In a timely appeal Sidney Gabor ("the insured") challenges a summary judgment in favor of State Farm Mutual Automobile Insurance Co. ("the insurer") on his clаim. In a single assignment of error the insured posits that his refusal to provide his income tax returns to the insurer was not a material and substantial breаch of the cooperation clause of his automobile insurance policy.
Upon review, we affirm the judgment of the trial court.
The insured made a claim, under his automobile policy, for the alleged theft loss of a 1982 Oldsmobile Toronado valued at about $5,800. He advised the insurer that his car was stolen from a pаrking lot outside a Parma restaurant on May 26, 1987. The car was recovered two and a half weeks later in a burned-out condition.
Becаuse the claim involved a possible arson, the insurer conducted an investigation. After an examination, a forensic automotive sрecialist advised the insurer that the automobile was immobile by reason of a failed automatic transaxle. The specialist opined that the transaxle failure was noticeable and occurred over an extended time period.
Citing the cooperation clause of the policy, the insurer sought to examine the insured and his wife under oath and requested the insured to produce the certifícate of title to the car, auto loan records, the purchase agreement for the vehicle, written estimates for repairs and maintenance on the car, and the insured's state and federal income tax returns for the year before he purchased thе car. The insured refused to submit the tax records through the insurer repeatedly advised him that failure to provide them could result in a denial of his claim.
Finally, by letter, the insurer did deny the claim, explaining that it found the insured's representation of the car's condition at the time of the theft to be inconsistent with information the insurer developed through its investigation. The insurer advised that, until these inconsistencies were resolved, nо payment would be made on the claim. In addition, the insurer told the insured his failure to provide the requested tax returns was material and substantiаl breach of the insurance contract.
The insured claims the determination of his claim by summary judgment was erroneous. He argues that the requested records were unrelated to the theft of his car and his refusal to produce the records did not prejudice material rights of the insurer so as to warrant denial of the claim.
In order to protect themselves from false claims, insurers frequently include clauses in thеir policies which mandate cooperation by the insured in investigating a claim.
Northedge Laboratory, Inc.
v.
Cincinnati Ins. Co.
(Mar. 3, 1987), Montgomery App. No. CA-10090, unreported. When such cоoperation is a policy condition, and an insured fails to comply, the insurer may be relieved of further obligation with respect to a claim with which the insured did not cooperate.
State Farm Mut. Auto. Ins. Co. Holcomb
(1983),
The policy contains cooperation clаuses requiring that the insured "shall provide all rev.jrds, receipts, and invoices ***" requested, shall cooperate and when asked, assist the insurance company in "securing and giving evidence." Thus, the insured had a duty to cooperate with the investigation under the terms of his policy.
Whether an insured has violated the cooperation clause of his policy is a question to be determined in view of the facts and сircumstances in each case.
Northedge Laboratory Co.
v.
Cincinnati Ins. Co., supra; Moore
v.
State Farm Fire and Casualty
(Dec. 3, 1985), Montgomery App. No. 9200 and 9376, unreported. See
Luntz
v.
Stern, supra
at 237. Generally, the issue of whether there hаs been a violation in an insurance policy is for the factfinder.
Costa
v.
Cox
(1958),
The insured submitted to an oral еxamination under oath as requested by the insurer. In response to its questions regarding aspects of his finances, the insured responded that he had no credit obligations outside his mortgage and car loan payments and that he earned about $200 from sporadic employmеnt during 1985 and 1986. He refused to comment *282 on how he earned money to pay his bills. It is undisputed that the insured refused to submit his 1986 income tax returns upon request.
To constitute a defense to liability, insured’s lack of cooperation must result in material and substantial prejudice to the insurance сompany. Holcomb, supra. See, also, Costa v. Cox, supra. Therefore, before lack of cooperation may warrant cancellation of a policy or relieve an insurer of an obligation on a claim, the insured's failure must prejudice material rights of the insurer. Holcomb, supra.
This court has held that where, as here, thе insurance company raises arson as an affirmative defense to liability, there are strong public policy considerations supporting the admission of evidence of the insured's financial position to show a possible motive for the incendiarism. Dabash v. Royal Indemnity Co. (July 15, 1982), Cuyahoga App. No. 43967, unreported. Likewise, the Montgomery County Court of Appeals found that when an insurer's investigation indicates that arson is a possible cause of fire damage, the policyholder's failure to provide the insurer with pertinent financial information may void a policy fоr breach of the cooperation clause. Moore v. State Farm Fire & Casualty, supra. The Moore court ruled that an income tax return is relevant in a case where the insurance company raises the affirmative defense of arson because tax records create a picture of the insured's еntire financial situation. Id. The insured's financial condition is relevant to a determination of possible motive for incendiarism. Dabash, supra; Moore, supra. The Moore court held thаt, where it is undisputed that the policy holder withheld relevant tax records, the insured's failure to supply the records constitutes a substantial аnd material breach of the insurance agreement, voiding the policy as a matter of law. Moore, supra.
We hold that the insured's refusal to produсe his income tax returns for the year before he purchased the Oldsmobile was a substantial and material breach of his contractual duty to cooperate which clearly prejudiced the insurer's investigation into possible motives for arson. Moore, supra. See, also, Ameduri v. Buckeye Union Ins. Co. (Apr. 28, 1989), Mahoning App. No. 88-CA-13, unreported; Northedge Laboratory Co., supra; Citizens Gas Co., supra. Summary judgment was proрer because the insured's breach of the cooperation clause relieved the insurer of further obligation with respect to his claim as a matter of law.
The assignment of error fails.
JUDGMENT AFFIRMED
It is ordered that appellee recover of appellant its costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Common Pleas Court to carry this judgment into execution.