United States District Court, N.D. Ohio, Western Division
MEMORANDUM OPINION AND ORDER
R. Knepp II United States Magistrate Judge
December 28, 2015, Plaintiffs Earnest and Georgia Bolton
(“Plaintiffs”) filed a complaint against
Defendant State Farm Fire & Casualty Company
(“Defendant”) in the Lucas County, Ohio Court of
Common Pleas. (Doc. 1-1, at 7-14). The complaint asserts
breach of contract, bad faith, and unfair trade practices.
Id. On January 26, 2016, Defendant removed the case
to this Court. (Doc. 1). Jurisdiction is proper under 28
U.S.C. § 1332. The parties consented to the
undersigned's exercise of jurisdiction in accordance with
28 U.S.C. § 636(c) and Civil Rule 73. (Doc. 15). The
case is before the Court on Defendant's Motion for
Summary Judgment (Doc. 24), to which Plaintiffs responded
(Docs. 27 & 28), and Defendant replied (Doc. 29). For the
reasons stated below, Defendant's motion is granted and
the case is dismissed with prejudice.
case arises out of a residential fire on January 1, 2015.
Plaintiffs owned the residence-a duplex located at 362 Boston
Place, Toledo, Ohio 43610 (“the property”)-and
Defendant supplied an insurance policy. Plaintiffs had owned
the property outright since 2008 when they completed the
terms of a Land Contract. (Earnest Bolton Affidavit, Doc.
27-1, at 1) (hereinafter “Bolton Aff.”).
early morning hours of January 1, 2015, the property caught
fire. (Bolton Aff., Doc. 27-1, at 1).
time of the fire, the property was leased to Monique Davis
and Roy Armstrong, both relatives of Plaintiffs. (Bolton
Aff., Doc. 27-1, at 1). On the evening prior to the
fire (December 31, 2014-New Years' Eve), Plaintiffs
hosted a party for family and friends at their home in Maumee
on Welsford Court. Id. Davis and Armstrong, as well
as their children, planned prior to the party to stay
overnight at Plaintiffs' home in Maumee. Id.
This was because alcohol would be consumed at the party, and
family members anticipated staying up late to ring in the New
were awakened during the early morning hours of January 1,
2015 and informed the property had caught fire. Id.
Following the fire, Plaintiffs made a claim under their
insurance policy with Defendant. Id. at
1-2.; Lonnie Johnson Declaration, Doc. 24-2, at 2
(hereinafter “Johnson Declar.”).
Farm issued Rental Dwelling Policy 95-BL-W652-6 to
Plaintiffs, insuring the property located at 362 Boston
Place, Toledo, Ohio 43610. (Johnson Declar., Doc. 24-2, at
1); (Policy, Doc. 24-3). This Policy had been in place since
approximately 1998. (Bolton Aff., Doc. 27-1, at 1). The
Policy provided conditions, including, inter alia:
2. Your Duties After Loss. In case of a loss
to which this insurance may apply, you shall see that the
following duties are performed:
a. give immediate notice to us or our agent, and in case of
theft, vandalism, or malicious mischief, also to the police;
b. protect the property from further damage or loss, make
reasonable and necessary repairs required to protect the
property, and keep an accurate record of repair expenditures;
c. prepare an inventory of damaged personal property showing
in detail, the quantity, description, actual cash value and
amount of loss. Attach to the inventory all bills receipts
and related documents that substantiate the figures in the
d. as often as we reasonably require:
(1) exhibit the damaged property;
(2) provide us with records and documents we request and
permit us to make copies; and
(3) submit to examinations under oath and subscribe the same;
e. submit to us, within 60 days after the loss, your signed,
sworn proof of loss which sets forth, to the best of your
knowledge and belief:
(1) the time and cause of loss;
(2) interest of the insured and all others in the property
involved and all encumbrances on the property;
(3) other insurance which may cover the loss;
(4) changes in title or occupancy of the property during the
term of this policy;
(5) specifications of any damaged building and detailed
estimates for repair of the damage;
(6) an inventory of damaged personal property described in
(7) records supporting the fair rental value loss.
