                 IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT

                    ____________________________

                             No. 91-7045
                    ____________________________



United States Fidelity &
Guaranty Company
                                         Plaintiff-Counter-Defendant-
Appellee,

                                 versus

A. Buford Wigginton,
d/b/a
Pickens Pharmacy,
                             Defendant-Counter-Plaintiff-Appellant.


    __________________________________________________________
           Appeal from the United States District Court
             for the Southern District of Mississippi

    __________________________________________________________


                             (July 1, 1992)

Before KING, SMITH, and WIENER, Circuit Judges:


WIENER, Circuit Judge:

      In this Mississippi diversity case arising out of a fire and

a   subsequent   insurance   claim,     Defendant-Appellant   A.   Buford

Wigginton appeals the district court's grant of summary judgment of

no liability in favor of Wigginton's insurer, Plaintiff-Appellee

United States Fidelity & Guaranty Company (USF&G).            Finding no

reversible error, we affirm.



                                   I.
                        FACTS AND PROCEEDINGS

     There is no genuine dispute about the facts of this case.

USF&G issued a policy of insurance to Wigginton covering, inter

alia, fire damage to property on which Wigginton conducted his

business, Pickens Pharmacy.    In November of 1990, a fire destroyed

the property and its contents.   Wigginton was arrested and charged

with second degree arson.

     After filing a proof of loss with USF&G in January of 1991,

the company requested that Wigginton submit to an examination under

oath and produce certain documents and records.             Wigginton's

counsel informed USF&G, however, that Wigginton would not testify

under oath until he could make a decision whether to waive his

Fifth Amendment right against self-incrimination in the criminal

proceeding.    In   March,   Wigginton   appeared   at   the   scheduled

deposition but declined to answer questions or to produce the

requested records, asserting the Fifth Amendment.        Two weeks later

the company denied Wigginton's claim.

     In May, the company filed this declaratory judgment action.

Wigginton counterclaimed for bad faith denial of coverage and bad

faith in the handling of Wigginton's claim.     Wigginton also filed

a motion to dismiss, or in the alternative, a motion to stay the

proceeding until the criminal arson trial was completed.        USF&G in

turn filed a motion for summary judgment.

     In June, eleven days after USF&G filed its motion for summary

judgment, Wigginton filed with the court a "Notice of Availability

for Deposition."    USF&G immediately declined Wigginton's offer to


                                  2
submit to examination.   Four days thereafter, Wigginton responded

to USF&G motion for summary judgment, and filed an affidavit with

the court in which he averred:

     After discussing the matter with my attorneys, it has been
     determined that I should make myself available for examination
     under oath to answer questions concerning the fire and the
     losses which resulted, and to produce documents as requested
     by USF&G.   My offer to do so, however, is contingent upon
     USF&G's agreement, or Order of the Court to the effect that
     same will constitute a compliance on my part with the
     pertinent terms and provisions of my policy of insurance.

     The district court granted summary judgment to USF&G and

denied Wigginton's bad faith counterclaim.       The court concluded

that Wigginton's delay in submitting to examination under oath and

his subsequent conditional offer were unreasonable, thereby voiding

coverage under USF&G's fire policy.    Wigginton timely appealed.


                                 II.

                         STANDARD OF REVIEW

     This court reviews the grant of summary judgment motion de

novo, using the same criteria used by the district court in the

first instance.1   We "review the evidence and inferences to be

drawn therefrom in the light most favorable to the non-moving

party."2    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

     1
      Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir.
1988).
     2
      Baton Rouge Bldg. & Constr. Trades Council v. Jacobs
Constructors, Inc., 804 F.2d 879, 881 (5th Cir. 1986) (per
curiam) (citing Southmark Properties v. Charles House Corp., 742
F.2d 862, 873 (5th Cir. 1984)).

