United States Court of Appeals
For the First Circuit
____________
Nos. 10-1063, 10-1064
JAMES F. MILES,
THERESA B. MILES,
Plaintiffs, Appellants,
v.
GREAT NORTHERN INSURANCE COMPANY,
Defendant, Appellee.
____________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
____________
Before
Torruella, Ripple,* and Lipez, Circuit Judges.
____________
Roger J. Brunelle, with whom Sbrogna & Brunelle LLP was on
brief, for appellants.
Mark W. Corner, with whom Riemer & Braunstein LLP was on
brief, for appellee.
March 10, 2011
*
Of the Seventh Circuit, sitting by designation.
RIPPLE, Circuit Judge. James and Theresa Miles
originally brought this action against Great Northern Insurance
Company in Massachusetts Superior Court. They sought to obtain
coverage for a fire loss to their home and asserted claims for
breach of contract and unfair insurance practices. Great
Northern removed the action to the district court and filed
counterclaims for breach of contract and unjust enrichment.1 The
parties cross-moved for summary judgment; at this point, the
Mileses abandoned certain of their unfair insurance practices
claims. The district court denied summary judgment on the breach
of contract claims but granted summary judgment to Great Northern
on the remaining unfair insurance practices claims. The breach
of contract and unjust enrichment claims then were tried to the
bench, and the district court concluded that only the plaintiffs,
Mr. and Mrs. Miles, had breached the contract. The court
therefore entered judgment in favor of the defendant, Great
Northern.2
1
The jurisdiction of the district court was based on 28
U.S.C. § 1332.
2
The district court entered judgment in favor of Great
Northern on all claims, including counterclaims for advance
payments, subrogation and unjust enrichment. On appeal, neither
party challenges the ruling on the unjust enrichment claims.
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Theresa Miles now seeks review of the decision of the
district court that she and her husband, James Miles, breached
their contract with Great Northern Insurance Company.3 Theresa
Miles contends that the district court improperly imputed the
conduct of her husband to her and, therefore, incorrectly ruled
that she had breached the contract with Great Northern. Because
this issue presents an unresolved interpretation of state law, we
decide this case on an alternative ground. We hold that Theresa
Miles independently breached the contract with Great Northern
and, therefore, is barred from recovery under the insurance
policy. Accordingly, we affirm the judgment of the district
court.4
3
On January 15, 2010, we ordered that the appeal of James
Miles be consolidated with that of his wife for purposes of
briefing and oral argument. Therefore, James Miles joins the brief
of his wife, Appellant Theresa Miles, under Federal Rule of
Appellate Procedure 28(i). James Miles asserts on appeal that, if
we hold that Theresa Miles is entitled to recover under the policy,
we then must reverse the judgment entered against him on the
counterclaims because it was predicated upon the district court’s
conclusion that Theresa Miles was barred from recovery based upon
her husband’s misconduct.
4
Our jurisdiction is predicated on 28 U.S.C. § 1291.
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I
BACKGROUND
A. Facts
James and Theresa Miles obtained a comprehensive home
insurance policy from Great Northern for their home in Rehoboth,
Massachusetts. The policy included protection for fire loss.
Although Theresa Miles alone held title to the property, both
James and Theresa Miles were named as insureds under the policy.
According to the terms of the policy, if the Mileses
filed a claim, they were obligated to submit to an examination
under oath and to deliver to Great Northern, within sixty days of
request, proof of loss, along with any supporting documentation.
The policy also included a “[c]oncealment or fraud” clause, which
stated, “This policy is void if you or any covered person has
intentionally concealed or misrepresented any material fact
relating to this policy before or after a loss.” Finally, the
policy included a clause, which stated, “Coverage applies
separately to each covered person.”
In the early morning on October 17, 2004, a fire
occurred at the Mileses’ Rehoboth home. The subsequent police
investigation indicated that the fire had been set intentionally
because accelerants were found in the house and there was no sign
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of forced entry. James Miles was named as a “person of interest”
in the investigation.
The Mileses reported the fire to Great Northern on
October 18, the day after the fire occurred, and the insurance
company initiated an investigation. From the start, the Mileses
were uncooperative. Both James and Theresa Miles refused to
answer Great Northern’s interrogatories about the loss and their
financial affairs or to cooperate otherwise during the
examinations under oath. Although Theresa Miles appeared for an
examination under oath, she refused, at the direction of her
husband, who purported to act as her attorney, to answer Great
Northern’s questions. The Mileses did not turn over documents
related to their home security system or to their financial
affairs until well after Great Northern had denied coverage.
Although Great Northern had advanced living expenses to the
Mileses during the investigation, it ultimately decided to deny
coverage under the policy because of the Mileses’ failure to
cooperate.
