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Lockhart v. State Farm Mutual Automobile Insurance Co.

February 16, 2010


The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge


Pending before the Court is DEFENDANT STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT PURSUANT TO FED. R. CIV. P. 56 (Document No. 34). The motion has been thoroughly briefed by both State Farm and Lockhart (Document Nos. 35, 45). The parties have fully stated their respective positions regarding the Concise Statement of Material Facts and have submitted numerous exhibits (Document Nos. 36, 38, 39, 40, 43, 44, 46, 47, 50). The Court heard oral argument on January 28, 2010. The motion is ripe for disposition.

Factual Background

This is an automobile insurance coverage dispute. At the time of the incident, Tom Lockhart was 55 years old and had been married to his wife, Rhonda, for thirty-six years. They have three grown daughters, one of whom is a police officer. Lockhart had been employed as a foreman for Onex Corporation for the past fifteen years and his gross annual income was well in excess of $100,000. Onex paid Lockhart $747 per month for the use of his personal truck.

On Sunday morning, May 20, 2007, Lockhart reported that his 2006 Dodge Ram Pickup Truck had been stolen from the parking lot of a Giant Eagle supermarket in White Oak, Pennsylvania. According to Lockhart, he had parked the truck in an employee parking area along the side of the store next to a guard rail, shopped for approximately 30-45 minutes, and then discovered that the truck was missing. He immediately reported the theft to the police.

Sergeant Robert Loera responded to the scene and prepared an incident report. In relevant part, the Report stated:

Mr. Lockhart said that he had secured the truck, and he was in possession of the key(s). No broken glass was left at the scene. A few supermarket employees attending to their duties stated that they had seen nothing out of the ordinary.

The incident report also noted Lockhart's description that the truck had 20" wheels, dual hood scoops and other options, and multiple chrome accessories. Exhibit AE 11.

Lockhart had purchased the truck in May 2006. He had a practice of purchasing a new truck on roughly an annual basis. He had visited several dealers in the weeks prior to the reported theft in an effort to trade in the truck for a new vehicle. In December 2006, Lockhart had taken the truck in for service with a complaint about its steering and was informed that nothing could be done to remedy that situation.

Lockhart submitted a claim to State Farm on May 21, 2007. His automobile insurance Policy, #0139827-A01-38N, covered theft but excluded coverage if the vehicle was stolen "by or at the direction of an Insured." Lockhart purchased "GAP insurance" for the difference between the cash value of the vehicle and the amount owed on the note, which was approximately $10,000 at the time of the incident.

Paragraph 11 of the Policy provides as follows:

11. Concealment or Fraud

There is no coverage under this policy if you or any other person insured under this policy has made false statements with the intent to conceal or misrepresent any material fact or circumstance in connection with any claim under this policy.

On May 22, 2007, State Farm claims representative Jackie Rocha spoke with Lockhart. The claim file reflects that Lockhart told Rocha that the vehicle was locked and that there were two sets of keys -- one in Lockhart's possession and the other taped underneath the center console of the truck. State Farm's records also reflect that Lockhart had made a prior vehicle theft claim on January 3, 2003. State Farm had paid the 2003 theft claim without conducting any investigation.

On May 24, 2007, State Farm's Special Investigations Unit ("SIU") accepted the file as a "partial referral to interview [the insured] and clarify facts of attempted trade in, conduct scene investigation and follow up with law enforcement to determine if further investigation is warranted." Dom Pelligrino, the manager of the SIU, assigned Larry Kletter to undertake the investigation.

The claim file reflects that on May 24, 2007 Kletter spoke to State Farm agent Bob Rodgers, who related Lockhart's history as a State Farm policyholder since 2000 and described Lockhart as a "mean character." Kletter also spoke to Ms. Rocha, who stated that Lockhart had been "overly nice" in their conversation and had explained that a "key was hidden in the console but no-one knew [the] key was there and no-one would ever find it."

On May 25, 2007, Kletter contacted Lockhart and informed him of the investigation. They agreed to meet on May 30, 2007 to discuss the matter. Kletter obtained information about the truck and learned that it was equipped with a Sentry Key Theft Deterrent System. Kletter also learned that on May 17, 2007 Lockhart had discussed figures for the trade of his truck on a new 2007 Dodge Ram truck.

On May 30, 2007, Kletter interviewed Lockhart. A transcript of the interview was provided. Among other topics, they discussed the circumstances surrounding the 2003 vehicle theft claim. According to Lockhart, that vehicle (a 2001 Ford truck) had been locked and parked at his workplace overnight while he attended a motorcycle "swap meet" in Chillicothe, Ohio. When Lockhart returned the next day, the truck was gone. There were no signs of forced entry. Lockhart had approximately $4,000 or $5,000 in GAP coverage on that vehicle. Turning to the 2007 claim, Kletter asked Lockhart whether he recalled what he had done on the day prior to the theft (eleven days prior to the date of the interview). Lockhart answered "No." Lockhart estimated that he had shopped in the Giant Eagle for thirty minutes on the morning of the loss. Kletter asked whether Lockhart had locked the truck before he went into the store. The following exchange ensued:

A: (by Lockhart): "I want to say yes. That's ... yes.

Q: (by Kletter):"Okay, because ...and I know with the remote, I always push the button.

A: It's my habit.

Q: Okay, so you.. When you park the car you ...

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