Justia Insurance Law Opinion SummariesArticles Posted in Landlord - Tenant
Ro v. Factory Mutual Insurance Company, as Subrogee of Trustees of Dartmouth College
Defendant Factory Mutual Insurance Company (Factory Mutual) appealed a superior court order denying its motion for summary judgment and granting plaintiffs' Daniel Ro and Sebastian Lim motion. Plaintiffs sought a declaration they were implied co-insureds under a fire insurance policy issued by Factory Mutual to the Trustees of Dartmouth College. Plaintiffs were students in 2016 living in campus dormitories. Prior to being assigned a dormitory room, each plaintiff was required to sign a form acknowledging receipt and understanding of the college’s student handbook, which included prohibitions on: (1) possessing charcoal grills in student housing; (2) lighting and burning of any item with an open flame in residence halls; and (3) placing items on, and the use of, “the roof, portico, fire escape, or any other architectural feature not designed for recreational or functional use, except in cases of emergency.” Plaintiffs set up a charcoal grill on a platform outside a fourth floor window in Lim’s dormitory. The grill started a fire on the platform, which then spread to the roof. Firefighters used a substantial quantity of water to extinguish the fire, and all four floors of the dormitory sustained water damage. Factory Mutual, which insured the building, paid the Trustees $4,544,313.55 and then brought a subrogation claim against plaintiffs to recover that amount. The trial court concluded that Factory Mutual could not maintain its counterclaims against either plaintiff, specifically noting, “To the extent Mr. Lim’s possessory interest in Morton Hall is insurable, so is Mr. Ro’s. Mr. Ro’s possessory interest in Morton Hall is analogous to that of a tenant who rents one unit in a residential complex but causes fire damage to another unit in the complex.” In affirming the superior court, the New Hampshire Supreme Court concluded that, even if plaintiffs lacked a possessory interest in their dormitories, and even if their relationship with the college was not strictly that of landlord and tenant, they had a contractual relationship with the college in which they paid for the right, subject to the noted limitations, among others, to occupy a college dormitory for a certain period of time. "This contractual relationship gave rise to the reasonable expectation that Dartmouth College carried fire insurance on its dormitories, that the plaintiffs’ room and board fees contributed, in some way, to the premium for that insurance, and, therefore, that the insurance inured to their benefit." View "Ro v. Factory Mutual Insurance Company, as Subrogee of Trustees of Dartmouth College" on Justia Law
Kaiser v. Allstate Indemnity Co.
In this insurance dispute, the Supreme Court affirmed the decision of the district court granting summary judgment for Allstate Indemnity Company, holding that property loss from Plaintiffs' tenants' producing or using methamphetamine indoors was not a covered peril under the insurance policy.Plaintiff filed an insurance claim alleging that his tenants damaged his rental house by producing or using methamphetamine indoors. Allstate denied the claim. Plaintiff subsequently filed a complaint against Allstate alleging breach of contract and bad faith. The district court granted summary judgment for Allstate, concluding that Plaintiff's property loss was excluded from coverage under certain portions of the insurance policy and was not covered by other portions of the policy. The Supreme Court affirmed, holding that Plaintiff's assignments of error were without merit. View "Kaiser v. Allstate Indemnity Co." on Justia Law
Terrell v. State Farm General Ins. Co.
Appellants had been renting their San Francisco home to tenants for eight years when the front porch collapsed, causing injury to a tenant. When the tenants sued, appellants sought defense and indemnification from their insurance provider, respondent State Farm, which denied their claim, because appellants’ homeowners’ insurance policy excluded coverage for injuries arising out of an insured’s business pursuits or the rental of their home. Appellants sued State Farm for breach of contract and bad faith denial of their insurance claim. The court of appeal affirmed summary judgment in favor of State Farm. The court rejected an argument that coverage should be restored under an exception for activities that are “ordinarily incident to non-business pursuits.” Appellants sought “to fold into a homeowners policy coverage for the commercial risks attendant to renting their home as a for-profit venture. There is a separate policy tailored to those business risks, a rental dwelling policy, that appellants eschewed in favor of a cheaper policy. Appellants’ argument, if accepted, would upend the allocation of risks and costs associated with commercial or personal activities that insurers rely upon to keep homeowners’ premiums lower than that of business enterprises.” View "Terrell v. State Farm General Ins. Co." on Justia Law
K.V.G. Properties, Inc. v. Westfield Insurance Co.
Some of KVG’s commercial tenants got caught growing marijuana in their rental units and caused substantial damage to the premises before the police caught them. KVG speedily evicted the tenants and sought coverage from its insurers for nearly $500,000 in related losses. Westfield denied the claims. The Sixth Circuit affirmed summary judgment for Westfield, reasoning that the damage was excluded by the policy, which is the Building and Personal Property Coverage Form. Under this Form, Westfield agreed to pay for “direct physical loss of or damage to Covered Property . . . caused by or resulting from any Covered Cause of Loss.” A “Covered Cause of Loss” is any “Risk Of Direct Physical Loss,” with several exclusions, including that Westfield “will not pay for loss or damage caused by or resulting from” any “[d]ishonest or criminal act by you, any of your partners, members, officers, managers, employees (including leased employees), directors, trustees, authorized representatives or anyone to whom you entrust the property for any purpose.” While cultivating marijuana is a crime under federal law, it is protected by Michigan law under certain conditions but no reasonable jury could find that KVG’s tenants complied with Michigan law. View "K.V.G. Properties, Inc. v. Westfield Insurance Co." on Justia Law
Duarte v. Pacific Specialty Insurance Co.
