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Geovera Specialty Insurance Co. v. Odoms

United States District Court, E.D. Louisiana

November 14, 2019


         SECTION M (4)

          ORDER & REASONS


         Before the Court is a motion by plaintiff GeoVera Specialty Insurance Company (“GeoVera”) for summary judgment declaring that: (1) under the homeowners insurance policy's concealment or fraud exclusion, no coverage is owed for a fire; and (2) GeoVera may rescind the policy due to material misrepresentations in the insurance application.[1] Defendant Michael Odoms opposes the motion, [2] and GeoVera replies in further support of the motion.[3] Having consider the parties' memoranda, the record, and the applicable law, the Court finds that GeoVera is entitled to summary judgment.[4]

         I. BACKGROUND

         This matter is a declaratory judgment action concerning the rescission of a homeowners insurance policy. On June 21, 2018, Odoms entered into an agreement to purchase a property located at 6565 Benedict Drive in Marrero, Louisiana.[5] As a result, Odoms contacted Susan Angelica Insurance Agency, LLC (“SAIA”) to procure a tenant-occupied homeowners insurance policy for the property.[6] According to Odoms, SAIA responded to some of the underwriting questions without consulting him when filling out the insurance application.[7] All of the underwriting questions were answered in the negative, including one inquiring whether the “applicant, co-applicant, spouse or domestic partner had or been involved in a … bankruptcy during the past 5 years, ” and one asking if the property was “without public utility services.”[8] Odoms signed the insurance application on June 21, 2018, thus acknowledging that he had “read the above application and any attachments and declare[d] that the information is true and complete” and that the “information [was] being offered to the company as an inducement to issue the policy for which [he was] applying.”[9]

         Based on Odoms's answers to underwriting questions posed in the insurance application, GeoVera issued a tenant-occupied homeowners insurance policy for the Benedict Drive property for the term of June 21, 2018 to June 21, 2019.[10] The policy provided dwelling coverage in the amount of $129, 000, along with coverage limits of $12, 900 for other structures, $6, 450 for personal property, and $12, 900 for loss of use.[11] The policy contains a “concealment or fraud” clause which provides:

1. With respect to loss caused by fire, we do not provide coverage to the “insured” who, whether before or after the 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 insurance.
3. However, if the conduct specified above is in relation to the procurement of the contract or occurs subsequent to the issuance of the contract, but if known to us would have caused us not to issue the policy, coverage will only be denied if the conduct was committed with the intent to deceive.[12]

         On July 21, 2018, the Benedict Drive property was damaged by a fire.[13] Odoms promptly filed a claim with GeoVera.[14] GeoVera required Odoms to provide sworn testimony at two examinations under oath (“EUO”).[15]

         At the December 19, 2018 EUO, Odoms testified that he and his wife, Ericka Odoms (“Ericka”) began dating in 2008 or 2009 and married in October 2013.[16] The examiner asked Odoms questions about several insurance applications he and Ericka made with GeoVera through SAIA, including the one for the Benedict Drive property.[17] The insurance application for a property located at 1929 Watling Drive, which Odoms signed on August 22, 2016, was the first of the series.[18] Odoms testified that he participated in applying for the insurance, SAIA explained the underwriting questions to him, he answered the underwriting questions, and he signed the application.[19] With respect to the bankruptcy question, Odoms testified that he was aware that Ericka was making payments on debts related to a bankruptcy until October 2015, and that answering “no” to the bankruptcy underwriting question was incorrect.[20] Indeed, Odoms acknowledged that the bankruptcy underwriting question was incorrectly answered in the negative on all seven insurance applications that were discussed in the EUO, including the insurance application for the Benedict Drive property.[21] Odoms further testified that he had no reason to believe that SAIA made up the answers to the underwriting questions and that, if he signed the application, he provided the answers to the best of his ability.[22]

         GeoVera also required Ericka to attend an EUO. At her EUO, Ericka testified that Odoms was aware of her bankruptcy.[23] She further testified that the bankruptcy underwriting question was answered incorrectly on all the insurance applications, including the one for the Benedict Drive property.[24]

