USCA4 Appeal: 22-2291 Doc: 33 Filed: 01/07/2025 Pg: 1 of 19
UNPUBLISHED
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 22-2291
RAY LEWIS HALE,
Plaintiff - Appellant,
v.
STATE FARM FIRE & CASUALTY CO.,
Defendant - Appellee.
Appeal from the United States District Court for the Western District of Virginia, at Abingdon. James P. Jones, Senior District Judge. (1:21-cv-00049-JPJ-PMS)
Submitted: October 10, 2024 Decided: January 7, 2025
Before RICHARDSON and HEYTENS, Circuit Judges, and TRAXLER, Senior Circuit Judge.
Vacated and remanded by unpublished per curiam opinion.
ON BRIEF: Michael A. Bragg, BRAGG LAW, Abingdon, Virginia, for Appellant. Guy M. Harbert, III, Monica T. Monday, David R. Berry, GENTRY LOCKE, Roanoke, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit. USCA4 Appeal: 22-2291 Doc: 33 Filed: 01/07/2025 Pg: 2 of 19
PER CURIAM:
After his house was destroyed by fire in 2018, appellant Ray Hale filed claims for
loss of the house and contents with his insurer, respondent State Farm Fire and Casualty
Company. State Farm ultimately paid Hale a total of approximately $224,000 for his losses.
Hale subsequently filed a breach-of-contract action against State Farm, alleging that the
payments he received were insufficient and did not satisfy State Farm’s obligations under
the policy. 1 The district court granted summary judgment in favor of State Farm, and Hale
appeals. We vacate and remand for further proceedings.
I.
The State Farm policy at issue in this case provided fire-loss coverage for Hale’s
dwelling and personal property. The dwelling is addressed in Coverage A of the policy,
and personal property is addressed in Coverage B.
As to the dwelling, the policy provided coverage of approximately $400,000 for
“the cost to repair or replace with similar construction and for the same use.” J.A. 27. 2 The
policy explained, however, that “until actual repair or replacement is completed, we will
pay only the actual cash value at the time of the loss.” J.A. 27. The policy also provided
replacement-cost coverage for personal property located in the dwelling. As with the
1 Hale filed this action in Virginia state court. Because the parties are diverse, State Farm removed the case to federal court. See 28 U.S.C. §§ 1332, 1441. 2 The declarations page of the policy shows a coverage limit for the dwelling of $398,200, see J.A. 14, which was later adjusted for inflation in accordance with the policy terms, see J.A. 23.
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dwelling coverage, the policy required that the property actually be repaired or replaced;
otherwise, State Farm was obligated to “pay only the cost to repair or replace less
depreciation.” J.A. 28.
The policy imposes certain duties on the insured, including payment of premiums
and prompt notification to State Farm of covered losses. As to claims for loss to personal
property, the policy requires the insured to “prepare an inventory of damaged . . . personal
property. Show in detail the quantity, description, age, replacement cost and amount of
loss. Attach to the inventory all bills, receipts and related documents that substantiate the
figures in the inventory.” J.A. 29. The policy requires that any lawsuit against it “must be
started within two years after the date of loss or damage,” and prohibits the insured from
commencing an action “unless there has been compliance with the policy provisions.” J.A.
30.
II.
Hale’s home in Abingdon, Virginia, was destroyed by fire on November 24, 2018.
Hale notified State Farm within hours of the fire. On November 28, State Farm sent Hale
a letter explaining the coverage available to him under the policy. Consistent with the terms
of the policy, the letter explained that his claims would be paid based on the “actual cash
value” of the property and that additional “replacement cost benefits” were available for
property that Hale actually repaired or replaced, so long as the repair or replacement was
done by November 24, 2020—two years after the fire. J.A. 83, 84. The letter asked Hale
to provide an inventory of his personal property losses and include “all bills, receipts and
related documents that substantiate [the] inventory.” J.A. 84.
