In Caribe D. Billie v. Plymouth Rock Assurance Corp. et al, the U.S. District Court for the District of Connecticut granted Plymouth Rock Assurance Corp.’s (“Insurer”) motion for summary judgment, holding that the Insurer was prejudiced by its insured’s failure to cooperate with the Policy’s “Duties After Loss” provision.
Background
Caribe D. Billie (“Plaintiff”) purchased a house in Waterbury, Connecticut, and obtained homeowners insurance through the Insurer. Shortly after the Plaintiff purchased the Policy, the house was damaged by a fire. Plaintiff submitted a claim to the Insurer for the damage. Given the suspicious circumstances surrounding the fire – which included this being the Plaintiff’s fourth fire loss claim, the property failing its electrical inspection before the fire, and evidence of vagrant activity in the attic of the house – the Insurer issued a reservation of rights letter and commenced an investigation. The Insurer requested various documents from the Plaintiff to aid in the investigation, including financial records and information related to improvements to the property.
Despite multiple follow-ups over eighteen months, the Plaintiff provided only limited documents through his public adjuster. These documents included a rough property damage estimate, an invoice for emergency response, photographs of fire damage, and partial bank records. Ultimately, the Insurer denied the claim, stating the Plaintiff was uncooperative as he failed to produce the requested and necessary documents.
After the Insurer denied coverage, the Plaintiff, appearing pro se, commenced a lawsuit alleging claims for breach of contract and violations of the Connecticut Unfair Insurance Practices Act (“CUIPA”). The Insurer filed an unopposed motion for summary judgment seeking dismissal of all claims. Of interest here, the court considered the Insurer’s argument that the Plaintiff materially failed to cooperate with the Insurer’s investigation.
The Policy
The Policy contained the following relevant language:
C. Duties After Loss
In case of a loss to covered property, we have no duty to provide coverage under this policy if the failure to comply with the following duties is prejudicial to us. These duties must be performed either by you, an “insured” seeking coverage, or a representative of either: …
5. Cooperate with us in the investigation of a claim; …
7. As often as we reasonably require:
- Show the damaged property;
- Provide us with records and documents we request and permit us to make copies; and
- You, any “insured” and anyone you hire in connection with your claim must:
- Submit to examinations under oath and recorded statements, while not in the presence of any other “insured”; and
- Sign the same.
Representations made by any of the preceding persons who appear in examinations under oath or recorded statements will be deemed to be your representations.
The Policy also stated that no legal action could be brought against the Insurer without full compliance with the duties set forth in the Policy.
Holding
The court held the Insurer was not obligated to pay the Plaintiff’s claim because the Plaintiff failed to comply with the Policy’s “Duties After Loss” provision. Significantly, the court ruled the Plaintiff failed to provide requested records and documents, ultimately prejudicing the Insurer.
The court determined there were no genuine disputes of material fact regarding the Plaintiff’s failure to cooperate. In fact, the Plaintiff acknowledged that he received requests and follow-up requests for documents from the Insurer and its counsel but failed to provide the requested documents, which included bank records for the period requested, credit card records, and tax records.
The court further held that the Plaintiff’s noncompliance was substantial and material as a matter of Connecticut law. In particular, the Plaintiff’s failure to produce the requested documents hindered the Insurer’s investigation into the fire loss claim by preventing the Insurer from assessing potential financial distress and suspicions of arson. As such, the court determined Plaintiff’s failure to send the requested information prejudiced the Insurer in its investigation of Plaintiff’s claim. As a result, the court ruled that the Insurer was relieved of any obligation to pay the insurance claim due to Plaintiff’s breach of the “Duties After Loss” provision.
This ruling underscores the importance of insured parties fully cooperating with their insurers’ investigations. It establishes that insurers may disclaim coverage if the insured fails to provide necessary information, thereby protecting insurers from noncompliance.