                                  3
issue as to any material fact and that the moving party is entitled

to a judgment as a matter of law." 3           Fed.R.Civ.P. 56(e) requires

that when a proper motion for summary judgment is made, the non-

moving party must set forth specific facts showing that there is a

genuine issue for trial.4      The mere existence of an alleged factual

dispute between the parties will not defeat an otherwise properly

supported motion for summary judgment.          A dispute about a material

fact is genuine "if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party."5         "Material facts"

are "facts that might affect the outcome of the suit under the

governing law."6


                                      III.

                                    ANALYSIS

A.   Failure to Submit to Examination under Oath

     In     its   argument   that   Wigginton's    failure   to   submit   to

examination under oath rendered Wigginton's policy void, USF&G

relies on the following provisions contained in the policy:

     A.      Loss Conditions
             ...
             3.   Duties In The Event of Loss Or Damage.
                  You must see that the following are done in the
                  event of loss of or damage to Covered Property:
                  ...


     3
      Fed.R.Civ.P. 56(c).
     4
      Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.
Ct. 2505, 2510 (1986).
     5
      Id. at 248.
     6
      Id.

                                       4
               g.    [The Examination of Oath Clause:]          If
                     requested, permit us to question you under
                     oath at such times as may be reasonably
                     required about any matter relating to this
                     insurance or your claim, including your books
                     and records. In such event, your answers must
                     be signed.
               ...

               i.    [The Cooperation Clause:] Cooperate with us
                     in the investigation or settlement of the
                     claim.

          4.   [The Legal Action Clause:] Legal Action Against Us.
               No one may bring a legal action against us under
               this insurance unless:
               a.   There has been full compliance with all of the
                    terms of this insurance; ...

     B.   General Conditions.

          1.   [The     Concealment   Clause:]        Concealment,
               Misrepresentation Or Fraud.
               This Coverage Part is void in any case of fraud by
               you at any time as it relates to this Coverage
               Part.     It is also void if you or any other
               insurance, at any time, intentionally conceal or
               misrepresent a material fact concerning:
               a.    This Coverage Part;
               b.    The Covered Property;
               c.    Your interest in the Covered Property, or
               d.    A claim under this Coverage Part.

"Mississippi law is clear that a policy is rendered void where an

insured either fails to submit to an examination under oath or

refuses to answer material questions during an examination under

oath."7

     The [policy's examination, concealment, and legal action
     clauses] are common to insurance policies, and have been dealt

     7
      Saucier v. U.S. Fidelity and Guaranty Co., 765 F.Supp. 334
(S.D. Miss 1991). See also Taylor v. Fireman's Fund Ins. Co.,
306 So.2d 638 (Miss. 1974); Southern Guaranty Ins. Co. v. Dean,
252 Miss. 69, 172 So.2d 553 (1965); Standard Ins. Co. v.
Anderson, 227 Miss. 397, 86 So.2d 298 (1956); U.S. Fidelity and
Guaranty Co. v. Conaway, 674 F.Supp. 1270 (N.D. Miss. 1987),
aff'd 849 F.2d 1469 (5th Cir. 1988).

                                5
     with by this court on many occasions. In all of these cases
     the clauses authorizing insurers to conduct investigations
     under oath were found to be reasonable and valid. This Court
     also found that failure to submit to such an examination,
     under circumstances such as those present in the case at bar,
     would preclude coverage under the policies as a matter of
     law.8

Therefore, because the failure to submit to examination voids the

policy as a matter of law, the policy need not explicitly state

that the examination clause is a condition precedent to recovery.

     Wigginton contends, however, that the policy is not void

unless USF&G proves that it was prejudiced by Wigginton's breach.

