Exclusion of Injuries To Resident is Effective
Read the full article at https://www.linkedin.com/pulse/clear-unambiguous-exclusion-must-enforced-barry-zalma-esq-cfe-1c and at https://zalma.com/blog plus more than 4050 posts.
Posted on February 9, 2022 by Barry Zalma
Defendant, Cynthia Donnelly, sued her landlords after she injured herself when an allegedly defective stair collapsed under her at the rental property. The landlords, defendants Vidyasagar Cheekati and Vijaya Kasireddy (collectively, the Insureds), informed their insurer, plaintiff Farmers Insurance Exchange (Farmers), of the injury and the lawsuit, but Farmers disclaimed coverage, claiming two policy exclusions precluded coverage for Donnelly’s injuries.
In Farmers Insurance Exchange v. Vidyasagar Cheekati, Vijaya Kasireddy, Cynthia Donnelly, Deana Todi, a/k/a Bina Todi, Apex Properties, Inc., a/k/a Remax Choice, d/b/a JP Finley & Remax Rising, Vidyasagar Cheekati and Vijaya Kasireddy, 2022 IL App (4th) 210023, Nos. 4-21-0023, 4-21-0024, Court of Appeals of Illinois, Fourth District (February 7, 2022) the Illinois Court of Appeal resolved the disputes that arose when Farmers refused to defend or indemnify the Insureds in Donnelly’s lawsuit and sought declaratory judgment, stating it rightly disclaimed coverage and, therefore, need not defend the Insureds.
The litigation culminated in a hearing on Farmers’ motion for judgment on the pleadings, which the trial court granted. The Insureds and Donnelly appeal.
BACKGROUND
In 2016 and 2017, the Insureds owned a home located in Bloomington, Illinois. They insured the property through Farmers with a homeowners policy. The Insureds, unable to sell the house, entered into a two-year lease agreement with Donnelly who rented the insured home as a tenant. On January 25, 2017, Donnelly allegedly sustained physical injuries while in the rented home when a defective staircase collapsed under her.
On January 24, 2019, Donnelly filed her complaint initiating the underlying action by alleging she sustained injuries due to the Insureds negligence. On March 7, 2019, Farmers sent the Insureds a letter disclaiming coverage for Donnelly’s injuries. Citing the resident and business exclusions in the homeowners policy, Farmers found their application excluded coverage because “[a]t the time of her alleged injury, Ms. Donnelly was a tenant in your home.”
Farmers moved to dismiss the Insureds’ claim and the trial court issued a four-paragraph order granting Farmers’ motion for judgment on the pleadings and dismissing the case.
ANALYSIS
Judgment on the pleadings is proper when the pleadings disclose no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
An Insurer’s Duty to Defend its Insured
An insurer has a duty to defend its insured “[i]f the facts alleged in the underlying complaint fall within, or potentially within, the policy’s coverage.” Illinois State Bar Ass’n Mutual Insurance Co., 2018 IL App (4th) 170548, ¶ 35.
If an insurer relies on an exclusionary clause to deny coverage and refuses its duty to defend its insured, as Farmers does here, then it must be clear and free from doubt that the exclusionary clause applies.
Interpreting This Insurance Policy’s Resident Exclusion
When construing the language of an insurance policy, a court’s primary objective is to ascertain and give effect to the intentions of the parties as expressed by the words of the policy. If the policy’s words are clear and unambiguous, they will be given their plain and ordinary meaning, but if the policy terms are reasonably susceptible to more than one meaning, they are ambiguous and will be strictly construed against the drafter. Likewise, courts will not strain to find ambiguity in an insurance policy where none exists.
The Insureds’ homeowners insurance policy included certain liability coverage. The Insureds’ homeowners policy, however, also contained a “Liability Exclusions” to “Any insured or other residents of the residence premises. We do not cover bodily injury or personal injury to: (a) any insured; or (b) any resident of the residence premises, whether resident in the dwelling or a separate structure.”
In her underlying complaint, Donnelly identified herself as a tenant lawfully on the premises. The Court of Appeals, obviously, understood that allegat to mean she dwelt in the home. In fact, neither the Insured nor Donnelly denied she lived in the insured home.
Looking at the policy as a whole and considering the type of policy involved, as the Insureds implored the court to do, the court could not conclude the parties intended for the personal liability coverage in this homeowners’ policy to apply to bodily injuries sustained by a person renting the insured home for two years.
In sum, since “resident(s)” is an undefined, unambiguous policy term, the court of appeal adopted its plain, ordinary meaning. Given that meaning-one who dwells in a place permanently or for a considerable amount of time- the court concluded, based on the allegation in the underlying complaint that Donnelly was a tenant in the Insureds’ home, Donnelly was a resident of the residence premises when she allegedly sustained injuries from a defective stair in the home. Consequently, the court of appeal concluded that it was “clear and free from doubt” that the resident exclusion applied to preclude coverage, Farmers had no duty to defend the Insureds, and the trial court rightly granted Farmers’ motion for judgment on the pleadings.
