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Gwin v. Liberty Mutual Insurance Co.

United States District Court, W.D. Louisiana, Monroe Division

August 17, 2017





         This is a dispute over homeowner's insurance benefits. Defendant Liberty Personal Insurance Company (“Liberty”) issued a homeowner's insurance policy to Plaintiffs Brandon Gwin and Amie Gwin, effective March 12, 2016, to March 12, 2017. However, on July 6, 2016, Liberty rescinded the homeowner's insurance policy for alleged misrepresentations by the Gwins. The Gwins subsequently brought suit against Liberty.

         Pending is Liberty's Motion for Summary Judgment [Doc. No. 12]. For the following reasons, the Motion for Summary Judgment is GRANTED.

         I. Facts and Procedural History

         The Gwins owned a home located at 187 Sonny Road, Monroe, Louisiana. On May 16, 2015, Garrison Property and Casualty Insurance Company (“Garrison”) issued a policy of homeowner's insurance, bearing policy number GAR 01563 68 28 90A, to Brandon Gwin for the Sonny Road home.[1" name="FN1" id= "FN1">1]

         Effective December 16, 2015, Garrison cancelled the policy it issued for non-payment.[2]

         On or about March 10, 2016, record rainfall in the Monroe region caused widespread flooding. The Gwins evacuated their home that day.

         The following day, March 11, 2016, Amie Gwin contacted Garrison about the homeowner's policy to ensure that the Gwins were covered for damage other than flooding. Mrs. Gwin told the representative during the call that the home was flooded or was going to flood. It is undisputed that she was told by a representative that the Garrison policy was cancelled in December 2015. It is also undisputed that she was informed that USAA and all its subsidiaries (including Garrison) were unable to re-write similar coverage on the Sonny Road property because of the “unrepaired damage, ” which was “not cosmetic, ” after Mrs. Gwin had disclosed the current or imminent flooding situation. [Doc. No. 12-1, Exh. 5].

         The same day, Mrs. Gwin called Liberty seeking to obtain a homeowner's insurance policy. As part of the application process, Mrs. Gwin was required to provide certain information. When asked, she knowingly and falsely denied having any homeowner's policy cancelled, declined, or non-renewed in the past year.[3] In fact, she told the representative that her Garrison Policy did not expire until August 31, 2016, which was not true.

         According to Liberty's transcript of the call, Mrs. Gwin also failed to disclose that her home had flooded, even when asked if the area was prone “to flood or earthquakes.” [Doc. No. 12-1, Exh. 8(A) at Liberty-1559].[4] Mrs. Gwin claims that she did disclose this information, but has no evidence other than her recollection. During the call, Mrs. Gwin also denied, despite the known damage from flooding, that she was “doing any sort of construction or remodeling” or that there were any “physical conditions . . .[at the home] that can cause injuries like broken windows, uneven walkways, along those lines[.]” [Doc. No. 12-1, Exh. 8(A), at Liberty-1560].

         After the telephone call, Brandon Gwin electronically signed a written application that also answered “no” to the question whether he had ever had a homeowner's policy cancelled, declined, or non-renewed; denied that the home was “[u]nder construction” or “[u]ndergoing significant renovation or remodeling, ” and denied that there were “any physical conditions . . . in need of repair which clearly present a likelihood for injury[, ]” such as “[p]orch or deck without adequate rails or supports, severely broken walkways, unfenced swimming pools, trampolines, etc.” [Doc. No. 12-1, Exh. 8(A), at Liberty-161; Exh. 1, at 79:10-17, 72:13-73:24 & 78:22-79:9].

         The Liberty application Mr. Gwin signed contained the following warning:

[I]t is agreed that this form and the answers provided by you to questions asked as part of the application process shall be the basis of the contract should a policy be issued. In the event that any material misrepresentations, omissions, concealment of facts and/or incorrect statements are made by or on behalf of the insured during the application process, we may exercise whatever legal remedies may be available to us under the laws and regulations of this state.

[Doc. No. 12-1, Ex. 8(B), at Liberty-162 (emphasis added)].

         Liberty issued homeowner's insurance policy no. H3F-298-106767-70 (“the Policy”) to the Gwins, effective March 12, 2016, to March 12, 2017. The Policy contains a provision on concealment or fraud:

         2. Concealment Or Fraud

         a. Under Section I - Property Coverages,

(1) With respect to loss caused by fire, we do not provide coverage to the “insured” who, whether before or after a loss, has: (a) Intentionally concealed or misrepresented any material fact or circumstance;
(b) Engaged in fraudulent conduct; or
(c) Made false statements relating to this ...

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