421 Mass. 333 | Mass. | 1995
The plaintiffs, Americo and Maria Mello, commenced this action against Hingham Mutual Fire Insurance Company (Hingham) in the Superior Court on April 26, 1994, to recover policy proceeds for fire loss. Hingham moved for summary judgment alleging that Americo Mello’s failure to submit to an examination under oath, as required both by the policy and G. L. c. 175, § 99, Twelfth (1994 ed.), constituted a material breach of the fire insurance policy, thus barring recovery under the policy. The plaintiff asserted that his refusal to submit to the examination was justified because he had become the subject of a criminal investigation for arson in connection with this fire. The plaintiff contends that the privilege against self-incrimination as protected by art. 12 of the Declaration of Rights of the Massachusetts Constitution and the Fifth Amendment to the United States Constitution justifies his refusal to submit to such an examination.
On October 27, 1994, a Superior Court judge granted Hingham’s motion for summary judgment. The plaintiffs have appealed. We granted their application for direct appellate review.
I.
The record on which the Superior Court judge granted summary judgment reveals the following facts. Hingham issued a policy to the plaintiffs effective September 4, 1992, insuring their residence. On September 25, 1992, a fire of undetermined origin broke out in the plaintiffs’ residence. On that day, Hingham received oral notice of loss and commenced an investigation. In addition, the Danvers police and the Massachusetts State police began investigations into what they deemed a suspicious fire. The law enforcement authorities immediately informed Hingham that the plaintiff was a suspect in their respective investigations. Four days later, Hingham sent the plaintiffs notice of the cancellation of their policy, effective October 9, 1992.
On March 29, 1993, Hingham demanded that the examination take place before April 30, 1993. The plaintiff declined. On May 3, 1993, Hingham denied coverage for the fire loss.
II.
The plaintiffs raise two issues on appeal. First, the plaintiffs contend that, because the plaintiff was a subject of an on-going criminal investigation concerning the fire, his privilege against self-incrimination, as guaranteed by art. 12 and the Fifth Amendment, excused him from providing a statement under oath to Hingham as required by the insurance policy concerning the circumstances surrounding the fire.
A.
General Laws c. 175, § 99 (1994 ed.), prescribes a statutory form for fire insurance policies. The statute sets out the insured’s duty to cooperate in two sentences reprinted in the margin.
In 1980, our decision in Johnson Controls, Inc. v. Bowes, supra, “modified the common law in this area by adding prejudice requirements in the contexts of notice provisions.” Darcy v. Hartford Ins. Co., 407 Mass. 481, 489 (1990). We reasoned that the notice provision of insurance policies should no longer be strictly construed as a condition precedent to the insurer’s liability. Johnson Controls, Inc. v. Bowes, supra at 282. Instead, the insurer must establish “both that the notice provision was in fact breached and that the breach resulted in prejudice to its position,” for its obli
Our decision in Johnson Controls, however, affected only the notice provisions of the G. L. c. 175, § 99 duty to cooperate. The second sentence of the statutory provision addresses the insured’s responsibilities during the investigation: “as often as may be reasonably required” by the insurer, the “insured . . . shall . . . submit to examinations under oath.” The statute contemplates that the insurer, when it determines that an examination is reasonable, may require that the insured submit to such an examination under oath.
It is the law in most jurisdictions that the submission to an examination, if the request is reasonable, is strictly construed as a condition precedent to the insurer’s liability. See 13A G. Couch, Insurance § 49A:361 (2d ed. 1982 & Supp. 1994); 5A J.A. Appleman & J. Appleman, Insurance Law and Practice § 3549 (1970 & Supp. 1994). See also Pervis v. State Farm Fire & Casualty Co., 901 F.2d 944, 946-947 (11th Cir.), cert. denied, 498 U.S. 899 (1990); Allstate Ins. Co. v. Longwell, 735 F. Supp. 1187, 1193-1195 (S.D.N.Y. 1990); Standard Mut. Ins. Co. v. Boyd, 452 N.E.2d 1074, 1077 (Ind. Ct. App. 1983), and cases cited. This court agrees with these authorities.
