Craig, et al v. State Farm Fire Cslt, et al

* Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
United States Court of Appeals
Fifth Circuit
F I L E D
July 25, 2005
Charles R. Fulbruge III
Clerk
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 05-60110
Summary Calendar
STEVEN R. CRAIG, Individually and as Next Best Friend and
Natural Parent of Steven Craig, a Minor, and Sharon Craig,
a Minor; PAMELA S. CRAIG, Individually and as Next Best Friend
and Natural Parent of Steven Craig, a Minor, and Sharon Craig,
a Minor; STEVEN CRAIG, A Minor; SHARON CRAIG, A Minor,
PlaintiffS-AppellantS,
versus
STATE FARM FIRE AND CASUALTY COMPANY; OTHER UNKNOWN JOHN DOES,
Defendants-Appellees.
--------------------
Appeal from the United States District Court
for the Northern District of Mississippi
(CA No. 03-CV-400)
--------------------
Before DAVIS, SMITH and DENNIS, Circuit Judges
PER CURIAM:*
Plaintiffs Steven and Pamela Craig (“the Craigs”) appeal the
district courts order granting summary judgment for Defendant State
Farm Fire and Casualty Company (“State Farm”). Finding no error,
we affirm the district court’s order.

-- 1 of 4 --

No. 04-10594
-2-
I.
On December 16, 2002, the Craigs submitted a claim to State
Farm regarding a house fire at their residence in Coldwater,
Mississippi. During the investigation of the cause of the fire the
Craigs’ neighbor, Wanda McGrew, contacted State Farm and informed
its agent that the Craigs leased an apartment where they were
storing some of their personal property that they had claimed was
destroyed in the fire. The Craigs had not revealed this apartment
to State Farm. The Craigs do not dispute that they made
misrepresentations to the investigator regarding the existence of
their apartment. On April 14, 2003, State Farm denied the Craigs’
claim on the grounds that they misrepresented and concealed
material facts to State Farm during the investigation of the claim.
After the Craig’s misrepresentation came to light, the
National Insurance Crime Bureau (“NICB”) investigated the alleged
misrepresentations made by the Craigs. The NICB obtained a search
warrant, searched the Craig’s apartment, and found a number of
items that the Craigs alleged had been destroyed in the fire. The
Craigs were arrested and indicted and they pleaded guilty to
conspiracy to commit false pretenses.
State Farm denied the Craigs’ claim for coverage under the
insurance policy on the basis of the following language in the
policy:
Concealment or Fraud. This policy is void as to you and any other
insured, if you or any other insured under this policy has

-- 2 of 4 --

No. 04-10594
-3-
intentionally concealed or misrepresented any material fact or
circumstance relating to this insurance, whether before or afer a
loss.
After their claim was denied the Craigs filed the present
action against State Farm in Mississippi State Court, alleging
breach of the covenant of good faith and fair dealing, tortious
breach of an insurance contract, bad faith denial of an insurance
claim, negligence, and breach of fiduciary duties, malicious
prosecution, negligent and intentional infliction of emotional
distress, and fraudulent inducement. State Farm removed the case
to federal district court on the basis of diversity of citizenship
and moved for summary judgment, which the district court granted.
The Craigs timely appealed.
II.
We review a district court’s grant of summary judgment de
novo, applying the same standard as the district court. Blakely v.
State Farm Mut. Auto Ins. Co., 406 F.3d 747, 750 (5th Cir. 2005).
Under Federal Rule of Civil Procedure 56(c), a party is entitled to
summary judgment when, viewing the evidence in the light most
favorable to the non-moving party, the “pleadings depositions,
answers to the interrogatories, and admissions on file, together
with the affidavits, if any, show that there is not genuine issue
as to any material fact and that the moving party is entitled to
judgment as a matter of law.” Id. at 550-51 (quoting FED. R. CIV.
P. 56(c)).

-- 3 of 4 --

No. 04-10594
-4-
Because this case is before us on the basis of diversity
jurisdiction, we apply Mississippi’s substantive law. Erie R. Co.
v. Tompkins, 304 U.S. 64, 78-79 (1938); Blakely, 406 F.3d. at 751.
Under Mississippi law, for an insurance company may avoid a policy
based on a concealment clause like the one at issue in this case
when it establishes that the insured made statements that were: (1)
false; (2) material; and (3) knowing and willfully made. Clark v.
Aetna Cas. & Sur. Co., 7789 F.2d 242, 245 (5th Cir. 1985).
After a review of the record and the parties briefs we find no
issue as to any material fact that the Craigs knowingly made false
and material misstatements to the State Farm. We therefore affirm
the district court’s grant of summary judgment for State Farm for
essentially the reasons as well-stated in its memorandum opinion
and order.
AFFIRMED.

-- 4 of 4 --