Thursday, January 18, 2018

The HOME in HOMEowner's Insurance -- Questions of Fact on Policyholder's Residence Preclude Summary Judgment

Sosenko v. Allstate Ins. Co.
(3rd Dept., decided 11/30/2017)

No, not HOME as in four-fifths of the Greats Lakes.  The home or residence question again, as it bears on structure coverage under a homeowner's insurance policy.

Core Holding:  Contradictory statements of the policyholder regarding the extent of her own physical presence at the premises are alone sufficient to create an issue of fact that may not be resolved by summary judgment.

Homeowner's insurance is written and intended to insure the policyholder's home -- where the named insured resides.  Many homeowner's insurance policies limit structure coverage to the "insured premises", which includes the "residence premises", which are, in turn, defined as the single-family building structure "where you [the named insured] reside."  Residency reduces certain risks of loss, and premium rates for HO policies are based, in part, on the presumption that the named insured resides in the insured premises.  Seems logical and reasonable, don't it?

HO policies that require residency, however, do not define "reside", causing the New York Court of Appeals in 2012 to conclude that the policy term "residence premises", without a definition of "reside", is ambiguous.  In the seminal case of Dean v. Tower Ins. Co. of NY, the Court of Appeals instructed that "[t]he standard for determining residency for purposes of insurance coverage requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain[.]"

Something more than temporary or physical presence.  Some degree of permanence and intention to remain.

On January 15, 2014 plaintiff purchased a single-family home and acquired a homeowner's insurance policy from Allstate.  After closing, plaintiff's father started renovating the home, which was destroyed by fire on February 16, 2014.  Allstate disclaimed coverage on the basis that plaintiff was not residing at the premises at the time of the loss.  Plaintiff sued for breach of contract and, after completion of discovery, moved for summary judgment.  The motion record included the following:
  • the premises had been unoccupied for at least two years prior to its acquisition by plaintiff and had no electrical service, running water or a functioning furnace; 
  • following the closing plaintiff's father did renovation work at the premises nearly every day and had succeeded in stripping the interior walls on both floors of the two-story house and removing much of the existing wiring; 
  • in doing the renovation work, plaintiff's father obtained electricity from a gasoline-powered generator, heated the premises with a wood stove located on the first floor and brought water to the premises that he stored in a tank
  • when she acquired the premises, plaintiff was residing with her father and, shortly before the fire, she had relocated to an apartment;
  • plaintiff testified that she had slept at the premises on several occasions, an average of two to four nights per week, and that she had intended for the premises to be her permanent residence once renovations were completed;
  • Allstate's investigator testified that in a statement he obtained from plaintiff shortly after the fire plaintiff stated that she was not living at the premises; and 
  • in an affidavit submitted in opposition to plaintiff's motion, Allstate's investigator also averred that when he interviewed plaintiff by telephone eight days after the fire, she stated that at the time of the fire she was in the process of relocating from her father's home to the apartment and, notably, that she had not been to the premises during the two weeks immediately preceding the fire and had stayed overnight at the premises only once.
Supreme Court denied plaintiff's motion and plaintiff appealed.

In AFFIRMING the denial of plaintiff's motion for summary judgment, the Appellate Division, Third Department, held:
On this record, plaintiff's summary judgment motion was properly denied. The Court of Appeals has held that evidence similar to the record in this case presented issues of fact regarding residency that precluded the grant of summary judgment (see Dean v Tower Ins. Co. of N.Y., 19 NY3d at 708-709). Moreover, as Supreme Court correctly held, the contradictory statements that plaintiff made regarding the extent of her own physical presence at the premises are alone sufficient to create an issue of fact that may not be resolved by summary judgment.
And predictions on what the jury will find?  Was plaintiff "residing" in the insured premise at the time of the fire or not?

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