Estoppel
The Insureds also argued Farmers should be estopped from exercising the right to disclaim coverage because it twice informed the Insureds it would cover the claim and then waited two years to disclaim coverage.
Farmers twice informed the Insureds it was investigating their claim, but Farmers did not promise coverage. Similarly, the agent’s comment that Farmers “will take it from there” did not promise coverage. More importantly, though, the Insureds have not alleged prejudice, let alone present clear, concise, unequivocal evidence of prejudice. Because plaintiffs did not assert how they were prejudiced plaintiffs fail to establish a necessary element of estoppel.
The court affirmed the trial court’s dismissal, agreeing that Farmers did not unreasonably delay, nor did it wrongly deny coverage.
ZALMA OPINION
The Illinois Court of Appeal found, as it was required to do by law and precedent, that an insurance policy is a contract that must be interpreted as a whole. Doing so it found that the clear and unambiguous term “resident” means a person living in the house, as did Donnelly, subject to a written lease. Multiple, creative arguments to find coverage failed. Insurance was not the only remedy available to Ms. Donnelly. She can still proceed against the landlords and collect any judgment she may receive from the landlord’s assets, like the house she rented.
© 2022 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.
He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.
Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.
You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com, [email protected] and [email protected] . Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma; you can follow Mr. Zalma on Twitter at; you should see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/
Intentionally Shooting a Woman With A Rifle is Murder
Post 5196
See the full video at and at and at https://zalma.com/blog and more than 5150 posts.
You Plead Guilty You Must Accept the Sentence
In Commonwealth Of Pennsylvania v. Mark D. Redfield, No. 20 WDA 2025, No. J-S24010-25, Superior Court of Pennsylvania (September 19, 2025) the appellate court reviewed the case of Mark D. Redfield, who pleaded guilty to third-degree murder for killing April Dunkle with malice using a rifle.
Affirmation of Sentence:
The sentencing court’s judgment was affirmed, and jurisdiction was relinquished, concluding no abuse of discretion occurred.
Reasonable Inference on Trigger Pulling:
The sentencing court reasonably inferred from the guilty plea facts that the appellant pulled the trigger causing the victim’s death, an inference supported by the record and consistent with the plea.
Guilty Plea Facts:
The appellant admitted during the plea hearing...
The Judicial Proceedings Privilege
Post 5196
Posted on September 25, 2025 by Barry Zalma
See the full video at and at
Judicial Proceeding Privilege Limits Litigation
In David Camp, and Laura Beth Waller v. Professional Employee Services, d/b/a Insurance Branch, and Brendan Cassity, CIVIL No. 24-3568 (RJL), United States District Court, District of Columbia (September 22, 2025) a defamation lawsuit filed by David Camp and Laura Beth Waller against Insurance Branch and Brendon Cassity alleging libel based on statements made in a letter accusing them of mishandling funds and demanding refunds and investigations.
The court examined whether the judicial proceedings privilege applieD to bar the defamation claims.
Case background:
Plaintiffs Camp and Waller, executives of NOSSCR and its Foundation, sued defendants Insurance Branch and Cassity over a letter alleging financial misconduct and demanding refunds and audits. The letter ...
Misrepresentation or Concealment of a Material Fact Supports Rescission
Post 5195
Don’t Lie to Your Insurance Company
See the full video at and at https://rumble.com/v6zefq8-untrue-application-for-insurance-voids-policy.html and at https://zalma.com/blog plus more than 5150 posts.
In Imani Page v. Progressive Marathon Insurance Company, No. 370765, Court of Appeals of Michigan (September 22, 2025) because defendant successfully established fraud in the procurement, and requested rescission, the Court of Appeals concluded that the Defendant was entitled to rescind the policy and declare it void ab initio.
FACTS
Plaintiff's Application:
Plaintiff applied for an insurance policy with the defendant, indicating that the primary use of her SUV would be for "Pleasure/Personal" purposes.
Misrepresentation:
Plaintiff misrepresented that she would not use the SUV for food delivery, but records show she was compensated for delivering food.
Accident:
Plaintiff's SUV was involved in an accident on August ...
How a Need for Profit Led Health Care Providers to Crime
Post 5185
Posted on September 8, 2025 by Barry Zalma
See the full video at https://lnkd.in/gePN7rjm and at https://lnkd.in/gzPwr-9q
This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers.
The Dishonest Chiropractor/Physician
How a Need for Profit Led Health Care Providers to Crime
See the full video at and at
This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
How Elderly Doctors Fund their ...
How a Need for Profit Led Health Care Providers to Crime
Post 5185
Posted on September 8, 2025 by Barry Zalma
See the full video at https://lnkd.in/gePN7rjm and at https://lnkd.in/gzPwr-9q
This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers.
The Dishonest Chiropractor/Physician
How a Need for Profit Led Health Care Providers to Crime
See the full video at and at
This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
How Elderly Doctors Fund their ...
Barry Zalma: Insurance Claims Expert Witness
Posted on September 3, 2025 by Barry Zalma
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...