summary judgment filed in case in u.s. district court

IN THE UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

JC&C INC., LAWRENCE JAMES HELFRICH, and )JEANNE MARIE HELFRICH )

)Plaintiffs, )

) CIVIL ACTION FILEv. ) NO. 1:11-CV-03591-TWT

)PEERLESS INDEMNITY INSURANCE )COMPANY )

)Defendant. )

___________________________________ )

DEFENDANT’S BRIEF IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT AND IN THE

ALTERNATIVE MOTION FOR PARTIAL SUMMARY JUDGMENT

COMES NOW, PEERLESS INDEMNITY INSURANCE COMPANY

(Hereinafter referred to as “Peerless”), Defendant in the above-styled action, and files

this Brief in Support of its Motion for Summary Judgment, or in the alternative,

Motion For Partial Summary Judgment, showing the Court as follows:

STATEMENT OF FACTS

This claim arose when a fire occurred on October 4, 2009 at 270 Rucker Road

in Alpharetta, Georgia which houses a Carvel Ice Cream franchise owned and

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Case 1:11-cv-03591-TWT Document 30-1 Filed 12/10/12 of 24

operated by JC&C Inc. whose only two officers are Lawrence James Helfrich and

Jeanne Marie Helfrich, also named parties herein. (Complaint ¶ 5).

The Roswell Fire Department responded to a reported burglary which later was

determined to be a burglary in connection with a building fire at approximately 2:17

a.m. Upon arrival the responding officer saw that smoke was coming out of the open

rear door of the building.

Charlie Vacca, as well as Gina Daunt, of the Roswell Fire Department Arson

Unit investigated the incident and determined that the fire was due to arson. There

were at least five separate points of origin with no continuity between the five points.

There was weathered gasoline present on three of the four samples taken from the fire

scene. Two gasoline cans which the insured brought to the store the day prior the fire

and which had never been in the restaurant before the day were also present. (Daunt

Depo. pp. 39-41).

Eighteen (18) months prior to the fire Larry Helfrich lost his job with GE

Capital, which had previously paid him $300,000 annually. The Helfrichs were forced

to obtain a year’s forbearance on the mortgage payments on their home loan of

$335,000 as well as a second mortgage of $40,000. Additionally, they owed $30,000

in automobile loans, $240,000 in student loan debt , and approximately $48,000

credit card debt and personal loans. The insureds depleted most of their assets in the

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months prior to the fire attempting to stay afloat. (L. Helfrich pp. 33-36). Mr.

Helfrich testified that he would classify his family’s financial situation at the time of

the fire as “Bad” (L. Helfrich EUO p. 133).

The Carvel store originally housed both Carvel and a Cinnabons franchise but

the Helfrichs lost too much money operating the Cinnabons franchise to justify its

continued operated and closed down that part of their business. Larry Helfrich

testified that he and his wife invested $600,000 - $700,0000 into opening the

Cinnabons and Carvel’s $300,000 - $325,000 of which was withdrawn from

Helfrich’s 401K fund. (L. Helfrich Depo. p. 162).

Mr. & Mrs. Helfrich are both in agreement that this store never made a profit

in the four years from the day it opened. (EXHIBIT 1, J. Helfrich Police Interview

Track 1).

Larry and Jeanne Helfrich were interviewed by Roswell Police Detective Dana

DeWeese. DeWeese asked Larry and Jeanne Helfrich to submit to a polygraph exam.

Larry Helfrich testified under oath that he and his wife were told the Polygraph

Examinations were inconclusive. (L. Helfrich EUO p. 46). Jeanne Helfrich testified

that no one with Roswell Police Department ever told her that she failed the test, that

it was inconclusive or that she passed the Polygraph Examination. (J. Helfrich Depo.

p. 71, EUO p. 26).

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To the contrary, Detective Dana DeWeese testified he told the Helfrichs that

they had both failed the polygraphs (DeWeese Depo. p. 61). DeWeese further

affirmatively testified that he believed that Larry Helfrich, Jeanne Helfrich, Carolyn

Helfrich and Carolyn’s fiancé, Ryan Smith, conspired together and set this fire. He

testified that he has probable cause to make arrests due at this moment with respect

to the evidence which presently exists. (Id. at 39). Roswell Arson investigator

Charlie Vacca came to the same conclusion (Vacca Depo. p. 48).

