                         RECOMMENDED FOR FULL-TEXT PUBLICATION
                             Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                    File Name: 14a0226p.06

                    UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT
                                  _________________


 RICHARD K. ROSE,                                      ┐
                                Plaintiff-Appellant,   │
                                                       │
                                                       │       No. 13-3887
       v.                                              │
                                                        >
                                                       │
 STATE FARM FIRE & CASUALTY COMPANY,                   │
                            Defendant-Appellee.        │
                                                       ┘
                        Appeal from the United States District Court
                       for the Southern District of Ohio at Columbus.
                    No. 2:10-cv-00874—George C. Smith, District Judge.
                                   Argued: June 18, 2014
                           Decided and Filed: September 8, 2014

                 Before: SILER, GILMAN, and GIBBONS, Circuit Judges.

                                    _________________

                                        COUNSEL

ARGUED: Don C.A. Parker, SPILMAN, THOMAS & BATTLE, PLLC, Charleston, West
Virginia, for Appellant. Gregory A. Harrison, DINSMORE & SHOHL LLP, Cincinnati, Ohio,
for Appellee. ON BRIEF: Elliot G. Hicks, Michael G. Gallaway, SPILMAN, THOMAS &
BATTLE, PLLC, Charleston, West Virginia, for Appellant. Gregory A. Harrison, DINSMORE
& SHOHL LLP, Cincinnati, Ohio, for Appellee.

                                    _________________

                                         OPINION
                                    _________________

      SILER, Circuit Judge. Richard Rose owned a house in Ohio that burned in a fire. An
investigation as to whether the fire was purposefully caused was ultimately inconclusive.
Nevertheless, State Farm Fire and Casualty Company (State Farm), the holder of Rose’s




                                              1
No. 13-3887              Rose v. State Farm Fire & Cas. Co.                           Page 2

homeowner’s insurance policies, denied his claim.          Rose initiated suit, alleging breach of
contract and bad faith. State Farm asserted that the policies were void because Rose concealed
material information about his financial status when he was interviewed after the fire. The
district court agreed and granted summary judgment to State Farm on both of Rose’s claims.
Because we find that a factual question remains as to whether Rose misled State Farm’s
investigators regarding his financial situation, we REVERSE and REMAND.

                                                  I.

       Rose owned a home in Bidwell, Ohio, that was insured by State Farm under a
homeowner’s policy that was in effect during the time of the fire. Although that policy covered
most of his personal property, Rose also had a Personal Articles Policy that covered two Rolex
watches. Collectively, these policies are the subject of this litigation.

       On the morning of January 7, 2009, a fire destroyed Rose’s home. The district court
summarized the information Rose provided about that morning:

       On that day, [Rose’s] wife left for work at her usual time, somewhere between
       7:45am and 8:20am. [He] remained in the home with his four dogs. As was his
       usual custom, [Rose] believes he probably smoked a cigarette while drinking his
       coffee. At some point, he drove his SUV down his driveway to see if his
       neighbor was available to talk about some work the neighbor was supposed to
       perform on [Rose]’s property. The neighbor was not at his shop, and between
       five and ten minutes later, [Rose] returned to his property. While he was in the
       front of the property, he noticed smoke coming out of the upstairs foyer window.
       Because his front door was locked, [Rose] ran around to the unlocked backdoor
       where he saw smoke and flames through the double windows of his kitchen area.
       [Rose] then ran to the sliding glass door at the back of the house where his dogs
       were sitting, ‘in a state of panic.’ (Rose Dep. at 95). He opened the door and let
       his dogs out; the oldest dog had to be pulled out from underneath the dining room
       table. At this point the dogs were about twelve feet from where [Rose] had seen
       flames in the window. Shortly thereafter, the windows over the kitchen sink blew
       out. [Rose] then called 911 and placed his dogs in his truck. He could not recall
       whether the dogs were covered in soot or smelled of smoke. [Rose]’s wife
       testified that the dogs smelled and required baths and that one dog was seen by
       the veterinarian.

Rose v. State Farm, No. 2:10-cv-874, 2012 WL 3583248, at *1 (S.D. Ohio Aug. 20, 2012).
Later that day, Rose reported to State Farm a fire loss with respect to his home and personal
No. 13-3887                    Rose v. State Farm Fire & Cas. Co.                                       Page 3

property.       He claimed $696,373.30 for the dwelling, $512,765.57 for damage to personal
property, $30,000 for additional living expenses, and $29,850 for one Rolex watch.