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Robin Dye, Hale’s adult daughter, submitted personal property inventories on
behalf of her father on three occasions. The first inventory, submitted on November 28,
2018, included more than 200 entries 3 for items with an estimated worth of approximately
$181,000. See J.A. 86-98; Brief of Respondent at 5. Dye submitted an updated inventory
on December 8, 2018, which deleted some items and added a few items that had been
omitted from the first. See J.A. 99-111. Dye submitted the last inventory on February 8,
2019. That version included 215 entries for items with a total value of approximately
$168,000. See J.A. 121-33; Brief of Respondent at 5. Dye was able to provide State Farm
with some pictures showing the interior of the home and some of its contents. The
inventories otherwise included no receipts or other documentation; as Dye explained in an
email to State Farm, whatever might have existed was destroyed in the fire. See J.A. 99.
Some of the entries in Dye’s inventories included fairly specific descriptions of the
lost property, but many entries used vague and general terms, with few details to help
establish value. For example, entries for items from inside the home include family pictures
taken between 1948 and 2018 valued at $5000; $4000 worth of “Willowtree, Home
Interior, Crystal, Jesus Figurines, What Nots,” J.A. 125; and “Real Crystal and Star of
David Items Probably 100 pieces,” with an estimated value of $5000, J.A. 125. Entries for
outdoor décor items include “Jesus,” valued at $500, and “[a]nimals in rocks,” valued at
$100. J.A. 131. The inventories also included a Rolex watch given to Hale by his brother,
who died sometime before the fire. Dye herself had never even seen the watch because
3 Many of the inventory entries include more than one item.
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Hale put it away as soon as he received it and never wore it. Dye arrived at the value by
showing Hale pictures of Rolex watches until they found one that he believed was similar
to his watch. See J.A. 193-200. In the first two inventories, Dye valued the Rolex at
$50,000. See J.A. 97, 110. In the final inventory, she listed its value as $5,000. See J.A.
131. Dye explained that the extra zero in the first two inventories was a typo. See J.A. 192.
Consistent with its rights under the policy, State Farm interviewed Hale under oath
on April 18, 2019. Dye also participated in the interview and agreed to be placed under
oath. The interview focused primarily on the accuracy and completeness of the personal
property inventory. During the course of the interview, Hale (and Dye) acknowledged that
there were errors in the inventory and that some of the valuations were purely speculative.
They also indicated that some items had not been included, but Hale said that he was not
asking State Farm to pay for those items and declined to supplement the inventory. 4
After the interview, State Farm had several conversations with Hale’s attorney about
the claims. On October 9, 2019, State Farm met with Hale’s attorney and offered to pay
what State Farm believed was the actual cash value of Hale’s home and personal property.
This offer was formalized in a letter dated October 25, 2019.
4 In the recorded interview, Dye asked if Hale should submit an updated inventory to include the omitted items. Hale responded, “Just let those things go. A couple thousand dollars, it ain’t going to hurt one way or the other.” J.A. 201. Counsel for State Farm then explained that if Hale had “additional items of contents” and “wish[ed] to supplement [his] inventory,” he could “do so now or . . . at a later date.” J.A. 201. Hale responded, “I am okay.” J.A. 202. See also J.A. 186-87 (“[T]here’s things in that house will never be replaced and I ain’t going to ask nobody to pay for them.”).
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Neither Hale nor his attorney responded to State Farm’s October 2019 offer,
despite multiple follow-up letters and phone calls. See J.A. 54-56. In April 2020, State
Farm sent Hale’s attorney checks for the cash value of the home and personal property:
$171,021.59 for the actual cash value of the home and $44,058.89 for the actual cash value
of the “undisputed items” of personal property. See J.A. 55, 150. State Farm explained that
Hale was eligible for an additional $127,307.49 in replacement cost benefits if he repaired
or replaced his home, see J.A. 158, and an additional $31,765.50 in replacement cost
benefits if he repaired or replaced the personal property, see J.A. 160, 169. Hale did not
communicate with State Farm after receiving the checks. On July 14, 2020, State Farm sent
a letter to Hale’s attorney explaining that because there had been no activity, Hale’s claim
was being placed “in an inactive status.” J.A. 175.
