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Fitzgerald v. Mfa Mutual Insurance Co.

OPINION FILED JUNE 14, 1985.

REGINALD FITZGERALD, PLAINTIFF-APPELLANT,

v.

MFA MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of St. Clair County; the Hon. Richard Goldenhersh, Judge, presiding.

JUSTICE WELCH DELIVERED THE OPINION OF THE COURT:

Rehearing denied July 15, 1985.

Plaintiff, Reginald Fitzgerald, filed a two-count complaint against defendant, MFA Mutual Insurance Company (MFA), alleging, in count I, breach of a fire insurance policy and, in count II, breach of duty of good faith and fair dealing. At the close of the case, on the motion of defendant, the circuit court of St. Clair County directed verdicts on both counts. Plaintiff appeals the directed verdict on the first count. We reverse.

Mr. Fitzgerald owned a home located at 1115 St. Patrick in Cahokia. The residence was insured by MFA under MFA's policy No. 12-7-795036. The policy provided the following coverage: $50,400 for the dwelling itself, $25,200 for personal property, and $10,080 for additional temporary living expenses.

On September 27, 1980, the Fitzgeralds left their home for the weekend and went to visit relatives in Arkansas. In the early morning hours of September 29, 1980, there was a loud explosion in the residence. The residence burned and was partially destroyed. It was when the Fitzgeralds returned home from Arkansas in the late afternoon of September 29, 1980, that they first learned of the fire.

Upon their return from Arkansas, Mr. and Mrs. Fitzgerald made a brief inspection of the house. Although the fire itself was confined to the kitchen and dining room areas, there was extensive smoke and water damage throughout the house. They failed to conduct a detailed inventory at that time because Mr. Fitzgerald believed the premises were dangerous. It was also discovered from a neighbor that there was a problem with people coming into the yard and attempting to go inside the house.

Several days later Mr. Fitzgerald made another inspection of the property. The Fitzgeralds never returned to live on the premises, and they left all their personal property there. They took no steps to repair the damage to the house, and it has remained open to the elements since the fire.

Mr. and Mrs. Fitzgerald obtained proof of loss forms from MFA. However, they did not understand the forms and requested help. They received none. They eventually resorted to using a department store catalog to help them price some of the articles they lost and completed the proof-of-loss forms.

In December of 1980, Mr. and Mrs. Fitzgerald were asked to give a sworn statement to the insurance company. This sworn statement was conducted by two representatives from MFA and consisted of three to four hours of questions each for both Mr. and Mrs. Fitzgerald. The transcribed questions and answers consisted of over 100 pages of typing for each statement.

In a letter dated December 17, 1980, MFA informed Mr. Fitzgerald that because of what they deemed to be material misrepresentation of fact in connection with the presentation of the claim, they were denying coverage under the following provision contained in the policy:

"This entire policy shall be void if, whether before or after a loss, the insured has willfully concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto."

On January 2, 1981, Mr. Fitzgerald filed his complaint. The case was tried before a jury commencing on August 23, 1983. The following facts were adduced at trial:

Mr. Fitzgerald had sold the house two years before the fire for the sum of $34,000. However, because of a title defect that sale was not completed. An estimate of the costs of repair made almost three years after the fire totaled $38,615. However, Mr. Fitzgerald claimed damage to the dwelling in the amount of $50,400, the full extent of the policy coverage.

Regarding the personal property in the proof of loss, plaintiff included every item of personal property supposedly contained in the dwelling. He admitted at trial that in determining original cost he and his wife, with help from his mother, had used a large department store's catalog and ...


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