Allegations of Bad Faith in Denial of Fire Loss Claim

We represented a national insurance company against claims of breach of contract and bad faith. Plaintiffs alleged breach of contract and bad faith relating denial of a claim for fire loss. The Northern District of Ohio granted summary judgment to our client on the grounds that the insureds made intentional misrepresentations relating to their financial condition and the loss of multiple items in the fire in the course of the insurer’s investigation. The district court concluded that “because defendant was investigating plaintiffs’ possible role in an incendiary fire, their financial status bore materially on their potential motive in setting the fire. Likewise, the plaintiffs’ numerous contradictory statements about property lost or destroyed in the fire are material, as they bore materially on the amount defendant would pay out if it honored the policy.”