382-83 (emphasis added).
Similarly, in American Ins. Co. v. Jass, 22 F.2d 793 (5th Cir.1927), a fire had destroyed a warehouse located in Georgia. Claiming that the policy was void due to the submission of a false affidavit, the insurer declined to pay. The court stated:
Regarding the affidavit of [the plaintiff], while it was in fact inaccurate, there was other evidence tending to show that he *1499was simply mistaken and did not willfully swear falsely. Under the circumstances ... it was not error to submit the case to the jury under proper instructions.
Id. at 794 (emphasis added). See also Camden Fire Ins. Ass’n v. Penick, 2 F.2d 964 (5th Cir.1924) (“We are of opinion that whether the claim was fraudulently or innocently made was a question peculiarly within the province of the jury.”).
Thus, under our cases, the issue of whether the proof of loss was false and fraudulent should have been resolved by the jury. Cases interpreting Georgia law require a similar result. In Casey Enterprises, Inc. v. American Hardware Mutual Insurance Co., 655 F.2d 598 (5th Cir.1981) the court discussed Georgia’s law respecting misstatements in proofs of loss. The court stated:
Under Georgia law misstatements in a proof of loss will not form the basis for a defense against the insured unless the insurer shows that the misstatements were made fraudulently. The district court found no evidence in the record that any of the misstatements in the proof of loss were fraudulent.... Since ... there is no evidence that it contained fraudulent misstatements, the errors in the proof of loss cannot be a basis for voiding the policy.
Id. at 603. Similarly, in American Alliance Ins. Co. v. Pyle, 62 Ga.App. 156, 8 S.E.2d 154 (1940), which is a case cited by the majority, the court commented on misstatements in proofs of loss:
It must appear that these false statements were made willfully and intentionally for the purpose of defrauding the insurer. Such a clause in the policy would not cover misstatements or exaggerated claims of loss or perjury in connection therewith committed by the insured during the trial. Neither would the misstatement by the insured in his sworn statement to the company made shortly after the fire as to the value of some of the property destroyed be covered by such a condition unless it was shown that these misstatements were willfully and intentionally made for the purpose of defrauding the insurer.
Id. 8 S.E.2d at 160. See also Superior Fire Ins. Co. v. Peters, 62 Ga.App. 823, 10 S.E.2d 94, 98 (1940) (“The evidence shows that the plaintiff did not intentionally falsely swear in the proof furnished so as to work a forfeiture of the policy.”).
Even if the statement in the proof of loss was incorrect, the plaintiff had a right to correct the statement before the trial. As pointed out in note one, the insured answered all questions about the transaction between himself and his mother at the deposition. He indicated he had deeded the property to his mother and that there had been no re-conveyance. Thus, assuming that his statement in the proof of loss was inaccurate, he adequately corrected it at the deposition. The Supreme Court has found that an insured may correct a statement made in his proof of loss. See Connecticut Mutual Life Insurance Company v. Schwenk, 94 U.S. (4 Otto) 593, 596, 24 L.Ed. 294 (1876) (“He [the assured] may correct it, [the statement in the proof of loss] though not first at the trial.”); Insurance Company v. Newton, 89 U.S. (22 Wall) 32, 36, 22 L.Ed. 793 (1874); see also Southern States Life Insurance Co. v. Warnock, 145 Ga. 791, 89 S.E. 843 (1916).
It is possible that Woods was not the owner of the property and that his statement in the proof of loss was material, false, and fraudulent. However, the cases instruct us that the jury, not the court, should have been permitted to decide these crucial issues. “Summary judgment should be entered only if ‘there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law.’ ” Impossible Electronics Techniques, Inc. v. Wackenhut Protective Systems, Inc., 669 F.2d 1026, 1030 (5th Cir. Unit B 1982) (emphasis added). The court must not decide any factual issues in the record. Rather, where factual issues are present “the court must deny the motion and proceed to trial.” Id. at 1031.
Because there were material factual issues that should have been fully developed at trial and decided by the jury, I must respectfully dissent.