Lie to Your Insurer in Louisiana and You Lose Everything


In Louisiana an Intentional Misrepresentation on an Application Supports Rescission of Policy

Insurance is a business of utmost good faith. Both the insured and the insurer owe to the other an obligation to do nothing that will deprive the other of the benefits of the contract. In Geovera Specialty Insurance Company v. Michael Odoms, No. 19-30971, United States Court of Appeals for the Fifth Circuit (November 5, 2020) Michael Odoms lied about his wife’s previous bankruptcy and, as a result, his insurer rescinded the policy after a fire one month after issuance of the policy.


Odoms owned several rental properties, including one he purchased in 2018 in Marrero, Louisiana. When he applied to GeoVera Specialty Insurance Company for insurance coverage on that house, Odoms represented that neither he nor his spouse Ericka Odoms had “been involved in a . . . bankruptcy during the [previous] 5 years.”

Odoms bought a house located at 6565 Benedict Drive in Marrero, Louisiana (the “Benedict house”). The same day, Odoms applied for tenant-occupied homeowners’ insurance through Susan Angelica Insurance Agency (“SAIA”).  After GeoVera filed an action seeking declaratory relief and rescission of the policy, the district court entered summary judgment in favor of GeoVera based on its finding that Odoms knowingly misrepresented a material fact on the insurance application in failing to disclose his wife’s bankruptcy. The district court awarded declaratory relief and allowed GeoVera to rescind Odoms’s policy.

After Odoms signed and submitted the insurance application for the Benedict house, GeoVera promptly issued the policy. Exactly one month later, on July 21, 2018, the Benedict house burned down. Odoms then filed an insurance claim with GeoVera, which required him to testify via two examinations under oath (“EUO”). During an EUO he admitted that various applications contained the same bankruptcy-related question as the Benedict house application and were all answered in the negative. Odoms testified that he was aware of Ericka’s bankruptcy when he applied for those insurance policies. Odoms conceded that if Ericka “was involved in a bankruptcy during 2010 to 2015,” that would have made his responses to the applications’ bankruptcy question inaccurate.

During her EUO, Erica testified that Odoms knew about her bankruptcy. Ericka further stated that Odoms’s answer to the bankruptcy question was inaccurate.

GeoVera informed Odoms that it had determined that Odoms had misrepresented Ericka’s bankruptcy status on his insurance application. GeoVera also concluded that Odoms had falsely represented that the Benedict house was connected to public utilities. (The house apparently was not serviced by gas or running water at the time.)


Under Louisiana law, that does not follow the Marine Rule that allows rescission for an innocent misrepresentation, to rescind an insurance policy on misrepresentation grounds, the insurer must prove that:

(1)           the insured made a false statement;

(2)           the false statement was material; and

(3)           it was made with intent to deceive. [Willis v. Safeway Ins. Co. of La., 42,665 (La. App. 2 Cir. 10/24/07), 968 So. 2d 346, 350].

Finding that GeoVera sufficiently proved these three elements as to Odoms’s answer to the policy application’s bankruptcy question, the district court entered summary judgment in favor of GeoVera.

Odoms’s own testimony, confirmed by Ericka’s EUO testimony, demonstrates that, when he completed the policy application in 2018, Odoms knew that Ericka’s Chapter 13 bankruptcy case remained pending until the bankruptcy court discharged her debts in December 2015. There was no genuine dispute of material fact that Odoms misrepresented the existence of Ericka’s bankruptcy to GeoVera.

Odoms contends that, assuming his response to the bankruptcy question was false, he nonetheless did not intentionally deceive GeoVera about Ericka’s bankruptcy status.

Intent to deceive must be determined from surrounding circumstances indicating the insured’s knowledge of the falsity of the representations made in the application and his recognition of the materiality of his misrepresentations. Such circumstances exist here. The same record that substantiates the falsity of Odoms’s misrepresentation about Ericka’s bankruptcy demonstrates the insured’s knowledge of the falsity because Odoms’s and Ericka’s testimony make clear that Odoms knew that Ericka’s bankruptcy continued until late 2015 and that his answer to the application’s bankruptcy question was therefore false.

Further, the record showed circumstances which create a reasonable assumption that Odoms recognized the materiality of his misrepresentation. Before completing the application for coverage of the Benedict house, Odoms submitted six separate policy applications to GeoVera, for other properties. On each, Odoms made the same representation that neither he nor his spouse had been involved in a bankruptcy in the preceding five years. The district court found that this fact demonstrated his intent to deceive GeoVera.

Odoms’s affidavit seeking to state a genuine issue of fact iconflicted with his prior testimony where he admitted that his answer to the bankruptcy question was inaccurate. He cannot create a genuine issue of fact sufficient to survive summary judgment simply by contradicting his or her own previous sworn testimony without explaining the contradiction or attempting to resolve the disparity.

The Fifth Circuit concluded that the circumstances create a reasonable assumption that Odoms recognized the materiality of his answer. Odoms , grasping at straws, contended that GeoVera did not prove that it would have declined the policy application had it known about Ericka’s bankruptcy. However, in a sworn declaration, Joseph Belton II, GeoVera’s claim manager, explained GeoVera’s underwriting rules and that, GeoVera would have denied Odoms’s application if he had answered “yes” to the bankruptcy question. In the absence of evidence to the contrary, there is no genuine dispute that, based on Belton’s declaration, Odoms’s misrepresentation was material.

GeoVera demonstrated that Odoms knowingly misrepresented Ericka’s bankruptcy status and that his misrepresentation was material.


GeoVera, by completing a thorough investigation, including the examinations under oath of both insureds, established that the policy was acquired based upon a misrepresentation of a material fact – denying the existence of a bankruptcy in the five years before the date of the application. The fact that the fire – to a house without gas or electricity – was an obvious reason for an insurer to be concerned about a potential arson-for-profit that resulted in the EUOs of the insureds. Because GeoVera was able to prove the material misrepresentations there was no need to deal with the reason for the fire only a month after the issuance of the policy.

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals. last two issues of ZIFL here. 

Go to Barry Zalma videos at at

Read posts from Barry Zalma at

Listen to the Podcast: Zalma on Insurance on Insurance 

Go to Barry Zalma on YouTube-

Go to the Insurance Claims Library – Version of ZIFL, it’s Free! – 


This entry was posted in Zalma on Insurance. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.