B. District Court Proceedings
After the Mileses’ suit for breach of contract and
unfair insurance practices was removed to the district court,
Great Northern filed counterclaims for breach of contract and
unjust enrichment. The parties cross-moved for summary judgment;
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the Mileses eventually abandoned certain of their unfair
insurance practices claims relating to the denial of coverage and
breach of the covenant of good faith and fair dealing. The
district court granted summary judgment in favor of Great
Northern on the remaining unfair insurance practices claims but
denied summary judgment on the breach of contract claims.
Additionally, the district court considered whether James Miles’s
conduct during the claims adjustment process could be imputed to
Theresa Miles. The court ruled that “the express language of
[the policy] unambiguously bars coverage for an innocent co-
insured spouse through the inclusion of the term ‘any covered
person’ and, accordingly, it will be so construed. . . . Thus,
Mr. Miles’s alleged breach will be imputed to his wife.” Miles
v. Great N. Ins. Co., 656 F. Supp. 2d 218, 224 (D. Mass. 2009)
(“Miles I”).
The parties tried the breach of contract and unjust
enrichment claims to the bench. The district court ruled against
the Mileses and in favor of Great Northern, concluding that both
“James and Theresa Miles are found to have breached their
contractual duty to cooperate with Great Northern Insurance
Company, thereby discharging Great Northern from its obligations
to provide coverage under the Policy.” Miles v. Great N. Ins.
Co., 671 F. Supp. 2d 231, 241 (D. Mass. 2009) (“Miles II”).
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II
DISCUSSION
Theresa Miles now contends that the district court
erred by concluding that James Miles’s conduct could be imputed
to her under Massachusetts law. Because resolution of this issue
would require that we address a question of state law upon which
the courts of Massachusetts have not yet had occasion to speak,
we prefer to base our affirmance of the district court’s judgment
on an independent alternative ground.5 The district court’s
factual findings require the conclusion that, independent of any
wrongdoing on the part of her husband, Theresa Miles breached her
contract with Great Northern and, therefore, is barred from
recovery under the insurance policy.
Massachusetts courts have held that “a wilful,
unexcused refusal to submit to an examination under oath . . .
constitutes a material breach of the insurance contract
discharging the insurer’s liability under the contract.”
Lorenzo-Martinez v. Safety Ins. Co., 790 N.E.2d 692, 695–96
(Mass. App. Ct. 2003); see Mello v. Hingham Mut. Fire Ins. Co.,
656 N.E.2d 1247, 1250 (Mass. 1995). In the course of rendering
its decision, the district court made several findings of fact
5
We may affirm a district court’s judgment on any ground
supported by the record. InterGen N.V. v. Grina, 344 F.3d 134, 141
(1st Cir. 2003).
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that require the conclusion that Theresa Miles, by her own
misconduct, independently breached the insurance contract with
Great Northern. The court found that, although the contract
explicitly required her cooperation,6 Theresa Miles refused to
respond to questions or turn over requested documents during her
examination under oath. Miles II, 671 F. Supp. 2d at 236
(Finding # 33). Additionally, although Great Northern’s attorney
followed up with a letter addressed to both of the Mileses, again
requesting the documents and information that the insureds
previously had failed to provide, the Mileses continued to
withhold certain documents relevant to the investigation.
Massachusetts courts have stated that they see “no basis for a
distinction between an obligation to submit to a reasonably
requested examination under oath and the duty to produce
documents pertinent to the claimed loss.” Rymsha v. Trust Ins.
Co., 746 N.E.2d 561, 563-64 (Mass. App. Ct. 2001) (concluding
that financial documents, including tax returns, were relevant to
6
In its opinion, the district court noted that the relevant
portion of the insurance policy stated: “We have the right to
examine under oath, as often as we reasonably require, you, family
members, and other members of your household. We also ask you to
give a signed description of the circumstances surrounding a loss
and your interest in it, and to produce all records and documents
we request and permit us to make copies.” Miles v. Great N. Ins.
Co., 671 F. Supp. 2d 231, 234 (D. Mass. 2009).
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the insurer’s investigation of a theft claim when claimant was
suspected of staging the loss).
It is clear from the district court’s findings that
Theresa Miles independently refused to cooperate with Great
Northern. Indeed, nothing in the record indicates that Theresa
Miles disputed the district court’s findings of fact pertaining
to her failure to cooperate with Great Northern’s investigation.
She maintains, however, that, because there was no finding by the
district court that her conduct prejudiced Great Northern in its
investigation, she should not be barred from recovery.
There are two problems with this argument. First,
Theresa Miles’s interpretation of the district court’s finding is
not a fair one. The district court concluded that, “[d]ue to the
Miles’ failure to answer questions and provide the requested
documentation, Great Northern was unable to complete its
investigation as to the cause of the fire and was unable to
eliminate James Miles as the person who intentionally caused the
fire or directed another person to cause the fire.” Miles II,
671 F. Supp. 2d at 238 (Finding # 53). We think that this
language is read most appropriately as including a finding that
Theresa Miles’s complicity in the couple’s pattern of non-
cooperation was an integral part of the activity that thwarted
Great Northern’s investigation. Second, the general rule is that
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an insurer may not disclaim coverage by virtue of an insured’s
breach of its duty to cooperate absent a showing of prejudice.
