The opinion of the court was delivered by: MCLAUGHLIN
McLAUGHLIN, District Judge.
This is a suit on an insurance policy. Jurisdiction is based upon diversity of citizenship. 28 U.S.C. § 1332. The parties have filed motions under Fed.R.Civ.P. 56 for summary judgment. For the reasons developed below, the motions are denied.
Plaintiffs allege that on December 14, 1980, their home in Staten Island, New York was burglarized, and that $136,890 of their jewelry was taken. It is undisputed that the jewelry was specifically insured by defendant under Lloyd's All Risks Policy No. 882/71533 ("the policy"), which provided coverage in the event of loss due to burglary. The parties also agree that the policy was "in full force and effect" on the day of the purported burglary.
Defendant, however, alleges that plaintiffs' home was never burglarized or, that even if it was, the jewelry was not taken. Defendant regards the claim as a "scheme to defraud" and points to plaintiffs' failure to report the loss of their jewelry to the investigating police officer as evidence of their fraudulent intent.
In addition, defendant contends that plaintiffs have materially breached the terms of the policy by refusing to cooperate with the investigation of the claim. More particularly, defendant alleges that plaintiffs refused to give responsive answers to questions propounded during their examinations under oath, and that plaintiffs refused to produce certain tax returns that might indicate (1) plaintiffs' ownership of the jewelry, and (2) any casualty loss claimed by plaintiffs as a result of the burglary.
Plaintiffs counter by arguing that the terms of the policy do not require them to submit to examination under oath or to produce tax returns, but only to respond to reasonable requests by defendant in furtherance of the investigation -- a requirement with which they vigorously contend they have complied.
Rule 56 entitles a party to summary judgment if "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The opposing party, in order to prevail, "must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). In determining the motion the Court "cannot try issues of fact; it can only determine whether there are issues to be tried." American Mfrs. Mut. Ins. Co. v. American B'casting-Paramount Theatres, Inc., 388 F.2d 272, 279 (2d Cir.1967), cert. denied, 404 U.S. 1063, 92 S. Ct. 737, 30 L. Ed. 2d 752 (1972).
Plaintiff's Motion For Summary Judgment
Defendant has satisfied its burden under Fed.R.Civ.P. 56(e) by calling into question the alleged burglary of plaintiffs' home and their subsequent claim under the policy. Here, as in many insurance cases, the credibility of the insured is a key issue in assessing the validity of the claim. The general rule is that "the credibility of affiants raises a material issue that can only be resolved by a trial." Transway Finance Co., Inc. v. Gershon, 92 F.R.D. 777 (E.D.N.Y.1982).
In addition, as was the case in Gershon, knowledge of the events underlying the claim lies exclusively with the moving party, thus rendering summary judgment singularly inappropriate. Colby v. Klune, 178 F.2d 872, 874 (2d Cir.1949). Under these circumstances, the insurer should be allowed at trial to probe the perceptions and motivations of the plaintiff; and the trier of the facts should be afforded the opportunity to observe the witness' demeanor, particularly under cross-examination. Cross v. United States, 336 F.2d 431, 433 (2d Cir.1964); Chemical ...