The second fire occurred in late April of the next year. The family still lived in the apartment and a neighbor noticed a fire in their home and called the fire department to put it out.

The Durasevics filed a second insurance claim, seeking about $330,000 for the additional damage.

In reviewing the new claim, Grange hired a private investigator who determined that someone had intentionally started the April fire.

Grange said that it also discovered that one of the Durasevics' sons, Niko, had been at the house the night of the fire.

To determine how much coverage, if any, it should provide, Grange asked the adult family members to submit to examinations under oath (“EUOs”) and asked Doka and Hana Durasevic to provide tax, bank, phone, and Facebook records.

Niko and daughter-in-law Samantha refused to make themselves available for a full examination. And the Durasevics never gave Grange the requested documents.

Grange denied coverage. Doka and Hana Durasevic filed suit against Grange.

The insurer moved for summary judgment, asserting that the Durasevics had not honored the conditions in the policy and could not recover.

The U.S. District Court for the Eastern District of Michigan granted Grange's motion, and the Durasevics appealed to the Sixth Circuit.

The Sixth Circuit's Decision

The Sixth Circuit affirmed, ruling that, as a matter of law, “Grange offered ample reasons for denying coverage.”

In its decision, the circuit court began with the EUOs.

It pointed out that the Grange policy required, as a precondition of coverage, that “the insured person . . . submit to examinations under oath.” The circuit court added that the policy defined “insured person” to include the person named in the insurance agreement and that person's relatives who lived in the same house, meaning that the Durasevics son Niko and daughter-in-law Samantha counted as insured persons. “Yet,” the Sixth Circuit noted, “they failed to appear for examinations under oath after repeated requests that they do so.”

The circuit court said that it could not be reasonably denied that interviewing them served a “material purpose” in Grange's review of the Durasevics' claim. As the Sixth Circuit noted, “Grange suspected that Niko intentionally set the fire, prompting the need to talk to him about what he saw that evening when he was at the house.” The circuit court added that although the policy permitted the Durasevics to recover if their son Niko committed arson acting alone, that did “not alleviate the need to find out how the fire started or whether Doka and Hana knew about or had connections to Niko's actions.” The circuit court referenced the policy's joint obligations provision, which made their son and daughter-in-law's “failures to act . . . binding” on the rest of the Durasevics.

The violation of this condition precedent, the Sixth Circuit held, precluded recovery.

Finally, the circuit court ruled that the Durasevics also could not recover because they failed to give Grange the information it requested, “thus failing to live up to that independent end of the insurance bargain.” The case is Durasevic v. Grange Ins. Co., Nos. 18-2035/2120 (6th Cir. July 11, 2019).