Mary Deguchi v. Allstate Insurance Company

MEMORANDUM

Plaintiffs Mary Deguchi and Ermanno Scalas (collectively “Plaintiffs”) appeal the adverse summary judgment grant in their action against Allstate Insurance Company (“Allstate”), arising out of the loss of their boat, the Princess Natasha, which sank under suspicious circumstances while en route from Hilo to Honolulu a few months after its purchase. Although Plaintiffs agreed to submit to an examination under oath (“EUO”) as required by their policy, each refused to provide information regarding their finances at the time of the loss. Plaintiffs sued Allstate, alleging breach of contract and bad faith. The district court awarded summary judgment to Allstate on all claims, and we affirm.

Even assuming the insurer must have some reasonable suspicion of fraud before seeking financial information from its insureds in an EUO, there was ample information in this case to raise suspicions and justify such an inquiry. Thus, the Plaintiffs’ failure to answer reasonable questions regarding their financial situation constituted a material breach of their obligations under the insurance contract, and summary judgment was properly awarded to Allstate. See Barabin v. AIG, 82 Hawai’i…