Oregon Concludes Requirement that Insured Occupy Residence Premises Only Applies to Inception of Policy
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Post 5040
Ambiguity Makes Condition Unenforceable
In John Durkheimer and Karen Durkheimer v. Safeco Insurance Company Of Illinois, No. 3:24-cv-1333-SB, United States District Court, D. Oregon (April 1, 2025)
John and Karen Durkheimer (“Durkheimers”) sued Safeco Insurance Company of Illinois (“Safeco”), alleging claims for breach of insurance contract, breach of the implied covenant of good faith and fair dealing, and negligence per se. The Durkheimers’ residence in southwest Portland suffered significant water damage due to burst water pipes. The Durkheimers submitted an insurance claim to Safeco, the issuer of their homeowner’s insurance policy (“the Policy”). Although Safeco provided partial payment, the Durkheimers claimed additional outstanding damages. Safeco asserted, as its sixth affirmative defense, that “[t]he Policy limits dwelling coverage to the ‘Residence Premises’ . . . [and t]o the extent that [the Durkheimers] did not reside at the Premises when the Loss occurred, the Policy does not cover damage sustained to the Property.” The Durkheimers moved to strike this affirmative defense on the ground that it is insufficient as a matter of law.
The Court agreed with the Durkheimers. The phrase “owned and occupied” is merely a “description” of the property at the time the policyholder obtained insurance.
The USDC held that the insured’s lease of their residence to a third party did not forfeit coverage under a homeowner’s policy for “residence premises” where the policy defined that term as “where you reside.” The court explained that the phrase “where you reside” “could be grammatically interpreted to modify only ‘part of any other building,’ not ‘family dwelling.’”
When a policy leads to multiple reasonable interpretations, that policy does not “explicitly and unambiguously” terminate a homeowner’s policy. Even if a policy is phrased in a way that covers only family dwellings where a policyholder resides, that residence requirement applies to when the policy was first purchased, and not when a claim was filed.
The Durkheimers’ insurance policy did not specifically and unequivocally put them on notice that their coverage would end if they did not reside in the house in question and granted the Durkheimers’ motion to strike.
The Court concluded that the policy is ambiguous, and that therefore, the Durkheimers’ policy did not explicitly put them on notice that they needed to reside at the property to maintain coverage and the Court granted the Durkheimers’ motion to strike.
ZALMA OPINION
Most states have interpreted the fact that a homeowners policy requires an insured to reside in the dwelling for coverage to apply so, if the insured moves out during the policy term, the coverage is void unless the insured advises the insurer and modifies the policy to tenant occupied and pays any additional premium. The USDC, applying Oregon law found the language to be ambiguous and, therefore, reject the defense that the Durkheimers’ did not reside in the residence premises at the time of the loss but did reside there when the policy was issued. Since the weight of authority across the country is different there is a possibility that an appeal will move forward and a different result will occur.
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Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection 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.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection 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.
After ...
Chutzpah is not Enough
Post 5397
Posted on July 20, 2026 by Barry Zalma
See the video and at https://lnkd.in/gNUs2XzT and at https://lnkd.in/g2MawyzX
Magistrate Issues a Search Warrant if there is a Fair Probability that Contraband or Evidence of a Crime will be Found in a Particular Place.
In United States Of America v. Frank Suess, et al., CRIMINAL No. 3:24-308, United States District Court, M.D. Pennsylvania (July 16, 2026) a federal grand jury indicted Frank Suess, Melissa Driscoll, and others in a 55-count health care fraud and anti-kickback prosecution arising from an alleged scheme involving medically unnecessary prescription “foot baths.”
As part of the investigation, the FBI obtained an August 19, 2022 warrant to search Driscoll’s Sterling Pharmacy Yahoo email account for emails from January 1, 2018 through December 31, 2020. Driscoll moved to suppress the resulting evidence, arguing that the warrant lacked probable cause, was overbroad, and rested on material misstatements and omissions.
LAW:
The ...
Fraud Shouldn’t Pay
Post 5396
See the video and at https://rumble.com/v7ctgmq-the-great-jewel-theft.html at https://youtu.be/aRbQ2sJfGwA
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection 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.
The Insured purchased, for the first time in his life, a policy of Personal Articles Floater Insurance (PAF) scheduling $125,000 worth of ladies jewelry. He advised the insurer that the jewelry was always kept in a class E safe at his residence. He also told the insurer that he was employed full time as the owner of a gasoline service station and that he had never been canceled or suffered a previous loss.
One month after the policy was ...
Day Care Owner Loses Subsidies Because She Criticized State
Post 5421
Posted on August 11, 2026 by Barry Zalma
First Amendment Right Will be Allowed to Go to Trial
In Betsey J. Grant v. Maine State Department Of Heath And Human Services, No. 1:25-cv-00490-JAW, United States District Court, D. Maine (August 6, 2026), Betsey J. Grant, a licensed childcare provider and operator of Tiny Tikes Daycare in Trenton, Maine, sued Maine DHHS and several employees after she publicly criticized DHHS before Maine’s Government Oversight Committee and alleged that officials retaliated against her.
She claimed DHHS imposed and extended a conditional license, published stigmatizing information, interfered with subsidies and program funding, removed her from a food program, rescinded an expansion grant, and used biased or falsified evidence in licensing proceedings. Following the March 10, 2023, GOC testimony, Ms. Grant alleges that foster children's subsidies (approximately $30,000) were withheld; she was removed from the ...
Rescission for Material Misrepresentation
Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
In Union Mutual Fire Insurance Company v. 844 Knickerbocker, LLC, et al. No. 2024-10359, Index No. 602824/22, 2026 NY Slip Op 04789, Supreme Court of New York, Second Department (July 29, 2026) Union Mutual Fire Insurance Company issued commercial insurance policies to 844 Knickerbocker, LLC, and Sanjaya Mallick based on applications stating that the insured property contained two apartment units. After an underlying personal injury action was filed, Union Mutual determined that the property actually contained three apartment units and rescinded the policies on the ground that the defendants had made a material misrepresentation in the applications.
LAW:
A misrepresentation is material if the insurer would not have issued the same policy, or would have issued it only on different terms, had the true ...
Rescission for Material Misrepresentation
Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
In Union Mutual Fire Insurance Company v. 844 Knickerbocker, LLC, et al. No. 2024-10359, Index No. 602824/22, 2026 NY Slip Op 04789, Supreme Court of New York, Second Department (July 29, 2026) Union Mutual Fire Insurance Company issued commercial insurance policies to 844 Knickerbocker, LLC, and Sanjaya Mallick based on applications stating that the insured property contained two apartment units.
LAW:
A misrepresentation is material if the insurer would not have issued the same policy, or would have issued it only on different terms, had the true facts been disclosed. To establish materiality as a matter of law, the insurer must submit documentation of its underwriting practices, such as manuals, guidelines, bulletins, or rules addressing similar risks.
DISCUSSION/ANALYSIS:
As a result, the...
