The steering wheel had been tied to keep the motor home driving straight, and a pole had been wedged against the accelerator.

The motor home was insured under a motor home policy issued by Progressive Casualty Insurance Company. The policy included comprehensive coverage with an agreed value of $63,000 and a zero deductible.

After communication with the local sheriff's office, Progressive assigned investigation of the claim to Rita Sharma, a member of Progressive's special investigations unit.

As part of its investigation, Progressive obtained cell phone records from phones belonging to Mr. Young; his wife, Anna Young; and his son, John Young III. These records showed that on November 10, 2014, at 4:03 a.m., the cell phone belonging to Mr. Young's son used the cell phone tower that was the closest to the canal where the motor home had been recovered.

Both Mr. Young and his son participated in examinations under oath administered by Progressive as part of its investigation into Mr. Young's theft claim. Mr. Young stated that he believed his son's cell phone was in the vicinity of the canal because it had been inadvertently left for the weekend in a truck belonging to Mr. Young's customer, Ed Amaral.

Mr. Young's son, however, testified that he did not have any reason to believe he did not have his phone during that time, and also that he could not think of anyone else who would have made calls from his cell phone during that time.

Subsequent analysis of cell phone records revealed that Mr. Young's son's cell phone was used on November 7, 8, 9, and 10 in Modesto, California, and near Mr. Young's home in Ceres, California.

On July 9, 2015, Progressive denied coverage for the claim, contending that Mr. Young had made material misrepresentations during the investigation of the reported theft claim.

Mr. Young sued the insurer for breach of contract.

Progressive moved for summary judgment, arguing that Mr. Young had made a material misrepresentation regarding the theft claim – namely, that he lied to Progressive about his son's cell phone being in Mr. Amaral's truck during the time the motor home was sunk in the canal – voiding coverage under the policy and negating his breach of contract claim.

The Progressive Policy

The Progressive policy provided:

FRAUD OR MISREPRESENTATION

We may deny coverage for an accident or loss if you or a person seeking coverage has concealed or misrepresented any material fact or circumstance or engaged in fraudulent conduct, in connection with the presentation or settlement of a claim. 

The district court granted the motion.

In its decision, the district court found that Mr. Young had knowingly made a false statement about the location of his son's phone at the time of the alleged theft. As the district court explained, that phone made a call on Monday, November 10, at 4:03 a.m. and used the cell tower nearest the canal where the motor home was found. It pointed out that Mr. Young had stated during his examination under oath that the phone had been left in his customer's truck, but that his son had stated that he had no reason to believe he did not have his phone over the weekend or that anyone else would have made a call from it, and that cell phone records showed the phone repeatedly communicated with cell towers around Mr. Young's son's home throughout the weekend preceding the theft.

Additionally, the district court added, the false statement was material. It reasoned that whether Mr. Young's son was in the vicinity of the sunken motor home at the time of its theft was “directly relevant to establishing that the motor home had indeed been stolen or if it had been intentionally sunk by its owner.” According to the district court, a reasonable insurer “would attach significant importance to that fact in evaluating whether coverage was appropriate.”

The district court concluded that because the “undisputed facts” showed that Mr. Young had misrepresented a material fact during his insurance claim, coverage under the policy was voided, and because coverage was voided, Mr. Young could not succeed on a claim for breach of contract.

The case is Young v. Progressive Cas. Ins. Co., No. 1:16-CV-01198-DWM (E.D. Cal. June 6, 2017).