We do not agree.    The law of Mississippi is well-settled that an

insured's breach of a condition precedent or to a provision that

renders the policy void relieves the insurer of any obligation to

show prejudice.    A substantial line of cases supports the rule that

an insurer need not show prejudice when the insured breaches a

condition    precedent    or   a   condition    that    voids       the   policy.9

Although    Mississippi   courts    do    not   speak   of   examinations      as

conditions   precedent,    they    have   never   required      a    showing   of

prejudice when breach of the examination clause renders a policy


     8
      See Allison v. State Farm Fire & Cas. Co. 543 So.2d 661,
663 (Miss. 1989).
     9
      See Hall v. State Farm Fire & Cas. Co., 937 F.2d 210 (5th
Cir. 1991)(no showing of prejudice necessary when breach of
concealment clause voided coverage); Bolivar County Bd. of
Supervisors v. Forum Ins. Co., 779 F.2d 1081 (5th Cir. 1986)(no
showing of prejudice necessary when provision is condition
precedent); Reliance Ins. Co. v. County Line Place, Inc., 692
F.supp. 694 (S.D.Miss. 1988)(no showing of prejudice necessary
when notice provision is condition precedent); West v. Bankers
and Shippers Ins. Co., 643 F.Supp. 992 (N.D. Miss. 1986)(no
showing of prejudice necessary when notice provision is condition
precedent), aff'd 814 F.2d 657 (5th Cir. 1987).

                                      6
void.10      Clearly, then, Wigginton's breach of the examination

clause, precluding coverage as a matter of law, obviates any

obligation of USF&G to demonstrate prejudice.

     Wigginton also insists that his subsequent offer to submit to

examination cured any breach because the delay was reasonable.       In

Standard Ins. Co. of New York v. Anderson,11 the Mississippi Supreme

Court concluded that a willful failure to submit to an examination

can violate a policy's concealment clause, but the court also

recognized that a reasonable delay in submitting to an examination

may be excused.         The court reiterated this position in Home Ins.

Co. v. Olmstead12, stating that "if an insured, for a valid reason,

is unable to attend an examination under oath, it is incumbent upon

the insured, as soon as possible, to offer to submit to an

examination at a later date."13        We agree with the district court

in the instant case that Wigginton's delay was unreasonable as a

matter of law.

     Wigginton premised his refusal to submit to the examination on

the ground that he needed time to decide whether to waive his right

against self-incrimination in his criminal matter, cognizant of the


     10
      See, e.g., Taylor v. Fireman's Fund Ins. Co., 306 So.2d
638 (Miss. 1974); Southern Guaranty Ins. Co. v. Dean, 252 Miss.
69, 172 So.2d 553 (1965); Standard Ins. Co. v. Anderson, 227
Miss. 397, 86 So.2d 298 (1956); See also U.S. Fidelity and
Guaranty Co. v. Conaway, 674 F.Supp. 1270 (N.D. Miss. 1987),
aff'd 849 F.2d 1469 (5th Cir. 1988).
     11
          227 Miss. 397, 86 So.2d 298 (1956).
     12
          355 So.2d 310 (Miss. 1978).
     13
          Id. at 313.

                                      7
fact    that     answering   any   questions   in   his   examination   would

effectively waive these rights.            Wigginton cannot, however, rely

upon his Fifth Amendment right against self-incrimination as a

valid excuse to avoid examination in this civil case.             We see no

principled difference between invoking one's Fifth Amendment rights

and delaying the examination in order to decide whether to do so.

In Saucier v. U. S. Fidelity and Guaranty Co.14 the court reasoned:

       The compulsion secured against by the constitution is a
       compulsion exercised by the state in its sovereign capacity in
       some matter known to the law. Constitutional immunity has no
       application to a private examination arising out of a
       contractual relationship. The examination to which appellants
       demanded respondent should submit was an extrajudicial
       proceeding, not authorized by any constitutional or statutory
       provision, but purely by virtue of a contract between the
       parties. To bring a case within the constitutional immunity,
       it must appear that compulsion was sought under public process
       of some kind. This being so, respondent's refusal to undergo
       examination and produce his books and papers acquires no
       sanctity because he urged his constitutional right not to be
       compelled to be a witness against himself. The demand was
       made upon him by virtue of the stipulation in the contract,
       and by the stipulation alone must his refusal be judged. The
       stipulation constituted a promissory warranty under which
       appellants had the right to demand compliance by respondent
       "as often as required," and the performance of such
       stipulation was a condition precedent to any right of action.15

       It is not just the number of months that elapsed between the

demand for examination and Wigginton's consent to submit that makes

his delay unreasonable. The facts that he waited until after USF&G

filed suit and after its motion for summary judgment was filed to

consent exacerbated the unreasonableness of Wigginton's delay.



