## Facts

- Paul Dadurian obtained a Lloyd’s “Jewelry Floater” policy insuring 12 pieces of “specialty” jewelry, with a total policy limit of $267,000.
- Dadurian claimed he bought the jewelry over roughly 30 months from a Providence jeweler, paying entirely in cash, and obtained coverage based on appraisal certificates prepared by that jeweler.
- Dadurian reported the jewelry stolen in an armed robbery at his home and submitted a claim for the policy limit.
- During the insurer’s investigation and examination under oath, Dadurian stated he financed the jewelry purchases through bank loans and identified thirteen specific loans as the source of the cash used for particular jewelry purchases.
- Lloyd’s introduced bank testimony and records indicating many identified loans were renewals or were used for other purposes, and that the timing and amounts did not match the alleged cash purchases.
- The policy contained a fraud/false-swearing provision excluding coverage if the insured knowingly provided false information concerning a material fact.
- Dadurian asserted any inaccuracies about the loans were inadvertent mistakes caused by confusion and time pressure rather than deliberate falsehoods.

## Issues

1. Whether the jury’s special verdict finding no knowing, material false statements was against the great weight of the evidence, requiring a new trial.
2. Whether knowingly false sworn statements about the source of funds for the alleged purchases were material and, if so, voided coverage under the policy’s fraud/false-swearing clause.

## Decision

- The First Circuit vacated the judgment for Dadurian and remanded for a new trial.
- The court concluded the jury’s verdict was against the great weight of the evidence on whether Dadurian knowingly made false, material statements about the source of funds.
- The court held the source-of-funds misstatements were material because they bore on ownership and the insurer’s claim investigation.
- The court ordered a new trial rather than directing judgment for Lloyd’s, leaving disputed factual questions, including credibility and ownership, for retrial.

## Legal Principles

- An insurance policy may be voided under a fraud/false-swearing clause when the insured knowingly makes false statements about facts material to the claim.
- A fact is material if it is relevant to the insurer’s investigation or decision-making, including matters that bear on the insured’s ownership and the credibility of the claimed loss.
- A new trial may be warranted when a jury verdict is against the clear weight of the evidence and allowing it to stand would produce a seriously erroneous result.

## Conclusion

The court set aside the insured’s trial victory and required a new trial because the record strongly supported that the insured knowingly gave false, material sworn testimony about how he funded the alleged jewelry purchases, triggering the policy’s fraud/false-swearing defense and undermining the ownership claim central to coverage.


Dadurian v. Underwriters at Lloyd’s, London, 787 F.2d 756 (1st Cir. 1986)