(Policy, Doc. 24-3, at 7). The Policy also provided
additional duties, including:
3. Duties After Loss. In case of an accident
or occurrence, the insured shall perform the following duties
that apply. You shall cooperate with us in seeing that these
duties are performed:
a. give written notice to our agent as soon as practicable,
which sets forth:
(3) names and addresses of any claimants and available
*** c. at our request, assist in:
(4) securing and giving evidence and obtaining the attendance
(Policy, Doc. 24-3, at 10). Moreover, the Policy provided
that the insured must “comply with the provisions of
this policy” (Policy, Doc. 24-3, at 4), and that
“[n]o action shall be brought unless there has been
compliance with the policy provisions” (Policy, Doc.
24-3, at 7). Finally, the Policy provided certain exclusions,
including that Defendant would not cover loss due to
intentional acts by the insured. (Policy, Doc. 24-3, at 8)
(“If you or any person insured under this policy causes
or procures a loss to property covered under this policy for
the purpose of obtaining insurance benefits, then this policy
is void and we will not pay you or any other insured for this
Plaintiff avers he and his wife never “willfully
refuse[d] to cooperate . . . or in any way attempt[ed] to
hinder or obstruct” Defendant's investigation of
the fire. (Doc. 27-1, at 3).
receiving Plaintiff's claim, Defendant began an
investigation. (Johnson Declar., Doc. 24-2, at 2). Defendant
retained Tom Bensen, an Origin and Cause expert. Id.
Through Bensen's investigation, Defendant discovered an
accelerant (gasoline) was used to start the fire, and
therefore determined the cause of the fire to be arson.
Id. at 3. Defendant's investigation also
revealed that, in its belief, Plaintiffs had some financial
issues which may have been motive for causing the fire.
Id. Defendant noted: 1) Plaintiffs had previously
filed for bankruptcy; 2) the residence occupied by Plaintiffs
at the time of the fire was in foreclosure; and 3) property
taxes on the Property were delinquent at the time of the
Earnest Bolton explains that while Plaintiffs resided at the
Welsford Court residence at the time of the fire, that
residence “had been surrendered through the Bankruptcy
proceeding.” (Doc. 27-1, at 3). Additionally,
Plaintiffs' bankruptcy discharge effective May 14, 2014
granted them a discharge on all debts. (Bolton Aff., Doc.
27-1, at 3). At the time of the fire, Plaintiff had
“very little debt from any source”, and
“minimal other debt” but did owe “the
approximate amount of less than $6, 000” in real estate
taxes on the Property. (Doc. 27-1, at 3).
the results of its initial investigation, Defendant then
deployed its Special Investigative Unit (“SIU”).
Id. That unit determined that several
“indicators of potential fraud were present, including
prior bankruptcies, an incendiary fire, the timing and nature
of the Fire, and current financial problems.”
Id. At that point, Lonnie Johnson, a Claim
Representative with the SIU became involved. Id. at
then sent the first in a series of letters to Plaintiffs at
Johnson's direction. Id. at 3. The January 8,
2015 letter contained a reservation of rights and informed
Plaintiffs that Defendant had questions about the nature of
the fire and whether certain provisions of the policy had
been violated. (Doc. 24-4). That same day Defendant sent
Plaintiffs a letter requesting that they comply with the
“Duties After Loss” provisions of the Policy.
(Doc. 24-5). Upon receipt of a notice of representation from
Plaintiffs' counsel, Defendant sent a reservation of
rights letter to counsel on January 21, 2015. (Doc. 24-6);
(Johnson Declar., Doc. 24-2, at 4).
February 5, 2015, Defendant sent a letter to Plaintiffs'
counsel reiterating questions of coverage, and attempting to
schedule a date and time for Earnest Bolton's recorded
statement. (Doc. 24-7).