       14
            765 F.Supp. 334 (S.D. Miss. 1991).
       15
      Id. at 336 (quoting Hickman v. London Assurance Corp., 184
Cal. 524, 195 P. 45, 49 (1920).

                                       8
     More significantly, Wigginton did not redeem himself when he

offered     to    submit   some    three       months    later.     His       offer   was

unreasonably conditioned on the company's agreeing to waive its

rights with respect to voiding the policy.                    Even if we were to

agree     that    Wigginton's     delay    of    three    months   was    reasonable

temporally, we would be forced to conclude that the contingency

attached to his offer made it ineffectual and thus unreasonable.

The district court was correct when it concluded that

     In effect, compliance with Wigginton's demand requires USF&G
     to relinquish the defense that it was justified in denying
     Wigginton's claim because he failed to timely comply with the
     terms of the policy, even before Wigginton appears and is
     questioned. USF&G is not required by its policy or by law to
     accept such an offer. Accordingly, the court concludes that
     Wigginton has not made an offer to comply with the terms of
     the policy which would defeat the plaintiff's motion for
     summary judgment....

B.   Wigginton's Counterclaim for Bad Faith

     The district court denied Wigginton's counterclaim against

USF&G for breach of contract in denying his claim for coverage.

Wigginton argues that the conduct of USF&G constituted a breach of

contract     so    willful,     intentional,       malicious      and    in    reckless

disregard of his rights as to amount to the independent tort of bad

faith calling for actual and punitive damages.                          Specifically,

Wigginton complains of USF&G's insistence on the examination under

oath, the denial of the claim, and the filing of suit.

     The law is well settled that the insured has the burden of

establishing a claim for bad faith denial of an insurance claim.16


     16
      Dunn v. State Farm Fire and Casualty Co., 711 F.Supp 1362,
1364 (N.D. Miss. 1988), aff'd, 927 F.2d 869 (5th Cir. 1991).

                                           9
The insured must show that the insurer denied the claim (1) without

an arguable or legitimate basis, either in fact or law, and (2)

with malice or gross negligence in disregard of the insured's

rights.17       The insurer need only show that it had reasonable

justifications, either in fact or in law, to deny payment.18

Moreover, whether an insurer had an arguable reason to deny an

insured's claim is an issue of law for the court.19

     In deciding whether an insurer had an arguable basis to deny

insurance liability, Mississippi courts apply the directed verdict

test:20    Unless the insured would be entitled to a directed verdict

on the underlying insurance claim, an arguable reason to deny an

insurance claim exists in most cases.21

     We have already determined that Wigginton's failure to submit

to the requested examination and his subsequent impermissibly

conditional offer to submit were unreasonable as a matter of law.22

Under these circumstances, there is no doubt that Wigginton's

breach provided USF&G substantially more than an arguable reason to

deny his claim.


     17
          Id., 927 F.2d at 872.
     18
          Id. at 873.
     19
          Id.
     20
          Id.
     21
          Id.
     22
      Because we find that Wigginton's conduct was a breach as a
matter of law, his argument that the district court erred in
granting summary judgment before discovery was undertaken is
meritless.

                                  10
                                IV.

                             CONCLUSION

     Wigginton's failure to submit to examination voided the policy

as a matter of Mississippi law, without the necessity for USF&G to

show that it was prejudiced by that failure.    We do not need to

reach the question whether the period of Wigginton's delay was

unreasonable because his subsequent offer to submit did not cure

the breach; it was unacceptably conditional and, thus without

effect.     The district court, therefore, did not err in granting

USF&G summary judgment, or in denying Wigginton's counterclaim for

bad faith.

     For the foregoing reasons, the judgment of the district court

is

AFFIRMED.




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