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Neidenbach v. Arnica Mutual Insurance Co.

United States Court of Appeals, Eighth Circuit

November 16, 2016

Dale Neidenbach; Kim Neidenbach Plaintiffs-Appellants
v.
Arnica Mutual Insurance Company Defendant-Appellee

          Submitted: September 22, 2016

         Appeal from United States District Court for the Eastern District of Missouri - St. Louis

          Before WOLLMAN, BRIGHT, and KELLY, Circuit Judges.

          KELLY, Circuit Judge.

         Dale and Kim Neidenbach appeal the district court's grant of summary judgment in favor of Amica Mutual Insurance Company (Amica). The Neidenbachs allege that a fire caused significant damage to their house and personal property. They contend that their insurance policy from Amica covered the damage, but that Amica refused to pay the claim. The district court[1] concluded that the insurance policy was void under its terms because the Neidenbachs made material misrepresentations during the claims process. Accordingly, the court granted summary judgment in favor of Amica. We affirm.

         I. Background

         The Neidenbachs were named insureds on a homeowner insurance policy issued by Amica. The effective dates of the policy were May 8, 2012, through May 8, 2013. The policy provided, in part, R. Concealment or Fraud

         We provide coverage to no insureds under this policy if, whether before or after a loss, an insured has:

1. Intentionally concealed or misrepresented any material fact or circumstance;
2. Engaged in fraudulent conduct; or
3. Made false statements; relating to this insurance.

         On October 10, 2012, either one or two fires occurred at the Neidenbachs' property. There was substantial damage to the house and the personal property within. After the fire, the Neidenbachs claimed coverage under the insurance policy. They submitted a Sworn Statement in Proof of Loss (Proof of Loss) to Amica, in which they claimed that their house and garage suffered a total loss. They sought the limits of their policy: $375, 000 in damage to their house and garage, and $262, 500 in damage to their personal property. Attached to the Proof of Loss was an inventory of the Neidenbachs' personal property, which assigned a value to each item allegedly lost in the fire. According to the inventory, the total value of the personal property lost in the fire was over $300, 000, exceeding the policy limit.

         Approximately a year before the fire, the Neidenbachs filed for Chapter 13 bankruptcy. In their bankruptcy petition, the Neidenbachs declared-under penalty of perjury-that they jointly owned only $7, 000 worth of household goods and furnishings, clothing, furs, jewelry, firearms, hobby equipment, and other personal property. The Neidenbachs do not dispute that they did not accumulate $255, 500 worth of personal property between filing the bankruptcy petition and submitting the Proof of Loss.

         In April 2013, before Amica made its final coverage determination, the Neidenbachs filed the present suit in Missouri state court, seeking reimbursement for the fire loss. Amica removed the case to federal court, and asserted a counterclaim for recovery of advances it had made to the Neidenbachs under the policy. After the close of discovery, Amica moved for summary judgment, arguing in part that the insurance policy was void under its "Concealment or Fraud" provision because the Neidenbachs misrepresented the value of their personal property in their Proof of Loss.

         The district court concluded that no reasonable jury would be able to reconcile the difference between the value of the personal property the Neidenbachs reported as lost in the fire and the value of personal property they reported in their bankruptcy petition a year earlier. Accordingly, the court determined that the insurance policy was void as a matter of law, and granted summary judgment to Amica on the Neidenbachs' claims. The Neidenbachs appeal that determination. We have jurisdiction under 28 U.S.C. § 1291.

         II. Discussion

         We review de novo the district court's grant of summary judgment, viewing the evidence in the light most favorable to the nonmovants. Carpenter v. Gage, 686 F.3d 644, 648 (8th Cir. 2012). Summary judgment is appropriate if "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).

         The Neidenbachs argue that the district court erred in granting summary judgment to Amica because there is a genuine issue of material fact as to whether they intentionally made material misrepresentations on their Proof of Loss. In the alternative, they argue that the insurance policy is severable, and that the alleged misrepresentations void only the portion of the policy covering their personal property. The parties agree that Missouri substantive law applies.

         A. Intentional misrepresentation

         The Neidenbachs argue that there is a genuine dispute of material fact as to whether they intentionally misrepresented the value of their personal property in the Proof of Loss. The Neidenbachs reported owning only $7, 000 worth of personal property in their bankruptcy petition. However, in their Proof of Loss, they sought reimbursement of $262, 500 worth of personal property-a difference of $255, 500. As the district court noted, several items listed in the Proof of Loss were not listed in the bankruptcy petition. And many of the items that were listed in the bankruptcy petition were assigned a much higher value in the Proof of Loss than in the petition.

         "[I]n the absence of contrary proof, " a verified bankruptcy petition is assumed to be "a true and accurate representation of [the petitioner's] personal property." Liberty Mut. Fire Ins. Co. v. Scott, 486 F.3d 418, 423 (8th Cir. 2007). Thus, to survive summary judgment, the Neidenbachs were required to produce evidence from which a reasonable jury could find that "the figures [the Neidenbachs] listed in [their] bankruptcy petition were inaccurate, " that "the insurance proof of loss amounts resulted from mistake or were otherwise inadvertent, " or that some other circumstance accounted for the discrepancies between the bankruptcy petition and the Proof of Loss. Id. According to the Neidenbachs, the discrepancies are attributable to three circumstances.

         First, the Neidenbachs contend that they used different methods of valuing their property in the Proof of Loss and the bankruptcy petition. The Neidenbachs state in their affidavits that their bankruptcy attorney instructed them to use the "garage sale value" of their personal property in their bankruptcy petition. For the Proof of Loss, on the other hand, they used the "fair market value" of their personal property. According to the Neidenbachs, the former refers to "what a willing buyer would pay, " while the latter refers to "what a willing buyer would pay AND what a willing seller would sell it for." The Neidenbachs contend that this explanation was sufficient to create a genuine issue of material fact as to whether they intentionally overstated the value of their personal property on the Proof of Loss.

         We disagree. The facts of this case are closely analogous to those of Scott. In Scott, an insured claimed she had lost $93, 077.19 worth of personal property in a fire, less than a year after she listed only $830 worth of personal property in her bankruptcy petition. 486 F.3d at 422. She claimed the discrepancy resulted from the different methods she used to calculate the value of her property: She reported the "actual value" of her property on the bankruptcy petition, and the "replacement cost" of her property on her insurance proof of loss. Id. at 423. Applying Missouri law, we concluded that-even assuming the insured was telling the truth about how she calculated the value of her property-"the vast difference in the two values is still too great to be reconciled based on the record before us." Id. Here, the $255, 500 discrepancy between the Neidenbachs' Proof of Loss and bankruptcy petition is even greater than the $92, 247.19 discrepancy in Scott. And the explanation the Neidenbachs offer is no more plausible than the one offered by the insured in Scott; if anything, the difference between garage sale value and fair market value is likely to ...


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