Two appellate courts recently examined the scope of a homeowners policy’s requirement that the insured reside at the property at the time of loss. Both cases involve claims of loss involving a house fire, and in both cases, claims were denied on the basis that the homeowner was not residing at the property at the time of loss. Both court decisions agree that where the homeowners policy requires that the homeowner reside at the property, evidence of simultaneous residence in multiple houses does not necessarily defeat the insured’s claim. However, evidence of actual residence is required.
In Patrick v. State Farm Fire & Cas. Co., the Sixth Circuit affirmed a jury instruction concerning the definition of “reside” in a homeowner’s policy. 2018 U.S. App. LEXIS 6288, 2018 Fed App. 0131N (6th Cir. March 14, 2018). In February 2014, Clara Patrick applied for a homeowner policy, stating that the plumbing and heating were adequate and properly installed, and further, that the property would be her primary residence. The house caught fire in early April 2014. Evidence in the case showed that (1) the house was uninhabitable (because it had “no running water, no working toilets, no furnace, [and] no kitchen cabinets”) a month prior to Patrick’s application, and (2) the fire was set intentionally.
State Farm denied the claim in part because Patrick never resided in the house. At trial, Patrick argued that the jury instruction should define “reside” as an intent to live in the future based on a Michigan Supreme Court case, Heniser v. Frankenmuth Mut. Ins. Co., 534 N.W.2d 502 (Mich. 1995). State Farm argued that “reside” meant “actually live in.” The trial court left to the jury what the term “reside” meant, but instructed the jury that a person may simultaneously reside at more than one location. The jury found in favor of Allstate. On appeal, Patrick argued that the trial court’s jury instruction erroneously omitted that “reside” can mean to an intent to live in the future. The Sixth Circuit disagreed, and found that Heniser does not hold that “reside” requires an “intent to live in the future.” While the Heniser court recognized that “[i]n some contexts, [reside] means something more than actual physical presence; it includes the intent to live at that location at sometime in the future,” the court also stated that “[i]n other contexts, the term requires actual physical presence.” (emphasis added) The Heniser court determined that the point of interpreting ambiguities in a contract is not “furthered by allowing insureds to employ a sophisticated version of a term to create an ambiguity.” Without deciding whether “reside” is defined as “actual physical presence” or “intent to live,” the Michigan Supreme Court determined that the insured failed to meet either standard. The Sixth Circuit also noted its approval of the district court’s instruction that a person may reside at multiple dwellings simultaneously.
A similar issue was presented before a New York appellate court in Cotillis v. N.Y. Cent. Mut. Fire Ins. 2018 NYLJ LEXIS 778 (3d Dept. March 16, 2018). In Cotillis, the homeowner made a claim under her homeowner’s policy following a fire. Cotillis was providing child care services for her granddaughter at her son’s house on a “temporary basis,” and other than bringing a bed and dresser, left her other furnishings at the insured premises. The insurer disclaimed coverage on the grounds that Collins did not reside at the house on the date of loss. The jury found in favor of Collins and the insurer appealed.
The Third Department found that Cotillis presented sufficient evidence to meet the standard of residency required under the policy: “[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.” Namely, the court found that Cotillis intended that her stay at her son’s home was temporary: she never changed her mailing address, she visited the insured property multiple times a week to collect mail and perform chores, and left most of her furnishings at the insured premises.
The decisions in Patrick and Cotillis provide further appellate insight into the definition of “reside” in homeowner policies as interpreted by Michigan and New York law. These can be fact-intensive inquiries warranting thorough discovery together with analysis of applicable case law.
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