A person may not seek to obtain a benefit or to turn the legal process to his advantage while claiming the privilege as a way of escaping from obligations and conditions that are normally incident to the claim he makes. This principle holds true particularly where the benefit he seeks is from another private party, who is being asked to make good on its obligation forgoing the countervailing advantages that were part of the bargain. See, e.g., Matter of Kenney, 399 Mass. 431, 437-442 (1987) (upholding enforcement of a subpoena requiring attorney to produce possibly incriminating “required records”); Wansong v. Wansong, supra (upholding discovery sanction against party in a divorce proceeding who invoked his privilege against self-incrimination as to questions about
Indeed, even in the criminal process, a defendant cannot turn the legal process to his advantage by asserting this privilege. See, e.g., Blaisdell v. Commonwealth, 372 Mass. 753, 766 (1977) (where defendant voluntarily submits to psychiatric examination and offers those results at trial, he cannot, by asserting his privilege against self-incrimination, refuse to
With this as background we turn to the plaintiffs’ claim. They argue that the Superior Court’s allowance of Hing-ham’s motion for summary judgment imposed an impermissible penalty upon the plaintiff for asserting his privilege against self-incrimination. We disagree. Where the undesirable consequences arise from the claimant’s own voluntary actions, the privilege against self-incrimination cannot be used to extricate the claimant from such a dilemma of his own making. The plaintiff voluntarily entered into the contract with Hingham, another private party. Hingham obligated itself to perform duties, some of which were contingent on the plaintiffs’ actions. The plaintiffs made a claim against Hingham for coverage, and Hingham asks that the plaintiff keep his part of the bargain even if it may harm his interests in the criminal investigation. A dilemma this may be, but it is not of Hingham’s or the Commonwealth’s making anymore than it is a dilemma of the Commonwealth’s making when an accused must choose between forfeiting the opportunity to speak in his own behalf and subjecting himself to cross-examination. Thus, it is not by the Commonwealth or by Hingham that the plaintiff “is compelled to . . . furnish evidence against himself,” but by his own contractual undertaking.
B.
The plaintiffs seek to blunt the force of this argument by two narrower suggestions. First, they propose that the insurer might have waited until the completion of the criminal proceedings — which, after all, did result in a verdict of acquittal in the arson prosecution — before requiring the plaintiff to respond under oath to the insurer’s inquiries. This is only a less extreme version of the plaintiffs’ principal contention that the insurer’s contractual right to the insured’s full cooperation must yield to the insured’s concerns about self-incrimination. The insurer’s contractual right is to determine promptly — while the evidence and memories are still fresh — the validity of any loss for which it might become liable. The insurer is under a corresponding duty to pay any claim promptly, and if it is later found to have inappropriately delayed or withheld payment, it may significantly increase its own liability. See G. L. c. 176D, § 3 (9) (1994 ed.) (prohibiting unfair or deceptive acts or practices in the business of insurance); G. L. c. 93A, § 9 (1994 ed.) (civil cause of action for persons injured as a result of a c. 176D violation with the possibility of recovering trebled damages and attorney’s
Second, it has been suggested that the plaintiff’s concerns could have been accommodated if the insurer had been content to question only Mrs. Mello under oath, since she had not been told that she was under criminal investigation. Our response to this contention is similar to the one above. The insurer is contractually bound to both the plaintiffs and contractually entitled to pursue its investigation by requesting an inquiry of either. It was free to choose whomever or both of the insureds it believed could assist in that investigation.
Finally, the plaintiffs complain that the insurer and the law enforcement authorities were working “hand-in-glove,” suggesting that the insurer’s demand under the statute and the policy was a mere pretext for assisting law enforcement authorities with their investigation.
III.
As an alternative basis for reversal of the Superior Court’s order, the plaintiffs suggest that Hingham, by its cancellation of the policy, was the first to breach materially the insurance contract. General Laws c. 175, § 99, and the policy, however, authorize Hingham’s cancellation of the policy. The policy, adopting the language of the statute, states: “When this policy has been in effect for less than 60 days we may cancel for any reason, other than nonpayment of premium, by notifying you at least 5 days before the date of cancellation takes effect.” The policy also prescribes the method for delivery and form of the notice.
