Crowe v. Trustgard Insurance Company, 5:12-cv-00240

Trustgard issued homeowner’s policy to Lisa Crowe; policy was active when her house and contents burned on June 29, 2011; a separate alleged barn theft was reported August 10, 2011.
Crowe was incarcerated when she renewed the policy and initially submitted an incomplete proof-of-loss while imprisoned; after release she submitted completed proofs claiming about $1.12 million for fire (including >$400,000 personal property) and $31,550 for the theft.
Trustgard investigated, conducted an examination under oath, and denied both claims, alleging Crowe concealed or misrepresented material facts and that the fire was intentionally caused with her knowledge/direction.
Crowe sued in state court for breach of contract, bad faith, and consumer-protection claims; Trustgard removed and sought declaratory relief; breach-of-contract claims were bifurcated and Trustgard moved for summary judgment on the contract issues.
The policy contains a clause voiding the policy for intentional concealment, material misrepresentation, fraudulent conduct, or false statements; Trustgard argued misrepresentations and false statements void the policy even without intent, while Crowe disputed intent.
The court ruled that intent is required to void the policy for false statements about value/nonexistent items, and found genuine disputes of material fact about Crowe’s intent; summary judgment was denied.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether false statements or misrepresentations in proofs can void the policy without intent	Crowe: voiding requires intentional misrepresentation; disputed facts preclude summary judgment	Trustgard: policy’s false-statement provision voids coverage without proving intent	Court: intent is required; disputed intent facts prevent summary judgment
Whether Crowe intentionally overstated or fabricated personal property values	Crowe: valuations and explanations create factual issues; credibility matters for intent	Trustgard: Crowe’s financial condition, affidavits of indigence, and inconsistent statements show intentional overvaluation	Court: evidence creates competing inferences; credibility cannot be resolved on summary judgment
Whether the fire was intentionally caused by Crowe or at her direction	Crowe: denies intentional causation; factual dispute exists	Trustgard: investigation produced evidence suggesting intentional causation with her knowledge/direction	Court: disputed factual record requires jury resolution
Whether the policy is void as a matter of law	Crowe: factual disputes on intent and misrepresentation preclude voiding as a matter of law	Trustgard: misrepresentations and false statements in record warrant voiding policy	Court: denied summary judgment; cannot declare policy void as a matter of law at this stage

State Farm Mut. Ins. Co. v. Fireman’s Fund Am. Ins. Co., 550 S.W.2d 554 (Ky. 1977) (insurance policy construed as contract governed by its terms)
Home Ins. Co. v. Hardin, 528 S.W.2d 723 (Ky. 1975) (false statements in proof of loss require intent to fraudulently overvalue or include non-existent items to void policy)
World Fire & Marine Ins. Co. v. Tapp, 130 S.W.2d 848 (Ky. 1939) (false swearing in proofs may defeat recovery when showing intent to defraud)
Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard; movant’s burden)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment requires a genuine dispute for trial; credibility determinations inappropriate)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (court must draw all reasonable inferences for nonmoving party)
La Quinta Corp. v. Heartland Properties LLC, 603 F.3d 327 (mere scintilla of evidence insufficient to defeat summary judgment)
Biegas v. Quickway Carriers, Inc., 573 F.3d 365 (credibility and weighing of evidence inappropriate on summary judgment)
Lenscrafters, Inc. v. Robinson, 403 F.3d 798 (summary judgment factual view must favor nonmovant)