There are also problems with Larry Helfrich’s testimony about the purpose of

the trip to New York and Connecticut, how long he was scheduled to stay and what

he hoped to accomplish while he was out of state at the time of the fire.

Larry Helfrich testified that he flew to Connecticut to visit his son on October

3. 2009, the day prior to the fire and had not planned to return until the following

Tuesday October 6th, since he also planned on interviewing for two jobs while he

was up there with Tom Ade formerly with GE on Monday. Ade works out of

Easton, Connecticut. Helfrich was also planning on meeting with a recruiter working

at Madison Davis by the name of Terry Fitzgerald whom he had planned on meeting

on Tuesday for lunch (L. Helfrich Depo. pp 91-95). Larry Helrich testified that when

he learned of the fire early Sunday morning, he called and rescheduled his flight from

the originally scheduled departure date on the following Tuesday to that Sunday of

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the fire. (Id. at 75 )

Helfrich testified that he was meeting with his son on Sunday, October 4th but

that he had set aside the following Monday and Tuesday strictly for the purpose of

interviewing with Fitzgerald and Ade with the return flight to leave on Tuesday

afternoon which would give him Monday to interview with Ade and Tuesday

morning to interview with Fitzgerald in order to have time to catch the afternoon

flight back home. (EUO pp. 72-77).

Peerless’ opinion is that Helfrich had flown to New York and say he had

interviews scheduled to divert suspicion away from him and provide an alibi for his

whereabouts at the time of the fire while other members of the family actually set the

fire alone or in concert with one another.

However, the original Delta reservation for flights obtained on line by Helfrich

for travel to and from New York City scheduled his flight to return on Monday (the

day after the fire) which would not have permitted interviews in New York and

Connecticut on Monday and Tuesday as Larry Helfrich testified. (EXHIBIT 3).

Larry Helfrich told the police that there had been surveillance installed in the

Carvel store in 2009, but he removed the surveillance equipment out of Carvel in

January or February, 2009 and brought the system to Windy City before they fired

people in February, 2009 for stealing food. (L. Helfrich Police Track 3 1:16:40).

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Jeanne Helfrich, on the other hand, testified that Larry did not move the Surveillance

system until just one or two days prior to the fire in October, 2009. (J. Helfrich Police

Track 3....48:00. )

Larry Helfrich testified that they had an Espresso machine which had just been

repaired. He stated that he had just picked up the espresso machine and brought to

the store the Saturday prior to the fire. He placed it on a rolling cart. The machine

cost $12,000 when it was bought new in 2006. (L. Helfrich EUO pp.98-99) Larry

Helfrich testified that he had purchased the Espresso machine from Tri-Mark in North

Carolina. He stated that they just recently discovered that this had been stolen during

the fire. (Id.). Jeanne contradicted Larry and testified that the only thing taken was

the cash bag in the back of the store with approximately $400. Jeanne said that the

only thing that was taken was the $400 in cash and said absolutely nothing at all

about the $12,000 Espresso machine being stolen in an EUO that was taken three (3)

months after the reported theft. (J. Helfrich EUO p. 67). Helfrich testified in his

Deposition that he did not state in his Examination Under Oath that the Espresso

machine had been purchased at Tri-Mark which was returned to the Carvel store the

day prior to the fire. (L. Helfrich Depo. p. 43-46). This statement is betrayed by Larry

Helfrich’s definitive, unqualified, unequivocal testimony from the Examination

Under Oath . (L. Helfrich EUO pp. 98-100, ) Furthermore, Peerless contacted Tri-

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Mark who stated that no Espresso machine had ever been ordered by or sold to JC&C

by Tri-Mark. (EXHIBIT 2).

Finally, prior to the Examination Under Oath a letter was delivered to the

Plaintiffs requesting that they submit to the EUO and produce documents to Peerless

at the EUO necessary for the insurer to evaluate the claim. (EXHIBIT 3).

Among the documents requested were the following which, although sought

by Peerless were not provided by the insureds at the Examination Under Oath.

