Calvert County Circuit Court Records
Maryland Arson Fire Loss House Property Vandalism Dwelling Insurance
MUTUAL FIRE INSURANCE COMPANY OF CALVERT COUNTY v. CORWIN L. ACKERMAN, PERSONAL REPRESENTATIVE OF THE ESTATE OF PHYLLIS MORSS, ET AL.
COURT OF SPECIAL APPEALS OF MARYLAND
162 Md. App. 1
April 13, 2005, Filed
Mutual Fire denied the claim for two reasons: (1) the house was no longer “used principally for dwelling purposes” as required under the policy because the property had been “vacant for months, with no utility service,” and (2) arson was considered to be a form of vandalism, which was specifically excluded from coverage because the house had been vacant for 30 days prior to the loss. The trial court held that the house had retained its character as a dwelling and that arson was not vandalism under the policy language.
ISSUES:
I. Did the circuit court err in finding that the house on the property was used principally for dwelling purposes within the meaning of the insurance policy?
II. Did the circuit court err in finding that the vandalism exclusion in the dwelling section of the insurance policy did not operate to exclude coverage for damage caused by arson?
ISSUE- I:
The terms “dwelling” and “dwelling purposes” are not defined under the policy. Therefore, the appellate court accorded them their usual, ordinary, and accepted meanings. The dictionary definitions, while incorporating the concept of occupancy by a person or persons, do not suggest that actual, continuous occupancy is required in order for property to qualify as a dwelling or a building used for dwelling purposes. Nor does the policy itself state or suggest that occupancy by the insured or anyone else is required to sustain coverage. Indeed, Mutual Fire concedes that, in this case, vacancy alone did not justify the denial of coverage. The term dwelling, as defined by [the arson statute], would clearly include a house in which no one is actually residing at the time of the arson because a house generally is ‘adapted for overnight accommodation. It is undisputed that the house was used as a dwelling until the last tenants moved out. The circuit court properly placed the burden on Mutual Fire to prove that it was no longer a “dwelling” or being “used principally for dwelling purposes,” because this contention was in the nature of an affirmative defense. The mere facts that the tenants had moved out, the property needed some repair, and the utilities were turned off would not alone have been sufficient to meet Mutual Fire’s burden on its affirmative defense. However, the Court ruled that the summary judgment record also contained other facts, which, in combination with these facts, are sufficient to create a material dispute of fact on the issue of whether the property was used principally for dwelling purposes. Accordingly, the appellate court vacated the circuit court’s summary judgment in favor of O’Brien and remand for further proceedings on the issue of whether the house was “used principally for dwelling purposes.”
Mutual Fire contended that arson is a form of vandalism, and therefore, because the property was vacant for at least 30 days before the fire, the loss is excluded from coverage. The term “vandalism” is not defined by the policy. The policy is independently ambiguous because “fire” and “vandalism” are listed as separate perils insured against for personal property coverage. a reasonable layperson reading only the dwelling coverage section could infer, under the broader definition, that “vandalism” included intentionally set fires. On the other hand, looking at the policy as a whole, the distinction between “fire” and “vandalism” with regard to personal property could cause a reasonably prudent layperson to conclude that they were also different for dwelling coverage purposes. Under this interpretation, fire, even though incendiary in nature, would not be considered a form of vandalism for dwelling coverage purposes. Because of this ambiguity, extrinsic evidence is admissible to show the intention of the parties to the contract. And because the parties filed cross motions for summary judgment, and there was no trial, they may not have offered disputed extrinsic evidence that was available. Accordingly, the appellate court remanded this case to the circuit court for the receipt of any admissible extrinsic evidence that the parties may offer on this issue.
The appellate court vacated the summary judgment entered by the circuit court in favor of O’Brien on both issues I and II, and remanded for further proceedings below. Such proceedings may include further motions for summary judgment, as well as trial on disputed facts.
Disclaimer:
These summaries are provided by the SRIS Law Group. They represent the firm’s unofficial views of the Justices’ opinions. The original opinions should be consulted for their authoritative content.
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