truth, but was admissible when limited to explaining LaBelle's suspicions.)
. The application for insurance indicated that the Building was occupied. So do the Purzes' proof of claim, which sought $ 6,000 for lost rentals. But both Tom Miller (the investigator for the Chicago Fire Department) and LaBelle found the building apparently unoccupied. The gas and water were off. (A notice plastered on the Building, dated August 11, 1988, promised prompt discontinuation of water.) The tavern on the first floor contained no liquor or other valuable property, the apartments on the upper floors no furniture. Lack of occupancy implies a planned arson -- and also calls the veracity of the application and claim into question.**
. The arsonists had no apparent motive, opening the possibility that they acted for pay.
. The Purzes were exceptionally stingy with information, a reticence that reinforced other suspicions.
All of this gave LaBelle ample reason to inquire further -- to seek telephone records and an interview under oath, to request tax returns and bank records. As LaBelle testified, financial records are forthcoming as a matter of course in insurance investigations. Most of the financial requests were standard in the business. Requests for telephone records are less common, but here were justified.
At trial the Purzes testified that their father had taught them to conduct their business privately. Well and good, but there is a curious inconsistency in the assertion of privacy. First they sat down with LaBelle for interviews, then they clammed up and would furnish nothing of value, and finally (after it was too late) they offered to furnish everything. What happened to their sense of privacy between May and September of 1989? Contrast the approach of Mr. Piro, who opened his business records, authorized his banks to disclose everything, and sat for an examination under oath, objecting only when he though the inquiries too far afield. It may be, as the Purzes say, they suspected from the scope of the demand for information and the cancellation of the policy (on the ground of an increase in risk) that American Alliance was looking for an excuse not to pay. Such a belief does not explain why, by refusing to cooperate, the Purzes would furnish the excuse American Alliance sought; and if it explains their conduct it nonetheless does not justify it.
If the Purzes had followed Piro's course, producing some documents while balking at the request for others, submitting to examination under oath while objecting to questions at the fringe of relevance, this would be a different case. As things stand, American Alliance had solid reasons to investigate, and the Purzes were basically uncooperative. Their disregard of obligations under the cooperation clause prevents collection on the contract of insurance.
The clerk will enter judgment for the defendants.
Frank H. Easterbrook
November 27, 1991
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