United States District Court, S.D. Illinois
ROBERT T. BRUEGGE, Trustee in the Matter of Anthony Clow, Debtor,
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY and METROPOLITAN CASUALTY INSURANCE COMPANY, Defendants. And ANTHONY CLOW, Individually, Plaintiffs,
MEMORANDUM AND ORDER
J. PHIL GILBERT, District Judge.
This matter comes before the Court on the motion for summary judgment filed by defendant Metropolitan Casualty Insurance Company ("MCIC") (Docs. 31 & 32). MCIC seeks summary judgment on Counts III and IV, the only two claims remaining in this case. Plaintiffs Robert T. Bruegge, as trustee of the bankruptcy estate of Anthony Clow, and Clow, individually, have responded to the motion (Docs. 35 & 36).
I. Summary Judgment Standard
Summary judgment must be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Spath v. Hayes Wheels Int'l-Ind., Inc., 211 F.3d 392, 396 (7th Cir. 2000). The reviewing court must construe the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in favor of that party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Chelios v. Heavener, 520 F.3d 678, 685 (7th Cir. 2008); Spath, 211 F.3d at 396.
All parties agree that MCIC issued a homeowners insurance policy number XXXXXXXXX-X ("Policy") to Clow, a resident of Richland County, Illinois. The Policy covered personal property damage and loss due to fire. The Policy limit for personal property loss was $56, 600 and for loss of use was $14, 150. The Policy also contained a condition regarding "concealment or fraud":
If any person defined as you conceals or misrepresents any material fact or circumstance or makes any material false statement or engages in fraudulent conduct affecting any matter relating to this insurance or any loss for which coverage is sought, whether before or after a loss, no coverage is provided under this policy to any person defined as you.
Policy at M-1, ¶ 2 (Doc. 32-1 at 35).
In July 2012, Clow filed a Chapter 7 bankruptcy petition and the required schedules (Case No. 12-60313-lkg) which he swore under penalty of perjury were true and accurate to the best of his knowledge. Attached as part of the petition was a personal property Schedule B listing personal property in the amount of $3, 550, which included $400 in household goods, $200 in clothing, $150 in firearms, a $100 computer, a $50 homemade boat and $50 in tools. Clow claims he arrived at these values with his bankruptcy attorney by estimating "either five or ten cents on the dollar, " Clow Dep. at 40 (Doc. 32-2 at 41), that is, estimating one-tenth or one-twentieth of an item's actual value. Clow claims now that he owned personal property in excess of that listed on his Schedule B and that the representations on the Schedule B were false. In September 2012, the Chapter 7 Trustee reported the estate had $3, 550 in assets and no non-exempt property for distribution to creditors. In November 2012, the Bankruptcy Court discharged Clow's debts of $77, 186. Since the time he filed his bankruptcy petition, Clow was unemployed and had minimal, if any, income.
Several months later and during the Policy period, on January 30, 2013, Clow's rental home burned down and destroyed or damaged the personal property inside. Clow filed a claim with MCIC with a sworn statement that he lost personal property with an actual cash value ("ACV") of roughly $125, 469 in the fire. The statement included an 18-page personal property inventory of the property he claims to have lost, handwritten by Clow and signed on each page, as well as his estimate of the value of each item. The inventory included some personal property he had included in the $950 valuation in his bankruptcy Schedule B (household goods, clothing, firearms, a computer, a boat and tools); the other personal property on his Schedule B was not destroyed by the fire (prepaid rent and automobiles). Pursuant to an MCIC claims adjustor's instructions, Clow obtained the values he listed on the inventory by looking to see the prices on items for sale on the internet ( e.g., e-bay) and in retail stores ( e.g., Wal-Mart). In his search, he did not distinguish between the prices of new or used items. Clow wrote the values in a column labeled for the ACV of the lost property, although he did not understand what "ACV" meant. Clow states that he obtained some items listed in the inventory after his bankruptcy filing by buying them at garage sales or getting them for free from people who were going to throw them away, but he could not identify any specific item obtained in this manner between his bankruptcy filing and the fire. He also stated he owned a substantial number of items on the inventory at the time of his bankruptcy, although he failed to include values for them on the Schedule B in his bankruptcy petition. The items he owned in July 2012 but failed to include in his bankruptcy schedule included furniture, major appliances, a television, a piano, jewelry, tools and other smaller items, not all of which he could specifically remember.
In MCIC's processing of Clow's claim, its claims adjustor prepared a claim summary showing the ACV of property Clow claimed to have lost as approximately $50, 126, and calculating a settlement amount within the policy limits based on that valuation. In the adjustor's analysis, for each item listed by Clow, she took Clow's estimate or researched the price of comparable new items, and subtracted depreciation where appropriate to arrive at an ACV. In essence, she treated Clow's estimates as replacement values and converted them into ACVs. Nevertheless, MCIC declined to cover the loss because it believed that Clow failed to satisfy the "concealment or fraud" condition in the Policy. MCIC believes Clow's statement of the value of his property loss was a misrepresentation of a material fact and/or a materially false statement such that the Policy coverage was voided.
Clow and the Chapter 7 Trustee in his bankruptcy case filed this lawsuit bringing causes of action for breach of the insurance contract and for unreasonable failure to pay an insurance claim in violation of 215 ILCS 5/155(1). They seek $70, 150, close to the total policy limits for personal property loss and loss of use. Relying on Clow's sworn statement of the value of his personal property in his Schedule B, which was substantially lower than his sworn statement of the value of his personal property in his insurance claim, MCIC asks the Court to ...