Hale cashed the $44,058.89 personal-property check in September 2020. His
attorney held on to the check for the dwelling while he attempted to reach a settlement with
the reverse-mortgage holder. On November 24, 2020—exactly two years after the fire—
Hale commenced this litigation by filing a complaint alleging breach of contract. Hale
sought $400,000 in damages, alleging that he was entitled to the replacement cost for his
house and challenging State Farm’s valuation of his personal property. Hale served the
complaint on State Farm a year later, 5 and State Farm removed the action to federal court.
5 See Va. Code Ann. § 8.01-275.1 (providing that service of process is timely if completed within 12 months after filing a complaint).
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In June 2022, State Farm learned through a discovery response that Hale had bought
a house jointly with Dye and her husband. The contract for the sale of the house was signed
on November 2, 2020, and the sale closed on December 1, 2020.
State Farm moved for summary judgment and supported its motion with the
insurance policy and other evidence, including an affidavit from the claims representative
who handled the claim; emails and correspondence between the parties; the inventories
submitted by Dye in support of Hale’s claims; and the transcript of the recorded interview.
Hale did not file a response to the motion.
After a hearing, the district court granted State Farm’s motion for summary
judgment. As to Hale’s claim seeking replacement-cost coverage for the house under
Coverage A, the district court noted that the policy required State Farm to provide
replacement cost coverage only if the repair or replacement of the house was completed
within two years after the fire. Because the policy required that any action against it be
filed within two years after the date of the loss, the replacement had to be complete before
Hale could file suit. The district court therefore concluded that the claim was barred by the
terms of the policy because the fire occurred on November 24, 2018, but Hale did not buy
a new house until December 1, 2020, more than two years later.
As to Hale’s challenge to the amount paid by State Farm for his personal property
under Coverage B, the district court held that Hale was not in compliance with the terms
of the policy because he “failed to substantiate further payments with documentation before
filing suit, despite State Farm’s multiple reminders.” J.A. 229. Because he was not in
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compliance, the district court held that the policy prohibited Hale from filing suit. This
appeal followed.
III.
“We review de novo a district court’s decision to grant summary judgment, applying
the same legal standards as the district court and viewing all facts and reasonable inferences
in the light most favorable to the nonmoving party.” Ballengee v. CBS Broad., Inc., 968
F.3d 344, 349 (4th Cir. 2020). Summary judgment is proper “if the movant shows that 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). In cases where, as here, no response to the motion
was filed, “the moving party must still show that the uncontroverted facts entitle the party
to a judgment as a matter of law.” Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 416 (4th
Cir. 1993) (cleaned up).
A.
Hale contends the district court erred by granting summary judgment against his
claim seeking replacement value for the house under Coverage A of the policy. Hale
concedes that the policy requires replacement of the house to be completed within two
years of the fire, but he argues that Virginia law only requires substantial compliance with
conditions precedent to coverage under a fire insurance policy. Although the sale of the
new house closed more than two years after the fire, Hale signed the contract to purchase
the house on November 2, 2020, less than two years after the fire. Hale therefore contends
that he substantially complied with the two-year requirement and that he is entitled to
pursue his replacement-cost claim against State Farm.
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As Hale contends, it is clear under Virginia law 6 that, “in respect to fire policies,
and in the absence of bad faith, the law requires of an insured only a reasonable and
substantial compliance with the clauses, conditions and warranties of the policy.” Aetna
Cas. & Sur. Co. v. Harris, 239 S.E.2d 84, 88 (Va. 1977); see Dabney v. Augusta Mut. Ins.
Co., 710 S.E.2d 726, 731 (Va. 2011) (“It is well settled that performance of . . . a condition
precedent to coverage . . . requires substantial compliance by the insured.”) (cleaned up).
