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Insurance agents denied summary judgment in lawsuit filed after fire

December 2, 2015

A man’s lawsuit will continue against an insurance agent and his agency after they insured his rental property but then denied coverage after a fire, alleging the man misrepresented the property’s condition.

Christopher Schmidt allowed his cousin to live in his property in Fort Wayne, but the home ended up being condemned by the health department. Schmidt’s cousin had numerous animals in the property, and the property was covered in excrement, fleas and garbage. The home had to be extensively cleaned and repaired before it was habitable.

Schmidt, at that time, did not have insurance on the property, but arranged for insurance through agent Bart Stith with C&F Insurance Group LLC. There is a dispute as to whether Schmidt signed the application that did not say the property was vacant, uninhabitable, being renovated and intended for rent. Indiana Insurance Co. issued a dwelling fire policy on the property, and the property was destroyed by a fire two months later. The insurance company denied coverage after conducting an investigation, saying the policy contained material misrepresentations.

Schmidt sued alleging Stith, C&F Insurance Group, and Indiana Insurance Co. were negligent related to the contents of the application for the dwelling fire policy and for failing to procure appropriate insurance. The trial court granted summary judgment for the defendants; the Court of Appeals reversed regarding Stith, who has since died, and C&F. In Christopher Schmidt v. Indiana Insurance Company, C&F Insurance Group, LLC, and Bart Stith, 22S01-1507-PL-412, the Indiana Supreme Court agreed with the COA.

Even if Schmidt was truthful and provided complete information regarding the property to the insurance agent, there remains no genuine issue of fact regarding proximate causation, Justice Brent Dickson wrote. No dwelling fire insurance policy would have been issued on such information.

However, summary judgment was not appropriate for Stith and C&F regarding the negligent failure to procure appropriate insurance claim. The two defendants failed to exclude the possibility that other types of fire insurance coverage for the property could have been obtained and issued, Dickson noted.

The justices summarily affirmed the COA as to summary judgment in favor of Indiana Insurance Co.
 

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