March 3, 2015, Johnson took Earnest Bolton's recorded
statement. (Doc. 24-8).
March 5, 2015, Defendant sent a letter to Plaintiffs'
counsel stating Defendant was “continuing its
investigation” and had been “unable to resolve
these questions of coverage.” (Doc. 24-9, at 2). The
letter also noted “There is a question whether there
has been a breach of policy condition ‘Your Duties
After Loss.'” Id. The letter informed
Plaintiffs that Defendant had retained Attorney Michael
Manahan “for the purpose of obtaining Mr. and Mrs.
Bolton's Examination Under Oath” pursuant to the
policy. Id. at 2-3. The letter stated: “You
should be aware that your failure to comply with these policy
duties could be considered a breach of the terms and
conditions of the policy contract and could result in the
denial of any policy benefits that may otherwise be
payable.” Id. at 3. On March 6, 2015, Johnson
called Plaintiffs' counsel to explain the March 5 letter.
(Johnson Declar., Doc. 24-2, at 5).
March 27, 2015, Manahan sent a letter to Plaintiffs, through
counsel, confirming the dates and times for the Examinations
Under Oath. (Doc. 24-10, at 1). Defendant also requested
Plaintiffs “produce the tenants of 362 Boston Place,
Monique Davis, Roy C. Armstrong, Jr., and Earnest Bolton,
Jr., for examination under oath.” Id. The
letter also listed specific documentation Plaintiffs were
requested to bring to the Examinations, including, inter
alia: (1) phone call/text records from landline or
cellular telephones from December 29, 2014 though January 5,
2015; (2) contact information for “any and all persons
that can confirm your whereabouts on the date of loss,
including their current address and phone number”; (3)
copies of local, state, and federal personal income tax
returns for 2011-2013; (4) copies of monthly bank statements
from 2012 to present; (5) any records kept on behalf of any
business in which Plaintiffs are owners or part owners from
2012 to present; and (6) all bankruptcy pleadings for the
past five years. (Doc. 24-10, at 5-7). Finally, the letter
noted: “These requests are conditions of your policy of
insurance. You should be aware that your refusal to cooperate
in the production of documents, answering of questions under
oath, etc., will be considered a breach of the terms and
conditions of the contract of insurance and will result in
the denial of any policy benefits that may be
available.” Id. at 7.
April 22, 2015, Defendant conducted both Plaintiffs'
Examinations Under Oath. See Docs. 24-11 &
24-12; Bolton Aff., Doc. 27-1, at 2.
8, 2015, Manahan wrote Plaintiff's counsel reiterating
Defendant's request for document production, and noting
“[w]hile State Farm thanks your clients for the
documentation that they have produced to date, additional
documentation that State Farm demanded is still
outstanding.” (Doc. 24-14, at 2). The letter listed
specific documentation requested, including: (1) copies of
call/text detail for cell phones in Plaintiffs' names for
December 31, 2014 through January 2, 2015; (2) “[a]ny
and all records relating to the formation of the Bolton Adult
Family Home”, including financial records; (3) copies
of utility bills from January 2014 through January 2015 for
6126 Wellsford [sic] Court, 362 Boston Place, and 1416 North
Cove; (4) call detail from a landline phone number for
December 31, 2014 and January 1, 2015; and (5) copies of
federal, state, and local income tax returns for 2013 and
2014. Id. at 2-4. The letter again stated failure to
produce documentation might result in denial of the claim
based on a breach of the cooperation agreement. Id.
sent a second letter on behalf of Defendant on June 5, 2015,
reasserting the document requests in the May 8, 2015 letter
and extending the deadline for production to June 19, 2015.
(Doc. 24-15). The letter contained similar language noting
failure to comply could result in a denial of the claim for
failure to cooperate. Id. at 5.
avers Plaintiffs “did not produce any documents or
information in response to these requests.” ...