The district court generally acknowledged the doctrine of substantial compliance, but the
court stated that it “d[id] not find such compliance here” and rejected the argument without
further explication. J.A. 230.
In our view, the information before the court showed the existence of a genuine
issue of fact as to whether Hale substantially complied with the policy’s requirement that
replacement of the dwelling be complete within two years after the fire. See Dabney, 710
S.E.2d at 732 (questions about whether insured substantially complied with the policy’s
requirements generally must “be resolved by a fact finder”; only if the facts and inferences
are “undisputed and certain” may the trial court resolve the issue as a matter of law).
The policy requires that a damaged dwelling actually be replaced within two years
in order to receive replacement-cost benefits, and State Farm explained that provision in
its letter accompanying the settlement checks. See J.A. 158 (explaining that Hale was
6 In this diversity case, “we apply the law of Virginia and its choice of law rules.” Liberty Univ., Inc. v. Citizens Ins. Co. of Am., 792 F.3d 520, 528 (4th Cir. 2015). Virginia courts apply “Virginia substantive insurance law . . . to policies that are delivered to insureds in Virginia.” Id.
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entitled to additional, replacement cost benefits if he “[c]omplete[s] the actual . . .
replacement of the . . . property within two years of the date of loss”). However, State
Farm’s letter also explained that it would “consider paying replacement cost benefits prior
to actual . . . replacement if we determine . . . replacement costs will be incurred because .
. . you present a signed contract acceptable to us.” J.A. 158 (emphasis added). As noted
above, the contract for the sale of the house was executed on November 2, 2020, less than
two years after the date of the fire. Once the contract was signed, Hale and his co-signers
were legally obligated to go forward with the purchase of the house, thus assuring that
replacement costs “will be incurred.” The purchase did in fact proceed, and the transfer of
title was completed within a month after Hale signed the contract. Under these facts, we
believe a jury could reasonably conclude that Hale substantially complied with the
requirement that the house be replaced within two years of the date of the fire. If the jury
finds substantial compliance, then—contrary to State Farm’s argument on appeal—Hale
was in fact eligible for replacement cost benefits at the time he filed his complaint.
Hale also contends that summary judgment was improper because he is entitled to
challenge State Farm’s determination of the actual cash value of the dwelling. We agree.
Homeowners in Virginia are entitled to pursue claims for both actual cash value
payments and replacement cost payments. See Va. Code § 38.2–2119(B) (“Where any
policy of insurance issued or delivered in this Commonwealth pursuant to this chapter
provides for the payment of the full replacement cost of property insured thereunder, the
policy shall permit the insured to assert a claim for the actual cash value of the property
without prejudice to his right to thereafter assert a claim for the difference between the
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actual cash value and the full replacement cost unless a claim for full replacement cost has
been previously resolved.”). The requirement that the replacement of the house be
completed within two years after the fire—the policy provision upon which the district
court grounded its analysis—applies only to claims for replacement-cost benefits. Thus,
even if a jury were to reject Hale’s replacement-cost claim, that would have no bearing on
Hale’s ability to challenge the amount State Farm offered as the actual cash value of the
dwelling.
State Farm paid Hale $171,021.59 as the actual cash value of the dwelling at the
time of the fire. It reached this figure by determining what it would cost to rebuild the house
now ($300,329.08) and then subtracting from that amount depreciation ($106,089.11),
general contractor’s fees ($21,218.38), and the deductible under the policy ($2,000). See
J.A. 157. Hale’s timely complaint alleged that State Farm ignored the estimates he
provided 7 that showed it would cost more than $400,000 to replace the house and that the
amount offered by State Farm does not reflect the actual cash value of the dwelling. The
record before the district court contains competent, admissible evidence supporting these
allegations, including the inventories and valuation estimates given to State Farm by Hale
and his daughter, and Hale’s testimony in his recorded interview reflecting his
disagreement with State Farm’s calculations. See, e.g., Haynes, Executrix v. Glenn, 91
7 State Farm notes in its brief that these estimates are not included in the record. There is no question, however, that the estimates exist and were given to State Farm, as State Farm acknowledged as much in a letter to Hale. See J.A. 140. That is sufficient for our purposes at this stage of the proceedings.