See Boffoli v. Premier Ins. Co., 880 N.E.2d 826, 829 (Mass. App.
Ct. 2008). Nevertheless, the Massachusetts courts recognize “a
limited exception to the prejudice requirement in those cases
where there was a wilful and unexcused refusal of the insured to
comply with an insurer’s timely request for an examination under
oath.” Id. Therefore, if Theresa Miles willfully and without
excuse refused to comply with the insurer’s reasonable request
for an examination under oath, we may affirm, even without a
determination of prejudice, on the ground that Theresa Miles’s
behavior constituted an independent material breach of the
contract.
The Massachusetts standard for determining whether an
insured’s failure to comply with an examination under oath was
willful and unexcused is whether the insured “had an excuse that
relieved [her] from submitting to an examination under oath.”
Lorenzo-Martinez, 790 N.E.2d at 696. In Hanover Insurance Co. v.
Cape Cod Custom Home Theater, Inc., 891 N.E.2d 703 (Mass. App.
Ct. 2008), the court held that the insured’s failure to appear,
nonresponsiveness in material respects at examinations and
reluctance to produce documents requested in conjunction with the
examination, see id. at 704, constituted “intentional
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obstructionism in connection with the examination under oath
[and] thwarted the insurer’s legitimate efforts to investigate
the claim expeditiously,” id. at 707–08. In refusing to answer
questions and provide the requested documentation to Great
Northern, Theresa Miles failed to comply with the insurer’s
reasonable request for an examination under oath and most
certainly exhibited the obstructionism that, under Massachusetts
law, constitutes a willful and unexcused failure to comply with
her obligations.
Although appellate courts are reluctant to decide mixed
questions of law and fact in the first instance,7 we have
recognized that this general hesitancy must admit of some
exceptions. In particular, when no further development of facts
would be required in order to resolve the mixed question, a
7
See, e.g., United States v. Downs-Moses, 329 F.3d 253, 264-
65 (1st Cir. 2003) (recognizing that claims of ineffective
assistance of counsel “usually present mixed questions of law and
fact, and should be addressed at the district court level in the
first instance”); Barbour v. Browner, 181 F.3d 1342, 1345 (D.C.
Cir. 1999) (“Like the mine run of mixed questions, therefore, it
should be resolved in the first instance by a jury . . . .”);
Garrett v. Higgenbotham, 800 F.2d 1537, 1539 (11th Cir. 1986)
(characterizing the question as to whether a channel is “narrow” as
a mixed question of fact and law and, therefore, one that the
appellate court was “poorly situated to decide in the first
instance”). But see Dyer v. Calderon, 151 F.3d 970, 979 (9th Cir.
1998) (“Because implied bias is a mixed question of law and fact
reviewable de novo, there is no need to remand to the district
court for consideration of this issue in the first instance.”
(citation omitted)).
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remand is neither necessary nor prudent. See AIDS Action Comm.
of Mass., Inc. v. Mass. Bay Transp. Auth., 42 F.3d 1, 7 (1st Cir.
1994) (“This rule furthers the interest of judicial economy by
avoiding the remand of a question over which we eventually will
exercise full review . . . .”); see also Williams v. Poulos, 11
F.3d 271, 280-81 (1st Cir. 1993) (“We recognize that it is not
ordinarily the province of appellate courts to make findings of
fact or to resolve, in the first instance, mixed questions of law
and fact. Yet, where only one resolution of a predominantly
factbound question would, on a full record, be sustainable,
courts of appeals can, and often should, decline to remand where
there has been an error committed.”); Societe des Produits
Nestle, S.A. v. Casa Helvetia, Inc., 982 F.2d 633, 642 (1st Cir.
1992) (declining to remand where, once the court of appeals
decided the correct rule of law, the district court’s preexisting
findings of fact rendered the result obvious).
The present situation certainly fits squarely within
this well-established exception. The facts found by the district
court make clear that Theresa Miles’s refusal to cooperate in the
investigation of the fire was willful and unexcused and that her
actions constituted a material breach of the contract. Despite
our general reluctance to decide mixed questions of law and fact
in the first instance, given the facts in the record, we are
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entitled to conclude, at this stage, that Theresa Miles’s own
conduct constituted a material breach of the insurance contract
as a matter of law.
Conclusion
Theresa Miles materially breached her contract with
Great Northern. Her willful, unexcused refusal to comply with
Great Northern’s reasonable request for an examination under oath
constitutes a material breach of the insurance contract.
Accordingly, the judgment of the district court is affirmed.
AFFIRMED.
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