NO COVERAGE FOR INSURED WHO DOES NOT RESIDE IN DWELLING
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The plaintiffs appealed the dismissal of their suit against Farmers Automobile Insurance Association (Farmers). The plaintiffs were insured by Farmers for a St. Joseph residence that the plaintiff Judy had inherited from her deceased brother. The plaintiffs filed a claim with the company following a fire that destroyed the residence. Farmers denied the claim as the plaintiffs were not occupying the property at the time of the fire and were therefore not covered under the terms of the policy.
In Judy Dardar and Ivan Dardar v. Farmers Automobile Insurance Association and Jason Sticklen, Farmers Automobile Insurance Association, No. 5-22-0357, 2023 IL App (5th) 220357-U, Court of Appeals of Illinois, Fifth District (June 2, 2023) the claim of the Dardar’s was resolved.
BACKGROUND
Before he died David Jones, Judy’s brother, purchased an insurance policy from Farmers through Sticklen for property and liability insurance coverage for his residence in Champaign County. After David’s death Judy was appointed the legal independent representative of his estate.
Farmers issued a homeowner’s policy amending declarations, which added the decedent’s estate and Judy as additional insureds as well as a non-occupancy permit endorsement.
Once the estate was closed, and the house was transferred to Judy, she began making renovations to the residence. The plaintiffs were undecided as to whether they were going to live in the house after the renovations were complete or sell it. Then, on July 4, 2018, firework embers from an unidentified source caught the house on fire, and it was destroyed.
The plaintiffs never lived in or occupied the home. Judy had no knowledge that the policy was issued without the non-occupancy permit endorsement.
Farmers denied the claim on the basis that the policy covered their “residence premises,” which was defined as:
1 the one-family dwelling where you reside;
2 the two, three, or four-family dwelling where you reside in at least one of the units; or
3 that part of any other building in which you reside.
Farmers determined that the plaintiffs did not reside at the St. Joseph property and therefore were not covered under the policy terms. Judy claimed Sticklen failed to properly inform Farmers of her condition, and Farmers issued a new policy without the non-occupancy permit endorsement.
The court found that, based on the facts alleged, there was not a sufficient basis
for a breach of contract claim against Farmers and granted Farmers’ motion to dismiss. Based on the relevant facts, the plaintiffs could never plead that they ever resided on the St. Joseph property.
ANALYSIS
The issue on appeal was whether the trial court erred in granting Farmers’ motion to dismiss the breach of contract count.
A court must construe a policy of insurance as a whole and take into account the type of insurance purchased, the nature of the risks involved, and the overall purpose of the contract.
“Reside” is not ambiguous as it is used in the policy contract language between Farmers and the plaintiffs. The record established that the plaintiffs never lived on the property, were not occupying it in any way, and had not decided whether they would move into the home once the renovations were done. The mere fact that because “reside” has more than one definition does not make it ambiguous when, as here, there is no definition of the word that would apply to the plaintiffs. The Court of Appeal, like the trial court, concluded that the term “reside” as used in Farmers’ policy s not ambiguous.
ZALMA OPINION
There is nothing secret or difficult to understand about a policy definition that provides “one-family dwelling where you reside.” Since the insured did not reside in the dwelling and never resided in the premises, the unambiguous requirement of coverage was not met. They could easily have acquired a fire insurance policy that insured the plaintiffs, as a non resident, against the risk of loss of the house by fire. Instead they acquired a homeowners policy that required that they reside in the house. They did not and they recovered nothing.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
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Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
Post 4990
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