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S.E.2d 433, 436 (Va. 1956) (“It is generally recognized that the opinion testimony of the
owner of property, because of his relationship as owner, is competent and admissible on
the question of the value of such property, regardless of his knowledge of property
values.”) (cleaned up). Because there are questions of fact about the cost to replace the
dwelling and the actual cash value of the dwelling under Coverage A, the district court
erred by granting summary judgment in favor of State Farm. 8
Accordingly, we vacate the district court’s order and remand for further proceedings
on Hale’s claim for replacement-cost benefits and his challenges to State Farm’s
calculation of replacement cost and actual cash value of the dwelling. On remand, the
8 While Hale on remand may pursue his challenge to State Farm’s calculations, we reject his claim that the different language used in Coverage A and Coverage B prohibits State Farm from deducting depreciation when calculating the actual cash value of the house under Coverage A. Coverage A requires State Farm to pay the “actual cash value” of the dwelling, but the policy does not define that phrase. J.A. 27. Coverage B, by contrast, does not use the phrase “actual cash value” at all, and instead provides that State Farm “will pay only the cost to repair or replace less depreciation.” J.A. 28. Because the policy uses different language when describing the company’s liability for payments under Coverage A and Coverage B, the explicit mention of a deduction for depreciation in Coverage B does not mean that Coverage A precludes the deduction of depreciation when calculating the actual cash value of the dwelling. Indeed, “replacement value minus depreciation” is a standard definition of “actual cash value,” particularly in the insurance context. See Va. Code § 38.2-2119(A) (distinguishing between insurance providing coverage for “the actual cash value of the property at the time of loss” and insurance providing coverage for “the cost of repair or replacement of the property . . . within a reasonable time after the loss, and without deduction for depreciation”) (cleaned up); Black’s Law Dictionary (12th ed. 2024) (third definition of “value”) (defining “actual cash value” in the insurance context as “[r]eplacement cost minus normal depreciation and obsolescence”).
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parties are free to assert any other claims or defenses under Coverage A that are not
explicitly resolved in this opinion. 9
B.
Hale also challenges the district court’s rejection of his personal-property claim
under Coverage B of the policy.
The district court held that the policy required an insured to be in compliance before
commencing a lawsuit against State Farm and that Hale had not complied with his
obligations under the policy. The court explained that Hale
failed to substantiate further payments with documentation before filing suit, despite State Farm’s multiple reminders. Thus, because Hale did not fulfill his obligations under the contract, he has not satisfied a condition precedent to filing suit and State Farm is excused from payments it might have owed had Hale complied.
J.A. 229. Hale contends that the policy does not require him to support his personal-
property claim with receipts for each item lost, and he argues that he provided State Farm
with all of the information and detail about the property that he could, given that most of
9 State Farm suggests in its brief that Hale’s replacement-cost claim also fails because he did not timely notify State Farm that he had bought a new house and was seeking replacement cost benefits. The policy provides that notice of a claim for replacement benefits is timely if made “within six months of either: (a) the last date you received an actual cash value payment; or (b) the date of entry of a final order asserting your right to replacement cost settlement; whichever is later.” J.A. 27. It is at least arguable that the conditions of subsection (b) would be met by a jury verdict in favor of Hale on the question of whether signing the purchase contract substantially complied with the two-year time period for replacing the dwelling, which would mean that the notice period remains open. We do not resolve that issue, however, and leave it for resolution on remand, as the question of notice was not addressed by the district court and is addressed only superficially in the briefs before this court.