6. Originals of any documentation reflecting income for 2008 and 2009;

7. Copies of your personal tax returns for 2006, 2007 and 2008, includingany amended tax returns and all schedules;

8. Copies of business tax returns for JC&C Inc., for2006,2007 and 2008, including any amended or refiledtax returns;

9. A signed IRS Form 4506;

11. A completed Inventory Form;

12. All original receipts of purchases, invoices, owner’s manual and/orwarranty documentation for items involved in this loss, includingdocumentation which contains the serial number for items taken in thisloss;

21. Completed, signed proof of loss regarding the above-captioned claim;

22. Copies of franchise agreement with Carvel/Focus Group;

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23. Copies of all written correspondences with Carvel/Focus Group from10/1/2008-10/1/2009, including but not limited to letters, notes, emailsand faxes;

24. Copies of all invoices you received from Carvel/Focus Groups from10/1/2008-10/1/2009;

25. Copies of all monthly sales from 10/1/2008-10/1/2009;

26. Copies of all invoices for supplies for food/paper supplies/equipmentsupplies from 10/1/2008 -10/1/2009;

29. Copies of your purchase agreement for the purchase of Pamela’sChocolates;

34. Copies of payroll records for the business from October 1, 2008 throughOctober 31, 2009;

45. Copies of all 401K statements for 2005, 2006, 2007 and 2008 to present;

48. Copies of all your monthly statements/payment history for AmericanAlarm from October 1, 2008 through October 31, 2009;

Helfrich did not produce the documents reflecting income for 2008 and 2009.

He also did not produce his 2006, 2007 and 2008 tax returns. Helfrich stated that he

would produce them at a later date. Helfrich also did not produce his inventory

form, again stating that he would produce it at a later date. Helfrich stated that he

would produce all of the invoices necessary to satisfy a complete inventory list.

Helfrich did not produce the Proof of Loss or the franchise agreement. He also did

not produce the email from Carvel stating that they could be released from their

franchise agreement, payroll records, 401K invoices, American Alarm statements,

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invoices for supplies or the sales information nor did he produce the purchase

agreement for Pamela’s Chocolates. EXHIBIT 3 references only the documents

required at the EUO which was requested by the undersigned Attorney hired by

Peerless. Peerless sent its own letter to the insured on its own letterhead dated

May 24, 2010 requesting its own set of documents in addition to those documents

requested in the Examination Under Oath. Although that letter requested different

documents, the same general categories of documents that were not produced

including the purchase agreement for Pamela’s Chocolates, invoices, American Alarm

statements, and invoices for supplies or the sales information for the store.

LEGAL ANALYSIS

Summary Judgment is appropriate if the record shows there are no genuine

issues of material fact and that movant is entitled to judgment as a matter of law. Fed.

R. Civ. P. 56( c). The Court should grant summary judgment when, “a party fails to

make a showing sufficient to establish the existence of an essential element of that

party’s case.” Nolen v. Boca Raton Cmty. Hosp. Inc., 373 F.3d 1151, 1154 (11th

Cir. 2004), citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986).

In order to defeat and survive Summary Judgment, the non-moving party “must

do more than simply show that there is some metaphysical doubt as to the material

facts.” Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586

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(1986). The non-moving party must make a sufficient showing on each essential

element of the case for which it has the burden of proof. Celotex, 477 U.S. at 323.

Therefore, the non-moving party must present specific evidence of every element

material to its case so as to create a genuine issue for trial. Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 323 (1986). Otherwise, Summary Judgment may be

entered against the non-moving party. Id.

Because there are no genuine issues of material fact that would support

Judgment in favor of the Plaintiff on the claims currently before the Court, as

discussed, Defendant Peerless is entitled to Summary Judgment which is easily

decided here as a matter of law.

Jeanne Helfrich testified that investigators Vacca and Daunt never told them

the results of the polygraph. (J. Helfrich Depo p. 73). DeWeese testified in his

Deposition that Helfrich was advised during her second interview that she and her

husband both failed the polygraph examination. (DeWeese Depo p. 61 )

There was a surveillance system at the Carvel store but it had been removed

prior to the fire. Larry Helfrich stated that he had moved it to the Windy City

restaurant in January or February, 2009. “Q. When did you bring [the surveillance

system] from [Carvel to Windy City Grill]? A. We brought it over to the other

store when we thought things were disappearing before we fired the other

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people. Q. How far back did you fire them? A couple of days? A. Months.

