United States District Court, E.D. Kentucky, Central Division, Lexington
MEMORANDUM OPINION AND ORDER
M. HOOD, SENIOR U.S. DISTRICT JUDGE
Proctor claims that he was involved in an accident involving
his truck and fifth-wheel recreational vehicle in January
2015. After the accident, Proctor submitted an insurance
claim to GEICO to compensate him for damages to his RV. After
investigating the claim, however, GEICO denied coverage
because GEICO concluded that the damage to the RV claimed by
Proctor preexisted the accident in January 2015. As a result,
Proctor brought this lawsuit for breach of contract and bad
faith. But Proctor made a misrepresentation of material fact
pertaining to the purchase price of the RV that permitted
GEICO to deny coverage under the insurance policy. As a
result, GEICO is entitled to judgment as a matter of law.
Factual and Procedural Background
Lawrence Proctor claims that he was involved in a
single-vehicle accident on January 6, 2015, in Mount Vernon,
Kentucky, involving his truck and 2003 Keystone Challenger
RV. [DE 1-1 at 6]. On the Initial Loss Report, Proctor
described the accident using the following narrative:
I was turning into a [s]ervice station when a
“DRUGGIE” walked out in front of me. I veered off
the road to keep from hitting the man with my truck and my RV
[f]ifth[-]wheel [t]railer. I went down into a Catch basin
alongside the road. This basin was approximately 6 feet deep
and was very rough. I needed a wrecker to get pulled back
onto hard surface. The rear stabilizers [were] pushed back
and folded over twisting all of the metal and ruining the
stabilizers. The Skirting [alongside] the door was twisted
and mangled. The plastic end caps were [shaken] loose and
lost. The spare tire is carried underneath the belly of the
RV. It may be damaged. The three slides were dislodged, and
are sitting disoriented in the RV. All three slides are now
sitting at an angle to the RV. I have attempted to tighten
the slides up to prevent air leakage, I reside in this
37[-]foot RV and it has been cold outside.
[DE 41-1 at 3, Pg ID 464; see DE 41-2 at 1, Pg ID
487]. After the accident, the vehicle was
extracted from the catch basin by Throughtruck, a towing
company. [DE 49-3]. There were no witnesses to the collision
and no police report was filed after the accident.
January 17, 2015, Proctor submitted a claim to his insurance
carrier, GEICO. [DE 41-1]. The GEICO insurance policy
provides the following measures of liability for insurance
claims, (1) “[T]he actual cash value of the stolen or
damaged property at the time of the loss, ” or (2)
“[T]he amount necessary to repair the damaged property
to its pre-loss condition.” [DE 41-3 at 10, Pg ID 498
(emphasis omitted)]. The policy also states that
Coverage is not provided to any person who knowingly conceals
or misrepresents any material fact or circumstance relating
to this insurance:
(a) at the time of application; or
(b) at any time during the policy period; or
(c) in connection with the presentation or settlement of a
[Id. at 28; Pg ID 516].
Proctor filed the insurance claim, Chris Cirillo, a Senior
Field investigator, investigated the claim on behalf of
GEICO. [DE 41-4 at 1, Pg ID 521]. According to Cirillo, a
search of the RV's title and claims history revealed that
the RV was salvaged in June 2013. [Id. at 1, Pg ID
522]. Additionally, Cirillo claims that, prior to
Proctor's purchase of the RV, Shelter Insurance Company
identified the RV as a total loss and that the RV was listed
for sale at a public auction by Copart, Inc. [Id. at
1-2, Pg ID 522-23]. Proctor does not deny the accuracy of
this information but asserts that other than Cirillo's
search of the title and claims history, the other material
cited in support of this factual statement is inadmissible
evidence. [DE 49 at 2, Pg ID 725].
to GEICO, photographs of the RV that were used when it was
previously listed for sale by Coparts, Inc., indicate that
the damage claimed by Proctor preexisted the accident on
January 6, 2015. [See DE 41-1 at 4, Pg ID 465; DE 41-4 at
5-9, Pg ID 525-29]. Cirillo claims that he located the
photographs using a Google cache search on January 29, 2015,
and that copies were taken from easyexport.us, an auto
auction website. [DE 41-4 at 2, Pg ID 522].
does not dispute that his RV was previously sold by Coparts,
Inc., but argues that the photographs and documents allegedly
obtained from Coparts are unauthentic and
inadmissible.[DE 49 at 2-3, Pg ID 725-26]. Proctor has
also provided an affidavit of Jim Bowman who states that he
sold the 2003 Keystone Challenger RV to Proctor and that it
had been salvaged because of water damage. [DE 49-5 at 1, Pg
ID 772]. Bowman also asserted that he had repaired the RV and
that the RV had no exterior damage when Bowman sold it to
January 30, 2015, Cirillo took photographs of Proctor's
RV and conducted a recorded interview with Proctor.