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his records were destroyed in the fire. Hale thus contends that he substantially complied
with the policy requirements and that the district court erred in rejecting his challenge to
State Farm’s personal property valuation under Coverage B.
For its part, State Farm notes that the policy required Hale to provide inventories of
personal property destroyed in the fire that “[s]how in detail the quality, description, age,
replacement cost and amount of loss” for each item. J.A. 29. According to State Farm,
[t]he issue was not that Hale had no records to substantiate his inventories. The issue was that his inventories themselves were incomplete and inaccurate, and they did not “[s]how in detail the quality, description, age, replacement cost and amount of loss” for each item he listed—as the policy required. Hale knew this, he failed to do anything about it, and then he stonewalled State Farm.
Brief of Respondent at 22-23 (cleaned up). State Farm contends that it carefully sorted
through Hale’s non-compliant inventories and paid Hale “for the substantiated items based
on the documentation and testimony Hale had previously provided during his
examination,” id. at 23, and that it refused to pay Hale for the personal property that was
not properly substantiated. State Farm contends that because it repeatedly sought additional
information from Hale about his personal-property claim and Hale refused to provide it,
Hale was not in compliance with the terms of the policy and his lawsuit was prohibited by
the terms of the policy.
State Farm’s approach to this issue effectively demands strict and perfect
compliance by the insured with regard to the personal-property inventory. If any portion of
the inventory fails to provide sufficient detail and information about an item, State Farm’s
position is that the insured is not in compliance with the policy and cannot bring suit against
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State Farm. Even if the inventory is sufficiently detailed to permit State Farm to make
payments on some of the items, State Farm contends that the insured’s failure to provide
complete information about other items means the insured is in breach of the policy and
cannot sue State Farm at all, not even to challenge the payment amount on the property
that was sufficiently substantiated.
However, as already discussed, Virginia law does not require strict compliance by
the insured with the conditions of a fire insurance policy. Instead, “in respect to fire
policies, and in the absence of bad faith, the law requires of an insured only a reasonable
and substantial compliance with the clauses, conditions and warranties of the policy.”
Aetna, 239 S.E.2d at 88 (emphasis added); see Allstate Ins. Co. v. Charity, 496 S.E.2d 430,
431 (Va. 1998) (“[T]he insured retains the burden to show that the information actually
provided constitutes reasonable and substantial compliance with the requirement that a
proof of loss be submitted to the insurer.”) (emphasis added). The district court recognized
that only substantial compliance was required, but the court nonetheless granted summary
judgment in favor of State Farm because it “d[id] not find such compliance here.” J.A. 230.
In our view, the information before the district court showed the existence of a genuine
question of fact as to whether Hale substantially complied with his obligation to provide a
sufficiently detailed inventory of the personal property lost in the fire.
Hale and his daughter provided State Farm with personal property inventories three
times, and they corrected, updated, and improved the inventory with each submission. State
Farm had pictures showing some of the interior of the house that had been taken by a real
estate agent when the house was listed for sale, as well as pictures of some of the furniture
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and contents that Hale had listed for sale on Facebook Marketplace. Hale and his daughter
also sat for a lengthy interview under oath. They explained that most of the records were
lost in the fire, and they attempted to answer State Farm’s questions with as much detail as
they could.
To be sure, Hale’s inventories were far from perfect, and many of the entries
provided no detail beyond a bare description of the item and an estimated value.
Nonetheless, as State Farm itself argues, portions of the inventories were sufficiently
detailed to permit payment. See Brief of Respondent at 23 (stating that Hale “did, in fact,
substantiate the items he was paid for”); id. at 24 (“State Farm only paid the part of Hale’s
personal property claim that he substantiated.”). Indeed, the inventories and other
information provided by Hale were sufficiently detailed to permit State Farm to determine
value and tender payment for the great majority of the items listed.
