Zip-lipped owner of burned home breached insurance contract, court finds

The right to remain silent may be a mainstay of American jurisprudence but — as a recent appellate opinion attests — it may be costly to exercise that right when your insurance company wants to discuss your burned-down house.  

Homeowner refused to answer questions under oath

Upholding a trial judge, the U.S. Court of Appeals for the Eleventh Circuit said that a man whose homeowner’s policy required him to be examined under oath blew it when he instead sat silent, apparently upset over assertions by an Allstate Insurance lawyer that he had been ducking the interview.

Related: Up in flames: Who gets paid?

According to court filings, Thomas Hutchinson had $163,647 in dwelling coverage and another $114,553 in personal property coverage for his Hogansville home that burned down in 2014. According to a records search, the three-bedroom, one-bath house was built in 1930.   

Doubts policyholder lived at house

Allstate had doubts as to whether the policyholder, Hutchinson, even lived at the house, which an investigator termed “so run down that it was uninhabitable.” But in the end that didn’t matter.

Hutchinson’s “undisputed refusal to answer substantive questions at his examination under oath constitutes a material breach of the insurance policy,” said the unpublished July 10 opinion, issued per curiam by Judges Gerald Tjoflat, Elizabeth Branch and R. Lanier Anderson.

Hutchinson’s offer to sit for another interview more than a year after Allstate denied his claim is also irrelevant, the judges said, since he had already breached his contract.

Hutchinson’s lawyer, David King of Atlanta’s Patel Burkhalter Law Group, said he didn’t have his client’s permission to discuss the case.

Allstate’s attorneys, Marvin Dikeman and Melissa Patton of Webb Zschunke Neary & Dikeman, did not respond to a query on Wednesday.

Sworn statement sought

As detailed in court documents, after Hutchinson’s house burned down, he submitted a claim to Allstate, which launched an investigation, including acquiring his sworn statement.

According to Allstate’s filings, Dikeman requested the interview by mail and by phone, offering to accommodate Hutchinson’s schedule and desired meeting place, to no avail. Eventually Dikeman booked a conference room at a LaGrange hotel and informed Hutchinson that he needed to attend, which he did.

According to transcript of the meeting, after preliminary formalities, Hutchinson objected to the contents of a letter Dikeman had sent him saying Allstate had attempted to schedule the interview on several occasions but that he had not responded.

Related: Misrepresentations about alleged burglary permitted insurer to void policy

“Now this is untrue; I’ve not received a letter,” Hutchinson is quoted as saying. “So I need — before we can move forward, this needs to be recanted. This needs to be corrected. Because I have gone out of my way — and I haven’t been difficult — to cooperate with Allstate regarding any request that has been made, period.”

In response, Dikeman is quoted saying, “Allstate will not recant the truth, sir. I will tell you that I personally spoke to you. I sent the letter. … So Allstate will not recant what it believes to be the truth.”

Verbal sparring

The two sparred verbally, with Hutchinson demanding that the letter be “corrected” before he answered any questions and Dikeman, warning that failure to so could mean the claim’s denial.

“Allstate doesn’t have the ability to force you to do anything,” Dikeman said. “However, you need to understand that, if you fail to respond to the questions that are put to you here today, Allstate will treat that as a material breach of the contract.”

“And that refusal to respond could result — probably will result in the denial of this claim for that reason standing alone,” Dikeman said.

After similar back-and-forth, Dikeman began questioning Hutchinson as to when he bought the house, had the utilities turned on and so forth, with Hutchinson sitting silent.

Hutchinson’s last words before the interview concluded were “I told you before you got started with those questions that, before we can move on, we need to get this corrected. So …”

Allstate denied claim

Allstate denied Hutchinson’s claim. More than a year later, his lawyer sent Allstate a demand letter threatening to sue if the claim were not paid within 60 days, and asserting that Hutchinson would be willing to sit for another sworn interview.

Allstate responded that it would agree to a second interview “expressly subject to a full and complete reservation of rights and defenses by Allstate.”

Hutchinson never offered a date for the second interview, and it never happened.

In 2016, Hutchinson sued the insurer for bad faith and breach of contract in in Fulton County State Court. Allstate had the suit removed to the U.S. District Court for the Northern District of Georgia, where Senior Judge Clarence Cooper dismissed it in January on summary judgment .

Failed to respond to ‘substantive questions’ as required by policy

“Allstate unequivocally invoked its right to examine plaintiff under oath,” wrote Cooper. “While plaintiff technically appeared for the examination under oath, he failed to provide required, material information, with no legal excuse, by not responding to substantive questions. In essence, then, plaintiff did not ‘submit’ to examination under oath, as required by the policy.”

In upholding Cooper, the appellate panel wrote that Hutchinson did not argue that he was excused from answering questions under oath or that such refusal breached his contract.

“Rather,” the opinion said, “Hutchinson contends that his offer to submit to an [examination under oath] over a year after Allstate denied his claim creates an issue of fact regarding his compliance with the contract. We disagree.”

“Hutchinson’s belated offer did not cure his prior breach or reinstate Allstate’s obligation to pay his claim,” the opinion said.

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