Craig v. State Farm Fire Cslt

• Court: Court of Appeals for the Fifth Circuit
• Decided: July 25, 2005
• Docket: 05-60110
• Status: Unpublished

Opinion

United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT July 25, 2005

Charles R. Fulbruge III Clerk No. 05-60110 Summary Calendar

STEVEN R. CRAIG, Individually and as Next Best Friend and Natural Parent of Steven Craig, a Minor, and Sharon Craig, a Minor; PAMELA S. CRAIG, Individually and as Next Best Friend and Natural Parent of Steven Craig, a Minor, and Sharon Craig, a Minor; STEVEN CRAIG, A Minor; SHARON CRAIG, A Minor,

PlaintiffS-AppellantS,

versus

STATE FARM FIRE AND CASUALTY COMPANY; OTHER UNKNOWN JOHN DOES,

Defendants-Appellees.

-------------------- Appeal from the United States District Court for the Northern District of Mississippi (CA No. 03-CV-400) --------------------

Before DAVIS, SMITH and DENNIS, Circuit Judges

PER CURIAM:*

Plaintiffs Steven and Pamela Craig (“the Craigs”) appeal the

district courts order granting summary judgment for Defendant State

Farm Fire and Casualty Company (“State Farm”). Finding no error,

we affirm the district court’s order.

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. No. 04-10594 -2-

I.

On December 16, 2002, the Craigs submitted a claim to State

Farm regarding a house fire at their residence in Coldwater,

Mississippi. During the investigation of the cause of the fire the

Craigs’ neighbor, Wanda McGrew, contacted State Farm and informed

its agent that the Craigs leased an apartment where they were

storing some of their personal property that they had claimed was

destroyed in the fire. The Craigs had not revealed this apartment

to State Farm. The Craigs do not dispute that they made

misrepresentations to the investigator regarding the existence of

their apartment. On April 14, 2003, State Farm denied the Craigs’

claim on the grounds that they misrepresented and concealed

material facts to State Farm during the investigation of the claim.

After the Craig’s misrepresentation came to light, the

National Insurance Crime Bureau (“NICB”) investigated the alleged

misrepresentations made by the Craigs. The NICB obtained a search

warrant, searched the Craig’s apartment, and found a number of

items that the Craigs alleged had been destroyed in the fire. The

Craigs were arrested and indicted and they pleaded guilty to

conspiracy to commit false pretenses.

State Farm denied the Craigs’ claim for coverage under the

insurance policy on the basis of the following language in the

policy:

Concealment or Fraud. This policy is void as to you and any other

insured, if you or any other insured under this policy has No. 04-10594 -3-

intentionally concealed or misrepresented any material fact or

circumstance relating to this insurance, whether before or afer a

loss.

After their claim was denied the Craigs filed the present

action against State Farm in Mississippi State Court, alleging

breach of the covenant of good faith and fair dealing, tortious

breach of an insurance contract, bad faith denial of an insurance

claim, negligence, and breach of fiduciary duties, malicious

prosecution, negligent and intentional infliction of emotional

distress, and fraudulent inducement. State Farm removed the case

to federal district court on the basis of diversity of citizenship

and moved for summary judgment, which the district court granted.

The Craigs timely appealed.

II.

We review a district court’s grant of summary judgment de

novo, applying the same standard as the district court. Blakely v.

State Farm Mut. Auto Ins. Co., 406 F.3d 747, 750 (5th Cir. 2005).

Under Federal Rule of Civil Procedure 56(c), a party is entitled to

summary judgment when, viewing the evidence in the light most

favorable to the non-moving party, the “pleadings depositions,

answers to the interrogatories, and admissions on file, together

with the affidavits, if any, show that there is not genuine issue

as to any material fact and that the moving party is entitled to

judgment as a matter of law.” Id. at 550-51 (quoting FED. R. CIV.

P. 56(c)). No. 04-10594 -4-

Because this case is before us on the basis of diversity

jurisdiction, we apply Mississippi’s substantive law. Erie R. Co.

v. Tompkins, 304 U.S. 64, 78-79 (1938); Blakely, 406 F.3d. at 751.

Under Mississippi law, for an insurance company may avoid a policy

based on a concealment clause like the one at issue in this case

when it establishes that the insured made statements that were: (1)

false; (2) material; and (3) knowing and willfully made. Clark v.

Aetna Cas. & Sur. Co., 7789 F.2d 242, 245 (5th Cir. 1985).

After a review of the record and the parties briefs we find no

issue as to any material fact that the Craigs knowingly made false

and material misstatements to the State Farm. We therefore affirm

the district court’s grant of summary judgment for State Farm for

essentially the reasons as well-stated in its memorandum opinion

and order.

AFFIRMED.