Duarte's Oakland property was occupied by Bowers. Bowers’s daughter, Pleasants, moved into the property and remained after Bowers died. In February 2012, Duarte gave Pleasants a 45-day notice to quit, but she did not leave. On April 19, Duarte obtained landlord-tenant insurance coverage for the property with Pacific, including “Owners, Landlords & Tenants Liability Coverage,” effective April 19, 2012. In June 2012, Pleasants sued Duarte, alleging that habitability defects had allegedly existed throughout the tenancy. Duarte tendered defense of the suit to Pacific, which denied coverage. Duarte sought a declaration that the policy required Pacific to defend the tenant suit and sought damages for breach of contract. Pacific alleged material misrepresentations by Duarte on the application; he represented that there were no disputes concerning the property although he knew that the tenant had complained to the city and that there was no business conducted on the property although he knew the tenant was running a business. The court of appeal ruled in favor of Duarte. Pacific’s question about the existence of pending claims, property disputes, or lawsuits concerning the property was “utterly ambiguous.” Pacific did not show that Duarte knew a “business” was conducted on the property at the time he submitted his application. View "Duarte v. Pacific Specialty Insurance Co." on Justia Law
Standard Fire Insurance Co. v. Continental Resources, Inc.
The Supreme Court reversed the circuit court’s dismissal of Standard Fire Insurance Co.’s case against Continental Resources Inc. pursuant to S.D. Codified Laws 15-6-12(b)(5). Standard Fire brought suit seeking statutory reimbursement or, in the alternative, equitable subrogation of workers’ compensation benefits paid to an employee. The circuit court found that the terms of a settlement agreement barred further litigation and that res judicata applied. The Supreme Court disagreed and remanded the matter for further proceedings, holding that the circuit court erred when it determined that the plain language of the settlement agreement barred Standard Fire’s claim. View "Standard Fire Insurance Co. v. Continental Resources, Inc." on Justia Law
Fisher v. Garrison Property & Casualty Ins
The faulty, inadequate, or defective work exclusion did not apply to the loss in this case. At issue in this appeal was the dismissal of Plaintiff’s action seeking to recover under an insurance policy for the loss of her house caused when a renter, who had an option to purchase the house, demolished it. The district court held that coverage for such loss was excluded under the policy. The Supreme Court vacated the judgment of the district court and remanded this case for further proceedings. View "Fisher v. Garrison Property & Casualty Ins" on Justia Law
Philadelphia Indem. Ins. Co. v. White
After Tenant moved into her apartment, her apartment and several adjoining units were severely damaged in a fire that originated in Tenant’s clothes dryer. Insurer paid Landlord’s insurance claim and then sued Tenant for negligence and breach of the Apartment Lease Contract. The jury found that Tenant breached the lease agreement and awarded $93,498 in actual damages and attorney’s fees from Insurer. Tenant filed a motion for judgment notwithstanding the verdict, asserting several grounds for avoiding enforcement of the contract. The trial court granted Tenant’s motion and rendered a take-nothing judgment. The court of appeals affirmed, concluding that the residential-lease provision imposing liability on Tenant for property losses resulting from “any other cause not due to [the landlord’s] negligence or fault” was void and unenforceable because it broadly and unambiguously shifted liability for repairs beyond legislatively authorized bounds. The Supreme Court affirmed in part and reversed in part, holding (1) the court of appeals properly rejected Tenant’s ambiguity defense; but (2) the court of appeals erred in invalidating the lease provision on public-policy grounds. Remanded. View "Philadelphia Indem. Ins. Co. v. White" on Justia Law
SFI Ltd. Partnership 8 v. Carroll
SFI Ltd. Partnership 8 (SFI) owned an apartment complex containing approximately 200 apartments. Through its agent, SFI leased an apartment to Michelle Carroll. The lease included provisions requiring Carroll to pay for repairs caused by her use of the unit and to maintain renter’s insurance including “a personal liability coverage to a minimum of $100,000.00.” A fire occurred in the apartment rented to Carroll. Both the apartment and the surrounding building were damaged. SFI had $10 million of total insurance coverage on the apartment complex. The policy provided for a deductible of $250,000 per occurrence unless a specific deductible applied. The parties stipulated that SFI sustained damages in excess of $100,000 resulting from the fire, which damages were not covered by its insurance policy. But neither the total amount of damages nor the amount of any insurance recovery by SFI was included in the evidence. Carroll had renter’s insurance in place at that time, and she submitted a claim to her insurer. Carroll’s insurer paid her $1,500, representing only her damages under “Loss of Use Coverage.” In previous cases, the Nebraska Supreme Court applied an antisubrogation rule to prohibit a landlord’s insurer from seeking reimbursement from the tenant of fire losses paid by insurance. In this appeal, the Court declined to extend the antisubrogation rule to a landlord’s uninsured losses allegedly caused by its tenant’s negligence. Therefore the Court reversed the district court’s summary judgment in favor of the tenant. The case was remanded for further proceedings.View "SFI Ltd. Partnership 8 v. Carroll" on Justia Law
Beveridge v. Savage
Landlord and Tenant signed a lease agreement for a rental property that required Tenant to obtain a liability and renter's insurance policy at his expense. Tenants obtained a renter's protection policy of insurance. The house was later damaged by fire caused by a child using a lighter. Landlord's insurer (Insurer) paid for the loss. This subrogation action was brought against Tenants in Landlord's name. The district court dismissed the action, concluding (1) the lease provision requiring Tenant to obtain renter's insurance did not permit Landlord or Insurer to bring a subrogation action against Tenants; and (2) Tenants were coinsureds under Landlord's fire insurance policy, and Insurer could not subrogate against its coinsureds. The Supreme Court affirmed, holding that because the terms of the lease did not overcome the presumption that Tenant was coinsured under Landlord's fire insurance policy, Landlord and Insurer could not bring a subrogation action against Tenants. View "Beveridge v. Savage" on Justia Law