         State Farm assigned Rob Raker to investigate Rose’s claim. On January 20, 2009, Raker
took a recorded statement from Rose and his current wife, Shelly Rose. He also spoke with
Rose’s ex-wife, Kim Jividen, and gathered information by searching public records, such as
court and real estate records. Raker also retained a fire investigator. After visiting the remains
of the house, analyzing burn patterns, and consulting with electrical-engineering experts, the fire
investigator issued a report regarding the cause of the fire. The report found that the fire
originated in the kitchen area of the home, that electrical items did not appear to be the source of
the fire, and that neither smoking nor cooking was suspected as a cause. Although the report
indicated that non-reported human action could not be eliminated as a cause, it did not
specifically conclude that the fire was “incendiary,” i.e., deliberately ignited. At the conclusion
of its investigation, State Farm denied Rose’s claims for insurance proceeds. The company
alleged Rose violated the “Intentional Acts” and “Concealment or Fraud” conditions of his
respective insurance policies.1

         In 2010, Rose sued for money damages in Ohio state court, alleging breach of contract
against State Farm as well as a tort claim for bad faith. After State Farm properly removed the
case to federal court on diversity grounds, both parties filed cross-motions for summary
judgment. On the issue of whether the fire was incendiary, the district court found that multiple
issues of material fact remained. Accordingly, the court declined to grant summary judgment to
either party based on the “Intentional Acts” clause. The district court, however, did find that
some of the answers Rose gave in his recorded statement to State Farm were both misleading and
material. Specifically, it held that Rose’s failure to identify multiple tax liens and judgments,
when questioned by Raker about his financial status, voided his insurance policies under the

         1
             Rose’s homeowner’s insurance policy with State Farm contained the following terms:
         Intentional Acts. If you or any person insured under this policy causes or procures a loss to property
covered under this policy for the purpose of obtaining insurance benefits, then this policy is void and we will not pay
you or any other insured for this loss.
         Concealment or Fraud. This policy is void as to you and any other insured, if you or any other insured
under this policy has intentionally concealed or misrepresented any material fact or circumstance relating to this
insurance, whether before or after a loss.
         Rose’s Personal Articles policy contained substantially equivalent provisions.
No. 13-3887                Rose v. State Farm Fire & Cas. Co.                           Page 4

concealment provisions in those contracts. As a result, the district court found that summary
judgment in favor of State Farm was warranted. Subsequently, the district court denied Rose’s
Fed. R. Civ. P. 59(e) Motion to Alter or Amend Judgment.

                                                   II.

       We “review a district court order granting summary judgment under a de novo standard
of review, without deference to the decision of the lower court.” Brannam v. Huntington Mortg.
Co., 287 F.3d 601, 603 (6th Cir. 2002).           Summary judgment is proper “if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” Id. (citing Fed. R. Civ. P. 56(c)). In reviewing a
summary-judgment motion, we must view all the facts, evidence, and any inferences that may
permissibly be drawn, in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587-88 (1986).

       Furthermore, although this court will “generally review a denial of a motion to alter or
amend a judgment under Rule 59(e) for abuse of discretion, when the Rule 59(e) motion seeks
review of a grant of summary judgment, . . . we apply a de novo standard of review.” Johnson v.
City of Memphis, 617 F.3d 864, 867 (6th Cir. 2010) (citing Shelby Cnty. Health Care Corp. v.
Majestic Star Casino, LLC, 581 F.3d 355, 375 (6th Cir. 2009)) (internal quotation marks
omitted).

                                                   III.

       To properly analyze whether the answers Rose provided in his recorded statement were
intentionally misleading, it is necessary to review his entire exchange with Raker on the issue of
prior lawsuits:

       [Raker] Q. Uh, have you ever been involved in any type of lawsuit?
       [Rose] A. Yes.
       Q.         Just, from your expression it sounds like it might be lengthy list.
       A.         You haven’t been self-employed have you?
       Q.         (inaudible)
No. 13-3887                Rose v. State Farm Fire & Cas. Co.                              Page 5

      A.     Uh, it’s, uh, let’s see I got sued for a lady breaking a tooth on a piece of
      food. I got sued by a lady that said she fell in my parking lot because the parking
      lot was un, unsafe. Uh, I’m in the middle of a lawsuit, an ongoing lawsuit now
      with, uh, Fifth Third Bank actually.

