Metro. Prop. & Cas. Ins. Co. v. Calvin, No. 14-1606 (8th Cir. 2015)
Annotate this CaseIn 2006, fire destroyed Calvin’s home. His insurer paid the claim, but indicated that it would not reinsure him. Calvin rebuilt on the same land and applied for a policy through the Mackey Agency. Calvin answered questions posed to him by Eleen Mackey, an employee, who entered the information into a computer. Asked if he had a fire loss within the previous three years, Calvin stated that he had a fire at the same location. Mackey printed the application. Calvin signed without reading it. The “No” box next to the question about prior fire loss was marked, but the blank within the question was not filled in. The space for Calvin's initials is also blank. Metropolitan issued a homeowner’s policy in 2007. Calvin paid the premiums regularly. In 2011, Calvin’s rebuilt home was destroyed by fire while the family was on vacation. Metropolitan’s investigation was inconclusive; no cause could be determined. Metropolitan denied Calvin’s claim and sought a declaratory judgment to void the policy, based on material misrepresentations in the application and the claims process, claiming that Calvin caused the fire to be set. Calvin counterclaimed breach of contract, slander, outrage, and bad faith. The district court determined that Calvin misrepresented his prior loss and that there was no evidence that Metropolitan acted in a dishonest, malicious, or oppressive manner. The Eighth Circuit reversed as to misrepresentation in the application and breach of contract, but affirmed with respect to bad faith and on Metropolitan’s defense of arson claim. Metropolitan can seek rescission of the contract.
Court Description: Shepherd, Author, with Smith and Benton, Circuit Judges] Civil case - Insurance. Under Arkansas law, where an insured signs an application prepared by the insurer's agent and a conflict in the evidence arises as to whether an error on the application was caused by fraud, negligence or mistake of the agent, a question of material fact exists, and the district court erred in granting the insurer's motion for summary judgment; since the court's grant of summary judgment for the insurer on the insured's claim for breach of contract was based on its finding that the policy was void based on misrepresentation, that ruling must also be reversed; the district court did not err in granting the insurer's motion for summary judgment on the insured's counterclaim for bad faith denial; the insured was not entitled to judgment as a matter of law on an arson issue; certain discovery rulings affirmed; the matter is remanded for further proceedings on the insurer's claim for alleged misrepresentation in the insurance application and the insured's claim for breach of contract.
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