Commerce Bank v. West Bend Mut. Ins. Co.

An insurance company (Insurer) issued a policy of insurance on a building. A bank (Bank) was named in the policy as mortgagee. The policy contained a standard mortgage clause and a vacancy clause. The building was later vandalized, and Bank made a claim on the property. Insurer denied the claim under the vacancy clause. Bank sued for breach of the insurance contract. The district court summary judgment in favor of Insurer, concluding that Insurer was not liable to Bank because there was never any coverage offered for a vacant building. The court of appeals reversed, concluded that, under the standard mortgage clause, Bank was entitled to recover. The Supreme Court reversed, holding that, when a property insurance policy contains both a vacancy clause and a standard mortgage clause, a mortgagee has coverage for vandalism damage to a vacant building only if the building was vacant because of the acts of the owner or if the owner failed to comply with the terms of the policy and the mortgagee was unaware of the acts or failure. Remanded. View "Commerce Bank v. West Bend Mut. Ins. Co." on Justia Law