Months. Like January, February I brought it over there” (Larry Helfrich Police

Interrogation Track 1. Counter 1:16:40).

However, when the police questioned Jeanne Helfrich about when the

surveillance system was removed from the Carvel to Windy City Grill she stated that

this was moved only a couple of days prior to the fire. “ Q. When was the

surveillance taken away? A. It was either the day before [the fire] it was a couple

of days before. I’m not really sure. Larry took it out. Q. It was one to two days

before the fire? A. I think so. Q. I think that’s what you told me up there. A. I

think so. (Jeanne Helfrich Police Interrogation. Track 1. Counter 47:55- 48:30).

Jeanne Helfrich testified that when the surveillance system was removed from

the Carvel store to move to Windy City Grill, the wires were unscrewed from the back

of the recorder. The wires were not cut. (id. at 49:40-50:00). However, when the

Police and Arson investigators inspected the connections which had previously

connected the Surveillance recorder which Detective DeWeese the were cut which

the Burglary Detective felt was highly suspicious since Helfrich planned on using the

system again at the Windy City Grill. (DeWeese Depo. p. 51, 57-58).

The left rear door was open when the fire department arrived and upon

inspection the Burglary Detective did not find evidence of forced entry. He testified

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that whoever entered the premises did so with a set of keys. (DeWeese Depo. pp.14-

15)

1. Concealment, Misrepresentation or Fraud and Dishonesty

The Peerless Insurance policy contains the following Conditions which state:

Concealment, Misrepresentation or Fraud

“This policy is void in any case of fraud by you as it relates tothis policy at any time. It is also void if you or any otherinsured, at any time, intentionally conceal or misrepresent amaterial fact concerning:

(1). This policy;(2). The Covered Property;(3). Your Interest int eh Covered Property; or (4). A claim under this policy.

Dishonesty

Dishonest or criminal acts by you, anyone else with an interest in theproperty, or any of your or their partners, employees, directors, trustees,authorized representatives or anyone to whom you entrust the propertyfor any purpose:

(1) Acting alone or in collusion with others;(2) Whether or not occurring during the hours of employment.

It is well settled in Georgia that policy provisions such as that quoted above

are valid and enforceable. Perry v. State Farm Fire & Casualty Co., 734 F.2d

1441 (11th Cir. 1984); Allstate Ins. Co. v. Baugh, 173 Ga. App. 615 (1985).

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The law imposes upon Insureds the utmost of honest good faith dealing

with the insurer. See: Fortson v. Cotton States Mut. Ins. Co., 168 Ga. App. 139

(1983); Chaacou v. American Central Ins. Co., 241 F.2d 889 (5th Cir. 1957);

A misrepresentation by a claimant frustrates the fulfillment of the insurance

contract’s purpose and such actions void the right of the claimant to recover under

the policy and also voids an insurer’s obligation to pay under the policy. Mass

Bay Ins. Co. v. Hall, 196 Ga. App. 349, 352 (1990). Any other rule would be “an

invitation to fraud” id Fraudulent concealment or misrepresentations by an insured

need not be under oath in order to void the insured’s claim. See: American

Diver’s Supply and Mftg. Corp v. Boltz, 482 F.2d 795 (1973); Mercantile Trust

Co. v. N.Y. Under. Ins., 376 F.2d 502 (1967)

It is not necessary that the misrepresentation be proven by direct and

positive proof, but it may be shown by circumstantial evidence. If the facts and

circumstances shown in evidence are such that it would lead a reasonable man to

the conclusion that fraud exists, this is all the proof that the law requires. Patillo

v. Thompson, 106 Ga. App. 808 (1962); Rollins v. Great S.W. Fire Ins. Co., 162

Ga. App. 139 (1982).

In addition to the express terms of the contract for insurance entered into

between the parties, Georgia law “stresses the insurer’s compelling interest in and

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right to accuracy in the proof of loss.” Wood v. Independent Fire Ins. Co., 749

F.2d 1493, 1497 (11th Cir. 1985);Amer.Alli. Ins. v. Pyle, 62 Ga. App. 156 (1940).