[See DE 41-4 at 2, 11-46, Pg ID 522, 531-66]. In the
interview, Cirillo identified himself as a representative of
GEICO insurance company. [Id. at 20, Pg ID 540].
Additionally, Proctor affirmatively indicated that he was
aware that the interview was being recorded. [Id. at
21, Pg ID 541]. Proctor stated that he had owned the RV since
December 2013 and bought it from a man in Berea, Kentucky.
[Id. at 25, 37 Pg ID 545, 557]. Furthermore, Proctor
gave a lengthy narrative of the accident. [Id. at
26-31, Pg ID 546-51].
Cirillo asked Proctor how much money he paid for the RV, to
which Proctor responded, “I don't really remember.
I take a lot of medicine.” [Id. at 37, Pg ID
557]. Cirillo responded by saying, “We're going to
need to find out . . . . Or you can tell me if you
remember.” [Id.]. Proctor replied, “16
something. I don't know what it was. I don't know who
I can find out from.” [Id.]. Cirillo asked,
“16 what, thousand?” [Id.]. Proctor
replied, “Yeah.” [Id.].
Cirillo asked Proctor about the condition of the RV when
Proctor purchased it. [Id. at 39, Pg ID 559].
Proctor stated that he had done some work on the RV
“[b]ut it was in decent condition.”
[Id.]. Next, Cirillo asked, “Was any of this
damage on there before?” [Id.]. Proctor
responded, “No.” [Id.].
Cirillo asked Proctor about any repairs that he had made
after he purchased the RV. [Id. at 41, Pg ID 561].
Proctor responded that he had made minor cosmetic changes
with the electricity, had worked on the slides, and had
gotten a new hydraulic pump. [Id. at 41-43, Pg ID
GEICO denied Proctor's claim. Initially, GEICO sent two
letters in February 2015, one to Proctor and another to his
previous attorney, making a reservation of rights under the
contract because Proctor “may have breached condition
13 in Part V” of his contract dealing with fraud and
misrepresentation. [DE 41-11 at 1-4, Pg ID 646-49]. Then, on
June 15, 2015, GEICO sent a letter to Proctor denying his
claim because after investigation, GEICO determined that the
claimed damages were “pre-existing damages” that
“occurred before the RV was listed on the
policy.” [Id. at 5, Pg ID 650].
filed a lawsuit alleging breach of contract and bad faith in
violation of the Kentucky Unfair Claims Settlement Practice
Act (“UCSPA”) in Kentucky state court on June 1,
2017. [DE 1-1 at 5-9]. In the state court complaint, Proctor
asserted that “The Keystone RV had a market value of
approximately $6, 000.00 immediately prior to this
damage.” [Id. at 6]. GEICO answered in the
state court action on June 22, 2017. [Id. at 10-15].
state court record indicates that GEICO served
interrogatories on Proctor. In response to an interrogatory,
Proctor stated that
The approximate value of the RV pre-accident was likely
between $10, 000 and $12, 000, based upon the purchase price
paid by the Plaintiff ($7, 000.00) and the additional
improvements made by the Plaintiff (installation of a
hydraulic pump at about $3, 500.00, repair of A/C and furnace
at about $750.00, and various small repairs and upgrades to
[DE 1-3 at 4]. Additionally, Proctor admitted that he was
seeking to recover damages in excess of $75, 000.
[Id. at 10]. As a result, GEICO removed the matter
to this Court pursuant to 28 U.S.C. §§ 1441 and
1446. [DE 1].
30, 2018, a deposition was held where Proctor testified about
the condition of the vehicle at the time of purchase and the
purchase price. Initially, it appears that Proctor was
confused about the date he purchased the RV. [See DE
49-1 at 1-3, Pg ID 741-43]. Proctor explained that he takes
prescription medications, specifically Warfarin and Lyrica,
that affect his memory. [Id. at 3, Pg ID 743].
Still, Proctor indicated that he could understand and
accurately respond to the questions during the deposition.
[Id. at 3-4, Pg ID 743-44].
the deposition, Proctor testified that he looked at the RV
twice before purchasing it but did not have it inspected or
appraised. [DE 41-10 at 2-4, Pg ID 635-37]. Proctor also
asserted that he was not aware that the RV was damaged by a
fire in 2013 until after the accident in January 2015.
[Id. at 2, Pg ID 635]. Additionally, Proctor
testified that he purchased the RV for $7, 000 but claimed
that the RV had a book value of “23 or 25
[thousand]” at the time of purchase. [Id. at
4, Pg ID 637]. Finally, Proctor testified that he learned
about the RV's salvaged title when completing the
registration paperwork. [Id.].
was also asked about improvements that he made to the RV
during the deposition. Proctor was asked,
Now, in your answers to interrogatories, you said you - and I
asked you this earlier - I said, [d]id you ever install a
hydraulic pump? And you said, No.
Now, I'm looking at your answers to interrogatories, and
you say you installed a hydraulic ...