       * * *

      Q.       What’s that relating to?
      A.     Um, it’s a business relationship that, uh, they reneged on and we filed a
      lawsuit against them.
      Q.       So you’re the plaintiff?
      A.    No, well, probably ought to call the attorneys that’s handling it in
      Columbus, (inaudible) Mark Kessler and let them talk about it with you.
      Q.       Is it, well let me just ask. Is it an individual suit or . . .
      A.       No . . .
      Q.       Is it one . . .
      A.       It’s a company.
      Q.       Okay, which company?
      A.       RSB.
      Q.       RSB, okay.
      A.       Uh, do you want his phone number?
      Q.       Sure.
      A.       614-233-5168
      Q.       Okay, other suits?
      A.       None that’s, you know, nothing that’s been to trial or nothing like that.
      Q.       Okay, let me ask you this. Have there ever, have there been any judgments
               against you?
      A.       Yes, Fifth Third’s got one for four million dollars and they’ve had it for
               two years.
      Q.       Is that this, this . . .
      A.       Yes, that’s all intertwined.
      Q.       Where’s that suit filed?
      A.       Gallia County Courthouse.
      Q.       Okay.
      A.       And I don’t have any (inaudible) you get stuff from vendors, like NTN is,
               they filed one for like 14 hundred dollars because I, I didn’t owe it and I
No. 13-3887             Rose v. State Farm Fire & Cas. Co.                              Page 6

               told them I wasn’t paying it, do what they had to do. I mean it’s a year
               and a half ago, uh but that’s about it and like I said it’s right there in the
               courthouse.
       Q.      Okay and this all in Gallia County?
       A.      Yes.
       Q.      Any, any suits in any other counties?
       A.      No.
       Q.      In any other states?
       A.      No.

       State Farm contends that, based on this exchange and a 2006 judgment order from the
Gallia County Common Pleas Court, the district court found that Rose concealed the existence of
a $4,826,595.20 judgment against him individually. The district court’s opinion, however,
offered no analysis on Rose’s characterization of the Fifth Third Bank litigation as business-
related (as opposed to implicating him individually). Instead, the court appears to have based its
concealment conclusion only on the “multiple tax liens and judgments” that Rose “failed to
identify.” Regardless, State Farm’s argument on this point is unpersuasive.

       In order for State Farm to validly invoke the concealment provision voiding the insurance
contract, the insured must have intentionally concealed or misrepresented a material fact; false
statements alone are not enough. See Trzcinski v. Am. Cas. Co., 953 F.2d 307, 313 (7th Cir.
1992). Rose’s financial situation is undoubtedly a material issue here because it provides a
potential motive for him to commit arson and collect on his loss. See Parker v. State Farm Fire
& Cas. Co., No. C87-2683, 1988 WL 1058394, at *5 (N.D. Ohio Nov. 4, 1988). The question,
then, is whether Rose intentionally misrepresented his financial situation by providing knowingly
false information to State Farm.

       Viewed in a light most favorable to Rose, the statements he made regarding the Fifth
Third litigation do not suggest an intent to conceal. In response to an open-ended question on
lawsuits, he volunteered the fact that a suit was on-going between himself and the bank.
Moreover, after having difficulty explaining the procedural posture of the case, Rose offered to
let Raker talk to the attorney handling the case and provided that attorney’s phone number. Only
when Raker asked whether it was “an individual suit” did Rose provide a response that was
No. 13-3887                Rose v. State Farm Fire & Cas. Co.                            Page 7

arguably misleading. He said, “No . . . it’s a company.” Although Rose was indeed named as an
individual party in the underlying action with Fifth Third, the litigation involved his business
ventures, including RSB Restaurants, so it was both an individual and a company matter. It is
not difficult to see how, given these circumstances, a non-lawyer could fail to provide an
accurate answer to Raker’s question while not attempting to mislead or conceal. Finally, Rose’s
response to Raker’s subsequent question about judgments indicates no attempt to conceal that
Fifth Third’s judgment was against him personally:

          Q. Okay, let me ask you this. Have there ever, have there been any judgments
          against you?
          A. Yes, Fifth Third’s got one for four million dollars and they’ve had it for two
          years.

          State Farm’s alternative argument, which the district court ultimately found compelling,
is that Rose violated the concealment provision of his insurance policies by failing to disclose
multiple tax liens and judgments against him during the Raker interview. “[A] misrepresentation
will be considered material if a reasonable insurance company, in determining its course of
action, would attach importance to the fact misrepresented.” Latimore v. State Farm Fire & Cas.
Co., No. 1:11-cv-272, 2012 WL 3061263, at *4 (N.D. Ohio July 26, 2012) (quoting Abon, Ltd. v.
Transcon. Ins. Co., No. 2004-CA-0029, 2005 WL 1414486, at *13 (Ohio Ct. App. June 16,
2005)).