Because of the very clandestine nature, the act of fraud is generally incapable

of direct proof. It may therefore be proved by circumstantial evidence and

unexplained circumstances surrounding the loss. Boone v. Royal Indem. Co., 460

F.2d 26 (10th Cir. 1972); Cora Pub. v. Cont’l Cas., 619 F.2d 482 (5th Cir. 1980).

A misrepresentation is material if a reasonable insurance company, in

determining its course of action, would attach importance to the fact

misrepresented. Chaacou v. American Central Ins. Co., Supra

There were numerous violations of the Concealment, Misrepresentation or

Fraud exclusion as well as the Dishonesty exclusion, there is sufficient evidence

to believe that fraud was perpetuated down to submitting claims for which they had

no proof such as the $12,000 Espresso machine.

The Helfriches depleted many of their assets attempting to stay afloat. Mr.

Helfrich testified that he would classify his financial situation as “bad.” Three days

after the fire, Mr. Helfrich contacted the property manager at 270 Rucker Road and

inquired into breaking the lease. A meeting with the owner was set up to discuss

his options. (Helfrich Depo. pp. 36-41).

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As a result of these violations of the Misrepresentation, Concealment and

Fraud violations as well as the Dishonesty exclusion violations on many levels,

Peerless is entitled to Summary Judgement on this suit.

2. Failure of Insureds To Cooperate

The Peerless Policy provides as follows:

PART E. PROPERTY LOSS CONDITIONS:

3. Duties In The Event Of Loss Or Damage

a. You must see that the following are done in the event ofloss or damage to Covered Property:

(1) Notify the police if a law may have been broken.

(2) Give us prompt notice of the loss or damage. Include adescription of the property involved.

(3) As soon as possible, give us a description of how, whenand where the loss or damage occurred.

(4) Take all reasonable steps to protect the Covered Property fromfurther damage, and keep a record of your expenses necessary toprotect the Covered Property, for consideration in the settlementof the claim. This will not increase the Limit of Insurance. However, we will not pay for any subsequent loss or damageresulting from a cause of loss that is not a Covered Cause ofLoss. Also, if feasible, set the damaged property aside and in thebest possible order for examination.

(5) At our request, give us complete inventories of the damaged and

undamaged property. Include quantities, costs, values andamount of loss claimed.

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(6) As often as may be reasonably required, permit us to inspectthe property proving the loss or damage and examine yourbooks and records. Also permit us to take samples of damagesand undamaged property for inspection, testing and analysis,and permit us to make copies from your books and records.

(7) Send us a signed, sworn proof of loss containing theinformation we request to investigate the claim. You must dothis within 60 days after our request. We will supply you withthe necessary forms.

(8) Cooperate with us in the investigation or settlement of theclaim.

b. We may examine any insured under oath, while not in the presenceof any other insured and at such times as may be reasonably required,about any matter relating to this insurance or the claim, including aninsured’s books and records. In the event of an examination, aninsured’s answers must be signed.

There are numerous cases which confirm that an insured's failure to provide

requested documents constitutes a failure to cooperate under the policy. Purvis v.

State Farm, 901 F.2d 944 (11th Cir. 1990); Halcome v. Cincinnati Ins. Co., 254 Ga.

742 (1985); Hines v. State Farm, 815 F.2d 648 (11th Cir. 1987).

The Georgia Courts have interpreted the Cooperation Clause to require that the

insured cooperate with their insurer in the investigation of accidents, the securing of

evidence, giving notice of the accident, and making full, fair, complete and truthful

disclosures of the facts known to them relative to the claim when called upon to do

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so. St. Paul Fire & Mar. Ins. Co. v. Gordon, 116 Ga. App. 658 (1967); H.Y. Akers

& Sons, Inc. v. St. Louis Fire & Mar. Ins. Co., 120 Ga. App. 800 (1969).

