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Pennsylvania District Court Holds Materiality Does Not Require Fraud | Cozen O'Connor


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A District Court in the Eastern District of Pennsylvania recently held that an insured’s submission of  invoices altered to inflate replacement costs for water-damaged inventory constituted material misrepresentations. The court granted the insurer’s motion for summary judgment on its claims for declaratory judgment and violation of the Pennsylvania Insurance Fraud Act; however, the court held that the altered invoices fell short of satisfying the elements of common law fraud. 
In 
State Auto Property & Casualty Insurance Co. v. Sigismondi Foreign Car Specialists, Inc., No. 19-5578 (E.D. Pa. Apr. 12, 2021), the insurer, State Auto, brought an action seeking a declaration of its rights and obligations under the policy issued to the defendant insured, an auto repair shop, Sigismondi. Plaintiff also brought claims against Sigismondi for violations of Pennsylvania’s Insurance Fraud Act, common law fraud, ....

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