Hingham complied with the requirements of the policy and the statute. The policy period commenced on September 4, 1992. Hingham sent notice of cancellation on September 29, 1992, to be effective on October 9, 1992. At that time, Hing-ham also refunded the excess premium paid by the plaintiffs as required by the statute. See G. L. c. 175, § 99, Twelfth. Therefore, Hingham’s cancellation of the policy was not a breach, material or otherwise, of the policy’s provisions.
IV.
For the reasons stated in this opinion, the Superior Court’s order granting summary judgment for Hingham is affirmed.
So ordered.
The policy authorized Hingham’s cancellation of the plaintiffs’ policy. Such cancellation, however, merely terminated the parties’ relationship
Although the policy is not part of the summary judgment record, the parties agree that the policy states: “Section I - CONDITIONS. 2. Your Duties After Loss. . . . f. We may reasonably require you to: . . . (3) submit to an examination under oath, while not in the presence of any other insured, and sign the same.” This requirement is commonly referred to as the “statement under oath clause,” and it has appeared in all standard form Massachusetts homeowners insurance policies since March, 1982, pursuant to G. L. c. 175, § 99. See St. 1981, c. 718, § 2, amending G. L. c. 175, § 99, Twelfth. According to the judge’s memorandum, the policy further states that “[n]o action can be brought against [the insurer] unless there has been compliance with the policy provisions.”
"The insured shall give immediate written notice to [the insurer] of any loss . . . furnish a complete inventory of the destroyed and damaged property, . . . and the insured shall forthwith render to [the insurer] a signed, sworn statement in proof of loss which sets forth to the best knowledge and belief of the insured the following: the time and cause of the loss, the interest of the insured and of all others in the property, the actual cash value of each item thereof and the amount of loss thereto .... The insured, as often as may be reasonably required, shall exhibit to any person designated by [the insurer] all that remains of any property herein described, and submit to examinations under oath by any person named by [the insured], and subscribe the same; and, as often as may be reasonably required, shall produce for examination all books of account, bills, invoices ... at such reasonable time and place as may be designated by [the insurer] . . . .” G. L. c. 175, § 99, Twelfth (1994 ed.).
The plaintiffs in their appeal do not contest the premise that the refusal to submit to an examination under oath, absent their concerns about self-incrimination, would be a material breach of the insurance contract discharging Hingham from liability.
We attach no significance to the fact that the obligation is imposed as a statutorily prescribed term in a standard policy. This is but a statutory restatement and formalization (in so far as an oath is required) of the general obligation of insureds in many kinds of contracts of insurance to cooperate with the insurer in the investigation and verification of the claim.
Although the issue is one of first impression under G. L. c. 175, § 99, with two exceptions, every jurisdiction with a statute like our own holds the insured to his obligation, just as the judge below has done — and the two exceptions only allow the insured to postpone his obligation, an option we discuss below. See, e.g., United States Fidelity & Guar. Co. v. Wigginton, 964 F.2d 487 (5th Cir. 1992); Pervis v. State Farm Fire & Casualty Co., 901 F.2d 944 (11th Cir.), cert. denied, 498 U.S. 899 (1990); Saucier v. United States Fidelity & Guar. Co., 765 F. Supp. 334 (S.D. Miss. 1991); Kisting v. Westchester Fire Ins. Co., 290 F. Supp. 141 (W.D. Wis. 1968), aff'd, 416 F.2d 967 (7th Cir. 1969); Warrilow v. Superior Court, 142 Ariz. 250 (Ct. App. 1984); Hickman v. London Assur. Corp., 184 Cal. 524 (1920); Restina v. Aetna Casualty & Sur. Co., 61 Misc. 2d 574, 578 (N.Y. Sup. Ct. 1969). For cases stating the exception, see Knight v. Firemen’s Ins. Co., 227 Mo. App. 426, 432 (1932); Agricultural Ins. Co. v. Inglehart, 386 P.2d 145, 147-148 (Okla. 1963). This is not surprising, for if the plaintiffs contention were valid, it would cut a broad swath through the law of fire insurance and of insurance law generally, if not well beyond.
General Laws c. 148, § 32 (1994 ed.), authorizes the sharing of information between fire marshals, fire and police departments and insurance companies.