A breach of the cooperation provisions by the insured relieves the insurer of

its obligations to pay any claim asserted. Hurston v. Ga. Farm Bur. Mut. Ins. Co.,

148 Ga. App. 324 (1978).

Under Georgia law, there is a duty on a policyholder to read their policy and

familiarize themselves with its provisions and conditions. The policy holder is

presumed to know the policy provisions and is charged with the knowledge of the

terms and conditions of the policy. Security Life Ins. Co.. v. Gober, 50 Ga. App. 404;

Massey v. Cotton States, 70 Ga. App. 794; Thomson v. So. Mut. Life, 90 Ga. 78;

Hatfield v. Colonial Life Ins. Co., 102 Ga. App. 630; S & A Corp. v. Berger & Co.,

111 Ga. App. 39.

Here, the insureds, provided false statements to Peerless Insurance, in violation

of the cooperation clause in the policy. Here, as in Hurston, the insured’s false

statements results in a breach of the policy and a forfeiture of the right to pursue this

loss under the law.

In Allstate Ins. Co. v. Hamler, 247 Ga. App. 574 (2001) the Court of Appeals

found that the insured’s failure to provide documents requested by an insurer as part

of an Examination Under Oath violates the terms and conditions of that insurer’s

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policy of insurance if the policy specifically requires production of requested

documents at the Examination Under Oath.

Allstate sent Hamler a letter requesting that she bring certain documents, as

required by the insurance policy, to her Examination Under Oath. The list of

documents was specific and detailed as in the present matter. Hamler brought a

portion of the documents, including bank statements, receipts and other documents

concerning items involved in the loss, a copy of her driver's licenses, photographs

of items allegedly stolen, and a copy of the police reports. Hamler also agreed to

provide copies of canceled checks for the purchase of items involved in the loss.

Hamler refused, however, to provide documentation showing her amount of

income and debts at the time of the incident, claiming that this information was

irrelevant. For example, she refused to provide federal and state tax returns or

documentation reflecting income for the same years as well as documents which

would have borne upon the issue of possible financial motive for making the claim,

according to Allstate. She refused to provide copies of telephone or other utility

bills, which, Allstate argued, would have provided further information concerning

Hamler's financial motive. Hamler also said she would not provide monthly credit

card or other loan statements, except to the extent that those documents showed the

purchase of items allegedly stolen. Hamler also refused to provide any records

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showing hospital admissions and discharges, which may have been relevant to her

claim that she was not at home when the alleged burglary occurred.

The Court of Appeals agreed with Allstate that Hamler breached the contract

of insurance by failing to provide these documents, even though Hamler did

provide certain other information. The Court of Appeals found issues in Hamler’s

appeal were similar to those in Halcome v. Cincinnati Ins. Co., 254 Ga. 742

(1985).

In Halcome, the insureds submitted a claim to Cincinnati Insurance

Company after several items were allegedly stolen from their automobile. Like the

insurance policy in this case and Hamler, the plaintiffs' policy required them to

provide records and documents requested by Cincinnati as often as required by the

insurer. During the plaintiffs' Examination Under Oath, they provided some of the

requested information. They "answered numerous questions regarding their

activities at the time of the loss," but they also refused to answer questions or

otherwise provide information concerning their income or sources of income. In

particular, they refused, among other things, to provide federal income tax returns

and W-2 forms for five years before the loss.

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Cincinnati claimed, as did Allstate in Hamler, that this information was

needed to determine the insureds’ "possible motives for submitting a false,

fraudulent, or exaggerated claim, and that the failure of the insureds to provide this

information prohibited the company from completing its investigation of the

claim." The Supreme Court of Georgia concluded in Halcome that the insureds

breached their contract of insurance by failing to provide information or documents

requested by Cincinnati, stating that if they "failed to provide any material

information called for under . . . the policy ... they breached the insurance contract."

The Court in Halcome found that because evidence of possible fraud

existed, "a complete investigation of the claim included an investigation of the

suspected fraud" The insureds’ recent income and sources of income were

relevant, and failure to comply with the insurer's requests was a breach of the terms

of the insurance policy. Similarly, the Court of Appeals in Hamler found that the

information sought by Allstate was in fact relevant and discoverable. The Court

of Appeals found in Hamler, as in Halcome, that the insurer, Allstate, was

authorized to suspect fraudulent behavior. Evidence was presented that Hamler

may have misrepresented material facts concerning her discovery of the claim, such

as whether any of her neighbors may have seen suspicious activity and whether she

had spoken with any neighbors concerning the alleged burglary.

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Hamler refused to comply with Allstate's request for this relevant

documentation and, by refusing to cooperate, breached her insurance contract.