         On February 26, 2019, GeoVera wrote to Odoms informing him that it “has determined it has no duty to indemnify” Odoms because he submitted false answers to the underwriting questions on the insurance application.[25] GeoVera noted that Odoms and Ericka submitted several insurance applications in which one, or both, of them affirmed that neither of them was “involved in” a bankruptcy proceeding in the previous five years, when in fact, they both knew that Ericka was making payments on a bankruptcy plan until October 2015.[26] Further, GeoVera stated that Odoms falsely represented that the property was connected to public utilities, when in fact, the property did not have water or gas, and the electricity was obtained via an illegal meter attached by the squatters who previously occupied the property.[27] Thus, GeoVera denied coverage under the “concealment or fraud” clause which provides that the insurer does not provide coverage to an insured who made false statements related to the insurance, whether before or after the loss.[28] GeoVera further stated that it would not have issued the policy if Odoms had provided accurate information in the insurance application.[29]

         On March 1, 2019, GeoVera filed this declaratory judgment action against Odoms. GeoVera seeks a declaration: (1) that Odoms provided false information in the insurance application, and (2) allowing rescission of the insurance policy based on the false statements contained in the insurance application.[30]


         GeoVera moves for summary judgment arguing that the undisputed evidence proves that Odoms made materially false statements in his insurance application with respect to the underwriting questions about his wife's bankruptcy and whether the property had public utilities, and that, as a result, GeoVera is entitled to rescind the policy.[31] GeoVera further argues that the false statements are attributable to Odoms, regardless of who completed the application, because Odoms signed the application attesting that the answers were true.[32] GeoVera contends that Odoms's false answers to these two questions materially affected GeoVera's decision to issue the policy because it would not have done so if the questions were answered in the affirmative.[33]

         Odoms opposes the motion arguing that there are disputed issues of fact regarding whether he made any material misrepresentations in the insurance application.[34] Odoms contends that, although he knew that his wife was making payments on a bankruptcy plan until October 2015, he did not believe that constituted involvement with a bankruptcy in the last five years as asked on the application; thus, Odoms says, he did not intend to deceive the insurer.[35]With respect to the utilities underwriting question, Odoms argues that he did not know that the electricity to the property was illegally obtained when he submitted the application, and the underwriting question does not specify that the utilities must be legally obtained in order to answer in the affirmative.[36] Further, Odoms argues that he was entitled to rely on SAIA's expertise in completing the insurance application for him, and SAIA failed to interpret properly the questions and explain them to Odoms.[37]

         III. LAW & ANALYSIS

         A. Summary Judgment Standard

         Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed.R.Civ.P. 56(c)). “Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party will bear the burden of proof at trial.” Id. A party moving for summary judgment bears the initial burden of demonstrating the basis for summary judgment and identifying those portions of the record, discovery, and any affidavits supporting the conclusion that there is no genuine issue of material fact. Id. at 323. If the moving party meets that burden, then the nonmoving party must use evidence cognizable under Rule 56 to demonstrate the existence of a genuine issue of material fact. Id. at 324.

         A genuine issue of material fact exists if a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1996). The substantive law identifies which facts are material. Id. Material facts are not genuinely disputed when a rational trier of fact could not find for the nonmoving party upon a review of the record taken as a whole. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Equal Emp't Opportunity Comm'n v. Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014). “[U]nsubstantiated assertions, ” “conclusory allegations, ” and merely colorable factual bases are insufficient to defeat a motion for summary judgment. See Anderson, 477 U.S. at 249-50; Hopper v. Frank, 16 F.3d 92, 97 (5th Cir. 1994). In ruling on a summary judgment motion, a court may not resolve credibility issues or weigh evidence. See Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008). Furthermore, a court must assess the evidence, review the facts, and draw any appropriate inferences based on the evidence in the light most favorable to the party opposing summary judgment. See Tolan v. Cotton, 572 U.S. 650, 656 (2014); Daniels v. City of Arlington, 246 F.3d 500, 502 (5th Cir. ...

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