Hale’s final personal-property inventory had 215 entries. State Farm’s breakdown
of its Coverage B payment tracks that final inventory, but it omits 27 entries that were
included in Hale’s final inventory and adds 5 entries that were not included in the final
inventory. State Farm’s breakdown shows 195 inventory entries and that State Farm made
payment (in some amount) for the property listed in all but 21 of those entries. See J.A.
161-68. Even if we assume that all 21 of the zero-pay entries were denied because the
description was inadequate and that all 27 of the omitted entries were omitted because the
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items were insufficiently substantiated, 10 State Farm’s own accounting shows that more
than 75% of the entries (167 of 215) on Hale’s inventories were sufficiently substantiated
to permit State Farm to determine value and make payment. 11
Based on this evidence, a reasonable factfinder could reject State Farm’s assertion
that Hale “refused” to comply with the policy and instead conclude that Hale made a good-
faith effort to provide State Farm with all the information that he had about his personal
property claim and that Hale substantially complied with the policy requirements. If Hale
substantially complied with the policy requirements, then he is not prohibited by the terms
of the policy from pursuing his claim challenging the amount State Farm paid under
Coverage B. And as to that claim, the record shows that State Farm did not pay Hale for
every item of personal property that he claimed was destroyed, and it sometimes paid less
than the value assessed by Hale. Because Hale as property owner is competent to testify to
the value of his own property, the record shows a genuine issue of fact as to whether State
10 It appears that many of the items were omitted not because the description was inadequate, but because the items should have been treated as fixtures and thus part of the claim for dwelling rather than personal property. See Brief of Respondent at 23 n.8. 11 We agree with State Farm that it did not, through its course of handling Hale’s claims, waive the policy requirement that he submit an inventory with adequate detail. Nonetheless, State Farm’s payment practices in this case do provide some evidence of the level of detail that is necessary to substantiate a claim. State Farm insists that it only paid the personal-property claims that were properly substantiated, but its breakdown of the Coverage B payment shows numerous instances where it paid Hale the full value he assigned for inventory items that included no detail at all beyond a simple description. Hale would be free at trial to rely on State Farm’s payment practices to support his claim that the information he substantially complied with the policy’s proof-of-loss requirements.
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Farm paid Hale the full amount required by the policy. State Farm therefore failed to show
its entitlement to summary judgment, and the district court erred by granting it.
State Farm’s brief reveals its frustration with Hale’s refusal to engage with the
company on the resolution of his claim. As set out above, after the meeting between State
Farm and Hale’s attorney in October 2019, all communication from Hale’s side of the fence
stopped. Neither Hale nor his attorney responded to State Farm’s repeated letters and
attempts to make contact—not even after State Farm sent the settlement checks in April
2024. Hale simply remained silent until he filed suit on November 24, 2020, the two-year
anniversary of the fire and last day of the limitations period established by the policy.
Hale’s silence is a bit puzzling, and State Farm’s frustration over the lack of
communication is understandable. However, because Hale by then had already provided
State Farm with his personal property inventories, his subsequent silence was not a breach
of the policy terms. And while State Farm believes this action was improper and
“surreptitiously fil[ed],” Brief of Respondent at 23, there is nothing in the policy that
requires Hale to give advance warning that a lawsuit will be filed. 12 Hale’s ability to prove
his case may well be hampered by the limited evidence he has to support his claims of
underpayment, but there is sufficient evidence in the record for Hale’s claims to survive
summary judgment.
12 The policy gives both parties the right to “demand that the amount of the loss be set by appraisal,” J.A. 30, but neither side made such a request.
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Accordingly, we vacate the district court’s order and remand for further proceedings
on Hale’s challenges to the sufficiency of State Farm’s payment under Coverage B of the
policy. On remand, the parties are free to assert any other claims or defenses under
Coverage B that are not explicitly resolved in this opinion.
IV.
For the reasons explained above, we hereby vacate the district court’s grant of
summary judgment in favor of State Farm and remand for further proceedings consistent
with this opinion.
VACATED AND REMANDED