United States District Court, D. Oregon
C. LAUERSDORF FRANCIS J. MALONEY, III SCOTT A. MACLAREN,
Maloney Lauersdorf & Reiner, PC., ROBERT E.L. BONAPARTE
Shenker & Bonaparte, LLP., Attorneys for Plaintiffs.
E. THENELL KIRSTEN L. CURTIS Thenell Law Group, P.C.,
Attorneys for Defendant.
OPINION AND ORDER
J. BROWN United States District Judge.
matter comes before the Court on Plaintiffs' Motion
(#115) for Partial Summary Judgment as to Defendant's
Affirmative Defense of "Concealment/Fraud." For the
reasons that follow, the Court GRANTS Plaintiff's Motion.
action arises from Defendant Country Mutual Insurance
Company's denial of coverage for a fire-loss claim
submitted by i Plaintiffs Stephen and Rena Muller. The
following facts are taken from the parties'
summary-judgment materials and are undisputed unless
own property in La Grande, Oregon. Plaintiffs live on the
property and also run an automotive machine business in a
large commercial building on the property next to their home.
issued three different insurance policies for
Plaintiffs'' property, which covered damage to
Plaintiffs' home, business structure, business personal
property and equipment, personal property, business income,
November 18, 2012, a fire destroyed the commercial building
and all of its contents. According to Plaintiffs, on the
morning of the fire they left their home around 9:00 a.m. to
visit friends in Klamath Falls for the Thanksgiving holiday.
At approximately 1:15 p.m. while en route, Plaintiffs
received a text message from neighbors that there was a fire
on their property. Plaintiffs turned around and returned to
their home in La Grande. Plaintiffs immediately reported the
loss to Defendant.
November 20, 2012, the Oregon State Fire Marshal's Office
issued an investigation report regarding the fire and
concluded the cause of the fire was "undetermined."
Also on approximately November 20, 2012, Plaintiffs'
claim was referred by Defendant to a Special Investigation
November 21, 2012, Joe Buckley, Defendant's Claim
Representative, conducted a recorded interview of Stephen
Muller. On November 28, 2012, Ryan Fields and Nick Flynn,
Defendant's special investigators, conducted recorded
interviews of both Plaintiffs. On April 5, 2013, an attorney
hired by Defendant conducted an examination of Plaintiffs
under oath regarding the fire. In each instance Plaintiffs
stated they did not know the cause of the fire and that they
were not involved in either setting the fire or conspiring
with another person to set the fire. At Defendant's
reguest, Plaintiffs submitted proof-of-loss documents to
Defendant, including repair estimates for the structure,
business personal property and personal property inventories,
and other supporting documentation regarding their loss from
27, 2013, Defendant's investigator issued an
Investigation Summary regarding the origin of the fire and
its cause. In the Summary Defendant's investigator
In total some 243 intentional ignition scenarios were
considered and virtually all were eliminated except the
intentional act. No accidental cause for the fire was found
during the extensive examination of the structure. . . .
These facts as well as those mentioned above support the
opinion of a fire set intentionally by person(s) unknown.
29, 2013, Defendant issued a Notice of Denial of Coverage
letter to Plaintiffs in which Defendant stated:
[Defendant's] investigation concludes that the November
28, 2012, loss was incendiary and that [Plaintiffs]
intentionally caused and/or conspired to cause the loss.
Additionally, the policy is void when an insured makes a
material misrepresentation. [Plaintiffs']
misrepresentations regarding the cause of the fire and their
financial situations at the time of their recorded statements
and examinations under oath were material to
August 21, 2014, Plaintiffs filed a Complaint in this Court
and alleged claims for breach of contract and tortious
interference with business relationships. On May 29, 2015,
Plaintiffs filed an Amended Complaint in which they allege a
single claim of breach of contract based on (1)
Defendant's failure to pay Plaintiffs' claim and (2)
Defendant's alleged breach of the implied covenant of
good faith and fair dealing when it failed to investigate the
loss properly, to adjust the claim, and to pay Plaintiffs for
the losses they sustained as a result of the fire.
August 7, 2015, Defendant filed an Answer, Defenses, and
Affirmative Defenses to Plaintiffs' First Amended
Complaint. Defendant alleges Plaintiffs' fire claim is
excluded from coverage based on various terms of the
applicable policies. Specifically, ...