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Summary Judgment May Be Appropriate When Insured Fails to Take Reasonable Measures to Prevent Property Damage

Many first party property insurance policies exclude claims for water damage that occurs when the insured premises is left vacant or unoccupied, unless the insured has used reasonable care to prevent such losses. In litigation challenging the denial of such claims, whether or not the insured’s actions in preventing property damage were reasonable is generally treated as a question of fact to be decided by a jury. However, when the facts are not disputed, and there are no credibility issues presented, a court may grant summary judgment on behalf of the insurer upholding the denial. Such a result recently occurred in a Pennsylvania case involving substantial losses as a result of water damage from burst pipes. Micalis Pazianas, M.D., et

Posted in Freezing, Homeowners Coverage, Vacant or Unoccupied, Water, Water

Tennessee Court Weighs in on Whether Arson is a Species of Vandalism and Malicious Mischief

Last month in what was a case of first impression in Tennessee, a unanimous panel of the state’s intermediate level appellate court joined those jurisdictions that have concluded that arson does not constitute a type of vandalism and malicious mischief.  As is typically the case, the issue arose after a fire destroyed a vacant building and the carrier denied liability because the policy excluded loss by vandalism and malicious mischief during vacancy.  Southern Trust Ins. Co. v. Phillips, 2015 WL 3612989, 2015 Tenn. App. LEXIS 457 (Tenn.Ct.App., Jun. 10, 2015) contains a helpful canvas of state law on both sides of the question, but the holding itself is obviously far less useful for insurers. The insured owned a home in

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Posted in Arson, Arson and Fraud, Exclusions, Fire, Vacant or Unoccupied, Vandalism

Illinois Court Holds Vacancy Clause Does Not Bar Vandalism and Theft Claim by Mortgagee

In a case of first impression in Illinois, a unanimous panel of the state’s Appellate Court recently addressed the interplay between a vacancy clause and a mortgagee provision and held that the insured’s failure to comply with the former did not preclude recovery by the mortgage company after vandals did over $2 million in damage.  In Old Second Nat’l Bank v. Indiana Ins. Co., 2015 IL App. (1st) 140265, — N.E.3d –, 2015 WL 1283867, 2015 Ill. App. LEXIS 185 (Mar. 20, 2015), it held that the vacancy clause was a condition subsequent to coverage and that its violation therefore only operated to bar the policyholder’s claim even though the structure – unbeknownst to the insurer — had been vacant

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Posted in Conditions, Loss Payees, Mortgagees, Theft or Dishonesty, Vacant or Unoccupied, Vandalism

Squatter’s Warming Fire in Vacant Home Held Not to be Vandalism by Divided California Court

In February, we published a Post about a Florida decision that aligned that state with the clear majority of American courts that have held that the destruction of property by an intentionally set fire is encompassed within the terms “vandalism and malicious mischief.”  Last Friday, in Hung Van Ong v. Fire Ins. Exch., 2015 WL 1524464, 2015 Cal. App. LEXIS 290 (Cal.Ct.App., Apr. 3, 2015), two of the three justices on a California intermediate level appellate court panel rejected that approach, reversing a grant of summary judgment in favor of the insurer in a case in which a vacant dwelling had been damaged when a transient set a fire on the kitchen floor to warm himself because they concluded that

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Posted in Arson, Exclusions, Fire, Vacant or Unoccupied, Vandalism

Texas Limits Scope of Anti-Technicality Statute and Material Breach Doctrine in Vacancy Clause Case

Last week, the Texas Supreme Court handed down an opinion that involved two unique (and somewhat troublesome) creatures of state law – the so-called “anti-technicality” statute and the material breach doctrine – and in Greene v. Farmer’s Ins. Exc., 2014 WL 4252271, 2014 Tex. LEXIS 758 (Tex., Aug. 29, 2014), it effectively limited the scope of both.  The court thereby gave effect to a provision in a homeowners policy that suspended coverage if a dwelling was allowed to remain vacant for more than sixty days. The case arose after Lewayne Greene moved into a retirement community, vacating her home in Irving, Texas and placing the structure on the market.  She notified her insurer of the move, but she did not

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Posted in Causation, Fire, Prejudice, Vacant or Unoccupied
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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