          State Farm and the district court both point to the negative responses Rose gave at the end
of the exchange about suits in other counties and other states. It is true that Rose, personally or
through his businesses, has been a party to more than twenty lawsuits—some of which were
outside Gallia County. Also, in the years leading up to the fire in question, dozens of tax liens
had been filed against him in multiple jurisdictions.          Nevertheless, Rose asserts that he
completely cooperated with State Farm’s investigation and his answers to Raker were not an
attempt to conceal or mislead.       On balance, the record supports Rose’s argument that his
intention while making those statements is a question for a jury.

          First, the record does not show that Raker ever asked Rose directly about tax liens. Raker
asked about lawsuits and judgments. Because a tax lien in Ohio does not require the action of a
No. 13-3887                 Rose v. State Farm Fire & Cas. Co.                         Page 8

judge or jury before being converted to a judgment,2 it is not difficult to imagine that a non-
lawyer might differentiate between the two. Also, since Rose apparently does not manage his
own finances and taxes—relying instead on accountants—State Farm cannot point to any
evidence showing that Rose was aware of those liens at the time of his statement to Raker.

       Second, Rose’s answers to Raker’s questions about suits outside Gallia County might
have been given in a specific context. Just before giving his answers about suits outside Gallia
County, Rose tried to explain how lawsuits are frequently brought against entrepreneurs by
vendors with whom they have done business. Rose’s statement implied that he had been
involved in several of these vendor-related suits, and he specifically directed Raker to the Gallia
County Courthouse to find out more. When Rose answered Raker’s follow-up questions, his
response could have been in the context of these vendor suits, not the entire body of suits he had
ever been involved in. Although perhaps not the simplest or most straightforward explanation,
when viewed in a light most favorable to Rose, it is not necessarily one a jury would find
unreasonable.

       Finally, State Farm has the burden of establishing that Rose acted intentionally when he
gave inaccurate answers regarding the existence of other lawsuits. The overall context here
supports the conclusion that a material fact dispute remains about Rose’s intent. When Rose
answers Raker’s initial question about prior lawsuits, Raker accurately interprets Rose’s response
to mean that the latter’s litigation history will comprise a “lengthy list.” In his very next
response, Rose volunteers information about three lawsuits, including his on-going litigation
with Fifth Third Bank. The existence of the sizeable judgment the bank had against him—
$4.8 million—represented a potentially huge source of financial stress (and thus, motive) for
Rose, yet he provided Raker with the location of the suit as well as the name and phone number
of his attorney to find out more information. In comparison, the amount of the pending suits and
judgments that Rose did not mention is substantially lower. Because Rose was forthcoming
about his “lengthy” litigation history and the existence of a multi-million dollar judgment, a jury
might reasonably conclude that he had little motive to conceal the existence of other, relatively
minor legal debts.

       2
           See Ohio Rev. Code Ann. § 5739.13 and § 5733.11.
No. 13-3887              Rose v. State Farm Fire & Cas. Co.                             Page 9

       The cases on which State Farm relies—Latimore, 2012 WL 3061263; Taylor v. State
Farm Fire & Cas. Co., No. 3:11-cv-1714, 2012 WL 1643877 (N.D. Ohio May 10, 2012); and
Baymon v. State Farm Ins. Co., 257 F. App’x 858 (6th Cir. 2007)—are all distinguishable from
the situation here. In Latimore, State Farm denied the fire-loss claim in part because the plaintiff
“misrepresented his financial condition at the time of the fire loss.” 2012 WL 3061263, at *1.
Among other things, Latimore attempted to minimize his financial problems by understating the
size and duration of his mortgages arrearages. Id. at *7. He also flatly denied any judgments
existed against him when documentation existed showing he had signed a consent judgment just
two months before the fire. Id. at *4. The district court found that Latimore’s “story was ever
changing and inconsistent” and, critically, that Latimore had “admitted to a number of material
misrepresentations during the investigation of his fire loss.” Id. at *7. Here, Rose readily
disclosed significant financial liabilities from the beginning, and he has never conceded that any
of his answers amounted to material misrepresentation regarding his financial status.

       Similarly, in Taylor, State Farm denied a fire-loss claim because Valerie and Donald
Taylor made multiple material misrepresentations during the company’s investigation of the fire.
2012 WL 1643877, at *1. For example, Valerie Taylor stated that the subject property “was not
and never had been subject to foreclosure and that she was current and had been current on all
payments through 2010.” Id. In fact, a foreclosure action had been filed three months prior to
the fire, and a judgment of foreclosure had been obtained three days prior to the fire. Id.
Importantly, though, the district court again noted that “[the Taylors] do not contend they were
honest when [State Farm] questioned them about their financial status, including being late on
several utility bills and child support payments.” Id. at *3.

