United States District Court, S.D. Mississippi, Southern Division
WALTER THOMAS, JR. PLAINTIFF
ALLSTATE VEHICLE & PROPERTY INSURANCE COMPANY, ET AL. DEFENDANTS
MEMORANDUM OPINION AND ORDER GRANTING MOTION FOR
GUIROLA, JR. U.S. DISTRICT JUDGE
THE COURT is the  Motion for Summary Judgment filed by
Defendant Allstate Vehicle and Property Insurance Company.
Allstate argues it is entitled to summary judgment because
there is no question of material fact that Plaintiff Walter
Neil Thomas, Jr., failed to cooperate in Allstate's
investigation of the fire causing a loss at Thomas'
insured premises. Thomas has responded in opposition, and
Allstate has replied. After due consideration of the
submissions and the relevant law, it is the Court's
opinion that Allstate has shown there is no question of
material fact for the jury, and that Mississippi law compels
judgment in its favor. Accordingly, the Motion for Summary
Judgment will be granted and Thomas' claims dismissed.
alleges that he applied for and purchased the Allstate
insurance policy at issue in this case in January, 2016.
(Compl. Ex. B, ECF No. 1-2). Shortly after the policy became
effective on January 12, 2016, Thomas arrived at the insured
property and discovered the front door open with a broken
window, and water spreading throughout the property.
(Id. at 3). He called a plumber and the Jackson
County Sheriff's Office to report the apparent break-in.
When he and the plumber climbed into the attic, they
discovered that something had caught fire. (Id.).
The fire caused more than $40, 000 in damage to the property.
made a claim for payment under the policy, which Allstate
denied by letter dated July 13, 2016. (Notice of Removal Ex.
2, ECF No. 1-3). The reasons for denial were:
It is Allstate's position that the circumstances
surround[ing] the fire are suspicious as incendiary in
origin, and that there are questions concerning the
circumstances surrounding the procurement of the coverage for
the property in question. It is Allstate's position that
you have failed to cooperate with its investigation [of] the
claim, both in refusing to submit to an examination under
oath in the matter, [and] failing/refusing to produce
documentation requested related to Allstate's
investigation of the claim.
(Id. at 1).
filed this lawsuit in Jackson County Circuit Court, alleging
that Allstate and the insurance agent breached the insurance
contract and acted in bad faith by refusing to pay for the
fire damage. Allstate removed the case to this Court.
Subsequently, this Court denied Thomas' Motion to Strike
and/or Remand, and dismissed Thomas' claims against the
insurance agent. (See Order, ECF No. 15).
Allstate's Motion for Summary Judgment requests that all
of Thomas' remaining claims be dismissed.
states that the insured property was a house he had just
finished building with his two partners and listed for sale.
It was unoccupied at the time of the fire, and there is no
dispute that the cause of the fire was arson. (Def. Mot. Ex.
3, at 4, ECF No. 25-3). Thomas contends that the arson was
the act of a vandal, while Allstate wished to conduct an
investigation into Thomas' financial circumstances to
determine if he had a motive to commit arson. Thomas argues
that he provided two recorded statements to Allstate, and
each of Thomas' partners provided statements as well.
Thomas refused, however, to execute an authorization form
allowing Allstate to obtain information about him from third
parties such as employers, mortgagees, banks, credit bureaus,
insurance companies, the IRS, and the police. Thomas believed
this authorization was unreasonably intrusive and broad.
Thomas did agree to make a statement under oath, until he was
required to bring personal financial records, records of
payments made for construction of the property, federal and
state income tax records, credit card and bank statements, a
full financial statement, and personal cell phone records for
a month prior to the fire and forty-eight hours after. (Def.
Mot. Ex. 6, ECF No. 25-6). At that point, Thomas' counsel
threatened a lawsuit for bad faith. (Def. Mot. Ex. 7, ECF No.
25-7). Counsel advised that “Mr. Thomas will not be
giving a further statement due to the excessive conditions
for same demanded from the underwriter. He will be available
for deposition after suit is filed.” (Def. Mot. Ex. 9,
ECF No. 25-9). After two letters reiterating Allstate's
desire to obtain the requested documentation from Thomas and
complete its investigation, counsel advised Allstate that
Thomas would provide an affidavit attesting to the statement
he had already given to Allstate, but nothing more. (Def.
Mot. Ex. 10, 11, 12, ECF Nos. 25-10, 25-11, 25-12). Shortly
thereafter, Allstate formally denied the claim. (Def. Mot.
Ex. 13, ECF No. 25-13).
insurance policy provision at issue required Thomas to
“give [Allstate] all accounting records, bills,
invoices and other vouchers or certified copies which we may
reasonably request to examine and permit us to make
copies.” (Def. Mot. Ex. 2, at 27, ECF No. 25-2) (ECF
pagination). Additionally, Thomas was required to submit to
examination under oath as often as Allstate reasonably
required. (Id.). Failure to comply subjected Thomas
to the possibility of denial of coverage if the failure was
prejudicial to Allstate. (Id.). Allstate contends
that Thomas' refusal to comply with the insurance policy
terms was prejudicial because it was unable to complete its
contends that Allstate has no reason to suspect him of
setting the fire because he “had no debt on the
property, [ ] the property had been on the market for a very
short period of time, and [ ] the repairs were paid for
quickly (by the insured out-of-pocket) and with the home
returned to the market and sold without gain.” (Pl.
Resp. Mem. 3, ECF No. 27). Thomas argues that Allstate cannot
explain why it still needs to see his personal and financial
records when he is not suspected of arson. (Id.).
Further, Thomas contends that Allstate is not proceeding in
good faith because it has not taken him up on his offer of a
deposition after this lawsuit was filed. He argues that the
reasonableness of Allstate's documentation requirements
is a jury issue that cannot be determined on summary
McPhail v. State Farm Fire and Casualty Company, 992
F.2d 325 (5th Cir. 1993), the Fifth Circuit applied
Mississippi law to similar arguments in the context of a fire
loss. The policy language was also similar, in that it
required the insured to “provide us with records and
documents we request and permit us to make copies, ”
“as often as we reasonably require.”
McPhail, 992 F.2d at *1. The plaintiff argued that
his refusal to provide requested financial documents was
reasonable, he had substantially complied with the policy
terms, and a jury should “decide the reasonableness of
his refusal and the effect of his compliance.”
Id., at *2. The court rejected all of these
arguments, first noting that with regard to insurance
investigations, the Mississippi Supreme Court takes a broad
view of materiality. Id. The court then held that
“[w]hether the requests are material is a question of
law for the court, not a jury, to determine.”
Id. at *3. Finally, the court noted well-established
Mississippi law that “[i]nformation about the financial
condition of an insured is pertinent to an insurance
investigation probing the possibility of arson.”
Id. The court held that the request for credit card,
bank account, real property, and loan application records was
“reasonable, as they all were related to determining
whether McPhail's financial status might have provided
him with a motive for committing arson.” Id.
recently, the Mississippi Court of Appeals stated that
“[t]he law in Mississippi is clear that an insurance
policy is rendered void by the insured's failure to
submit to an examination under oath. Furthermore, an
insured's failure to provide financial information
constitutes a material breach of the insurance contract and
also voids coverage.” Mullen v. Miss. Farm Bureau
Cas. Ins. Co., 98 So.3d 1082, 1087 (Miss. Ct. App. 2012)
(citations omitted). However, the court held that these
principles apply where there is a willful refusal to
comply with the policy provisions, not when the insured had
complied and indicated willingness to continue to comply with
the policy provisions. Id. at 1089. In
Mullen, the insured requested policy language and
case law before submitting to an ...