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Winbourne v. Wilshire Insurance Co

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

April 18, 2019





         Pending here is Defendant Wilshire Insurance Company9;s (“Wilshire”) Motion for Summary Judgment [Doc. No. 20]. Plaintiffs Terence Winborne[1] (“Winborne”) and David Steve Carroll (“Carroll”) have not filed an opposition.

         For the following reasons, the Court GRANTS Wilshire9;s Motion for Summary Judgment.


         This litigation arises out of a fire that occurred at 213 Newton Street, St. Joseph, Louisiana, on July 19, 2017. Plaintiffs Winborne and Carroll d/b/a The Daiquiri Shack filed suit against Wilshire on August 10');">10');">10');">10');">10');">10');">10');">10, 2018');">8, in the Sixth Judicial District Court for the Parish of Tensas, State of Louisiana. On September 7, 2018');">8, the suit was removed to this Court.

         Plaintiffs seek contractual damages along with bad faith, interest, penalties, and other alleged damages pursuant to a policy of insurance issued by Wilshire covering property that was destroyed by the fire. Wilshire, on the other hand, contends it has no duty to pay Plaintiffs any amount under the policy because Plaintiffs failed to cooperate in the investigation of the claim. Moreover, Wilshire contends it has numerous good faith bases for denial of the claim and is, therefore, not liable for bad faith penalties and interest.

         Wilshire received notice of the loss on July 21, 2017, and retained Brush Country Claims for damage assessment. In addition, SC Fire Consulting ("S.C. Fire") was retained to conduct a fire cause and origin investigation. S.C. Fire conducted a scene inspection on July 24, 2017. [Doc. No. 20-9]. The fire investigator noted that vacancy at the time of the loss was an issue. His report states that the building was vacant and the contents on the interior were minimal and "not sufficient for an operational business." [Doc. No. 20-10');">10');">10');">10');">10');">10');">10');">10, 2');">p. 2');">2');">p. 2].

         The fire investigator also reported to Wilshire that the insured, Winborne, informed him the building was owned by Winborne and Carroll and used as a rental property. Winborne reported that the property had been vacant since April 2017, over a month before the policy was issued on May 15, 2017, and three months prior to the loss, and the prior tenant still owed rent. [Doc. No. 20-10');">10');">10');">10');">10');">10');">10');">10, p. 4');">p. 4].

         On July 25, 2017, SC Fire verbally reported to Wilshire that the fire appeared to have been intentionally set. The investigator noted that the fire had three separate and unconnected areas of origin and appeared to be incendiary in origin, indicative of arson. Samples of debris were taken, which later revealed the presence of ignitable liquid accelerant. The fire investigator9;s written report to Wilshire notes, "The events bringing ignition and fuel together were a person intentionally setting a fire in three separate locations." [Doc. No. 20-10');">10');">10');">10');">10');">10');">10');">10, p. 5].

         Winborne told the investigator that, on the day of the fire, he hired Billy Boyte and Caleb Waller to work in the building. [Doc. No. 20-10');">10');">10');">10');">10');">10');">10');">10, p.4]. Billy Boyte was arrested for arson on August 1, 2017. [Doc. No. 20-8');">8, 2');">p. 2');">2');">p. 2]. Caleb Waller and Winborne were subsequently arrested and charged with conspiracy to commit arson. [Doc. No. 20-2, p. 4');">p. 4].

         In addition to the above report from the fire investigator, Brush Country Claims9; adjuster reported to Wilshire that during his inspection on July 22, 2017, he noticed signs of arson, and noted that the building appeared to be vacant, and the vacancy exclusion may apply. [Doc. No. 20-9, p. 1].

         Wilshire representatives attempted to contact the insureds to obtain statements numerous times, to no avail. Further investigation revealed that Winborne was not listed on the deed for the property. Wilshire then attempted to contact Winborne to obtain documentation proving he was the owner of the property, but Winborne failed to respond. [Doc. No. 20-6, p.1] Subsequently, Wilshire requested that Winborne provide a sworn statement in connection with the claim. [Doc. No. 20-12]. Winborne did not provide the requested information or documentation, nor did he submit a sworn statement. Id.

         When Winborne failed to respond to Wilshire9;s requests for documentation and a recorded statement, Wilshire retained Jeffrey Rapattoni, Esq., of Marshall Dennehey to conduct “Examinations Under Oath.” Rapattoni requested that the insureds appear for Examinations Under Oath via letters that were sent to both Plaintiffs, Winborne and Carroll, via regular mail and certified mail on January 24, 2018');">8; February 16, 2018');">8; March 16, 2018');">8; April 11, 2018');">8. [Doc. No. 20-6] None of the mail was returned as undeliverable. Neither insured responded to the requests for Examinations Under Oath. Id.

         Wilshire learned that an attorney was retained to represent the insureds and Winborne9;s Examination Under Oath was scheduled through the attorney to take place on September 11, 2018');">8, a date mutually convenient and selected by all parties. Id. The examination was cancelled by Winborne9;s attorney and re-scheduled for November 26, 2018');">8. Id. Winborne failed to appear on November 26, 2018');">8. Id. In addition, the second named Plaintiff and insured, Carroll, has never responded to Wilshire9;s requests. Id.

         To date, both Plaintiffs have failed to cooperate in Wilshire9;s efforts to investigate this claim. Wilshire9;s requests and Plaintiffs9; failure to cooperate in the investigation span more than a year.

         Wilshire contends that it has been materially prejudiced by the Plaintiffs9; failure to cooperate and that it has been unable to investigate numerous issues related to the claim such as:

1) whether one or both Plaintiffs have an insurable interest in the property;
2) whether the property was vacant for 60 days prior to the fire, excluding coverage;
3) whether the property was vacant at the time the application was signed, excluding coverage;
4) whether Plaintiffs misrepresented material facts to Wilshire regarding the property at the time of the ...

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