       Finally, in Baymon, State Farm again denied a fire-loss claim based on material
misrepresentations made by the insureds about their financial condition at the time of the fire.
257 F. App’x at 860. Five days after the fire, State Farm’s representative asked the Baymons in
a recorded statement whether they were current on their mortgage and taxes, and they responded
that they were. Id. Several months later, however, James Baymon admitted that some of his
earlier answers had been false. Id. “Specifically, James Baymon admitted that he knew his
house was scheduled for foreclosure [on a date five days after the fire] and he knew that he owed
on his taxes and mortgage.” Id. at 860-61 (emphasis added). Baymon asserted that “he did not
No. 13-3887              Rose v. State Farm Fire & Cas. Co.                           Page 10

answer the questions truthfully” because he found them “inappropriate” and “too personal.” Id.
at 862 (emphasis added).

       The cases Rose cites are more persuasive. In Jonathan Pepper Co. v. Hartford Cas. Ins.
Co., Hartford investigated an employee of the Jonathan Pepper Company after a fire occurred
that was deemed “clear-cut arson.” 520 F. Supp. 2d 977, 983 (N.D. Ill. 2007). In responding to
questions about previous fire incidents, the employee’s answers during a recorded statement and
an examination under oath were inconsistent with his later deposition answers. Id. at 984-85.
The district court declined to grant summary judgment, noting that the employee had
“disclose[d] one of his prior fire losses” and the remaining fire losses the employee previously
failed to mention “took place well before the fire in this case, so it is possible that they slipped
[his] mind.” Id. at 987. A reasonable juror could make the same finding here based on the sheer
number of business matters, lawsuits, and tax issues that Rose was involved with—especially
considering he did not personally manage his financial, legal, or tax affairs.

       In CSS Publ’g Co. v. American Econ. Ins. Co., an insurance company sought to void a
policy because it alleged the employees of its insured concealed a document relating to a
previous claim. 740 N.E.2d 341, 347 (Ohio Ct. App. 2000). The trial court denied summary
judgment, and the Ohio Court of Appeals affirmed, noting that because “neither [employee]
admitted to intentionally concealing the document in question,” an issue of material fact
remained.   Id.   Similarly, in this case Rose has vigorously contested that he intentionally
concealed information from State Farm in his initial recorded statement.

       When viewed in a light most favorable to Rose, the record supports Rose’s position that a
jury should determine whether he intentionally made a material misrepresentation when he
answered questions during a recorded statement with State Farm on January 20, 2009.

                                                IV.

       State Farm contends that Rose has forfeited his bad-faith claim because he “failed to set
forth any issue or argument concerning” that claim in his appeal of the district court’s summary
judgment order. Rose responds that since the district court based its decision on his bad-faith
claim entirely on its conclusion that State Farm properly voided the policy, he acted
appropriately by focusing his brief on the controlling issue on appeal, namely the breach-of-
No. 13-3887                Rose v. State Farm Fire & Cas. Co.                          Page 11

contract claim. Additionally, because the bad-faith claim was specifically mentioned in his Civil
Appeal Statement, Rose contends that State Farm was on notice about the intentions of his
appeal.

          Although generally “[a]n appellant abandons all issues not raised and argued in its initial
brief on appeal,” United States v. Johnson, 440 F.3d 832, 845-46 (6th Cir. 2006), we retain
discretion not to waive arguments a party does not specifically include in its “statement of
issues.” Union Oil Co. of Cal. v. Prof’l Realty Invs., Inc., 72 F.3d 130, 1995 WL 717021, at *11
n.4 (6th Cir. 1995) (Table).

          In this case, Rose’s bad-faith claim hinges on the existence of a valid, enforceable
insurance contract. In effect, the district court’s order caused Rose’s bad-faith claim to be
subsumed by the breach-of-contract issue. Had Rose included a separate section arguing the
district court’s analysis on his bad-faith claim was erroneous, he necessarily would have repeated
the same arguments he had previously made supporting his position that his insurance contract
was valid and enforceable.

          We decline to find that Rose abandoned his bad-faith claim on appeal. Furthermore,
because we held in Part III that a jury question remains as to the validity of Rose’s insurance
policies, the district court’s summary-judgment ruling on Rose’s bad-faith claim—finding those
policies were voided as a matter of law—cannot stand.

                                                  V.

          For the foregoing reasons, we REVERSE the district court’s order granting summary
judgment to State Farm on Rose’s breach-of-contract and bad-faith claims and REMAND the
case to the district court for further proceedings consistent with this opinion. Rose’s appeal on
his Motion to Alter or Amend Judgment under Rule 59(e) is DENIED as moot.
