Darryl Kelly v. Allstate Vehicle and Property Insurance Co.

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued May 16, 2024
Decided May 20, 2024
Before
FRANK H. EASTERBROOK, Circuit Judge
THOMAS L. KIRSCH II, Circuit Judge
CANDACE JACKSON-AKIWUMI, Circuit Judge
No. 23-2951
DARRYL KELLY,
Plaintiff-Appellant,
v.
ALLSTATE VEHICLE AND PROPERTY INSURANCE CO.,
Defendant-Appellee.
Appeal from the United States
District Court for the Southern
District of Indiana, Terre
Haute Division.
No. 2:22-cv-00123-MPB-MJD
Matthew P. Brookman, Judge.
O R D E R
Two fires occurred at Darryl Kelly’s home while it was insured by Allstate Vehi-
cle and Property Insurance Company. A preliminary investigation concluded that both
fires had been set intentionally, so Allstate required him to provide an “examination un-
der oath.” Kelly sat for two sessions of questions. The policy required him to review the
transcripts and verify the answers’ accuracy under oath before filing any suit.
Kelly reviewed one set of answers and verified their accuracy, but he filed this
suit in state court in January 2022 before receiving the transcript of the second session.

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No. 23-2951 Page 2
He sued the wrong defendant and did not serve Allstate’s registered agent with pro-
cess. When Allstate discovered this, it alerted Kelly to the errors.
He filed an amended complaint, naming his actual insurer, the morning of March
1, 2022. He signed and mailed the second transcript that afternoon. Allstate removed
the suit under 28 U.S.C. §1332, and the district court granted summary judgment in its
favor after concluding that Kelly had not fulfilled his contractual duty to sign under
oath before suing. 2023 U.S. Dist. LEXIS 234525 (S.D. Ind. Sept. 12, 2023).
The district court concluded that the amended complaint relates back to the first
under Fed. R. Civ. P. 15 and its counterpart in Indiana, so that the verification of the sec-
ond transcript was about six weeks late. Kelly contests that decision. We need not de-
cide whether it was correct, because, even if we treat March 1, 2022, as the filing date,
the suit still began before Kelly verified the truth of the statements made at the second
examination—and a considerable time before Allstate had an opportunity to review and
act on those statements. (Allstate contends that it does not finish considering the valid-
ity of a claim until receiving the sworn transcript.)
According to Kelly, he was entitled to disregard the express contractual duty to
verify the answers before suing. He depicts the requirement as a “cooperation clause,”
whose violation may be overlooked if the delict was not material. But the Supreme
Court of Indiana has ruled otherwise when addressing a clause in an insurance policy
specifying a client’s duties after loss. Morris v. Economy Fire & Casualty Co., 848 N.E.2d
663, 666 (Ind. 2006). Morris, like this suit, dealt with the effect of a clause requiring the
insured to sit for an examination and verify the answers under oath. Foster v. State Farm
Fire & Casualty Co., 674 F.3d 663, 667 (7th Cir. 2012), follows Morris in another examina-
tion-under-oath case.
We find it hard to understand why Kelly did not dismiss his suit, sign under
oath, wait for Allstate’s decision, and then file a new suit (if necessary). If, as Kelly says,
Allstate was dilatory in providing the transcript of the second examination, Indiana
would have extended the time available for suit. See State Farm Mutual Automobile Insur-
ance Co. v. Jakubowicz, 56 N.E.3d 617 (Ind. 2016); Wert v. Meridian Security Insurance Co.,
997 N.E.2d 1167 (Ind. App. 2013). But Kelly insists on proceeding with this suit, and we
agree with the district court that the policy forbids that strategy.
AFFIRMED

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