The Court of Appeals ruled in Hamler that Summary Judgment should have

been granted to Allstate by the trial court.

The Cooperation Clause to require that the insured cooperate with his insurer

in the investigation of accidents, the securing of evidence, giving notice of the

accident, and making full, fair, complete and truthful disclosures of the facts

known to them relative to the claim when called upon to do so. St. Paul v.

Gordon, 116 Ga. App. 658 (1967); H.Y. Akers v. St. Louis Fire & Marine Ins. Co.

120 Ga. App. 800 (1969).

A breach of the cooperation provisions by the insured relieves the insurer of

its obligations to pay any claim asserted Hurston v. Ga. Farm Bur. Mut. Ins. Co.,

148 Ga. App. 324 (1978). A false material statement by the insured has been held

by the Georgia Courts to constitute a violation of the Cooperation clause.

The Helfriches were asked to produce many categories of documentation

which would have assisted Peerless in evaluating this claim. The insured’s failure

to produce these documents where requested results in JC&C’s forfeiture of this

claim.

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3. Partial Summary Judgment On Bad Faith Claim

In order to prevail on a bad faith claim under O.C.G.A. § 33-4-6(a), an

insured must show: (1) that a demand for payment was made against the insurer at

least 60 days prior to filing suit and (2) that the insurer’s failure to pay was

motivated by bad faith. Primerica Life Ins. Co. v. Humfleet, 217 Ga. App. 770,

771 (1995).

In the present matter the insured produced a letter from The Hamilton Law

Firm purporting to be a “Demand Letter” seeking payment of the claim dated

September 13, 2010, a year after the loss. While the letter accurately listed the

various policy coverages, some of which did not even apply to this loss, when it

came to the point in the letter to state the amount of the demand, the letter stated...

verbatim...... “INSERT”.

. Attorney’s fees and penalties provided by statute for bad faith should never be permitted

unless the insured can show that the insurer acted in such a way that its defense was

“frivolous and unfounded.” Georgia Farm Bureau Mut. Ins. Co. v. Boney, 113 Ga.

App. 459 (1966); Continental Casualty Co. v. Owen, 90 Ga. App. 200 (1954).

Where there is evidence that the insurer’s refusal to pay the Plaintiff’s claim was

justified there can be no bad faith. See: Lincoln Life Ins. Co. v. Anderson, 109 Ga. App.

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238 (1964); National-Ben Franklin Ins. Co. v. Prather, 109 Ga. App. 459 (1964); Old

Colony Ins. Co. v. Dressel, 109 Ga. App. 465 (1964).

If the evidence at trial of the matter provides the insurer “reasonable

grounds” for contesting the claim, there can be no finding against an insurer for

bad faith and attorney’s fees in the matter regardless of the case’s outcome.

Grange Mut. Cas. Co. v. Law, 223 Ga. App. 748 (1996); Interstate Life &

Accident Ins. Co. v. Williamson, 110 Ga. App. 557 (1964).

Here, the insured failed to state the amount of the claim in its “Demand

Letter from the Hamilton Firm dated September 13,2010, resulting in a failed

attempt at being entitled to seek Bad Faith. Similarly, the fact that Peerless had

reasonable and debatable grounds for questioning this claim, then Partial Summary

Judgment is mandated in favor .

CONCLUSION

For the reasons stated above, Peerless seeks Summary Judgment in its favor

on the basis of the insured’s violation of the Misrepresentation, Fraud and

Concealment provision in its policy, as well as material violations of the

Dishonesty Exclusion. Additionally, the insured’s claim fails because the insureds

failed to provide a Proof of Loss stating the amount of the loss and, in fact, admit

to this date they are unable to calculate the amount of their claim. As the party with

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the burden to prove its claim, the Plaintiffs claim here fails because they are unable

to state what their damages are. For this reason alone, Summary Judgment for the

Defendant is Warranted. Interagency v. Danco Fin. Corp., 203 Ga. App. 418

(1992).

This 10th day of December, 2012

CLAXTON & CLAXTON, LLC

WILLIAM P. CLAXTON Georgia State Bar No. 129320 Attorneys For Defendant

Suite 115180 Interstate North ParkwayAtlanta, Georgia 30339770.933.1946770.933.8455 (Fax)

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