No Bad Faith where Insured Fails to Cooperate in Fire Loss Investigation
Holmes’ residence was damaged by fire. Auto Owners insured the property. Auto Owners hired an investigator who concluded that Holmes had intentionally set the fire. When Holmes sued for bad faith, Auto Owner moved for summary judgment. Auto owners argued that Holmes had initially refused to submit to an examination under oath, and that when he did eventually agree to do so, he refused to produce financial documents requested by Auto Owners, including his personal tax returns and financial information about his business. Holmes argued that the policy’s cooperation provision was ambiguous, in that it did not specify a time frame for compliance with the insurer’s requests.
The Court of Appeals sided with Auto Owners and dismissed the bad faith claim. The court held that the only reasonable interpretation of the policy was to require the insured to cooperate (including by producing requested documents) during the investigation, not at a point in the future when suit had already been commenced.
Auto Owners Insurance v. Holmes (2011AP352) Court of Appeals per curiam opinion
