No Defense Obligation Where Home Fails To Fall Within Definition Of “Insured Location”
In the unpublished case of Subkoski v. The Standard Fire Insurance Company, No. B21800 (July 21), Division Four of the Second Appellate District considered the trial court’s decision that Standard properly refused to provide a defense for a lawsuit brought by a purchaser of a home constructed by the appellants on land they owned. Standard’s position rested on two prongs: for any damage that arose prior to the sale of the property, the exclusion in the policy for damage to property owned by appellants precluded recovery; and, for any damage that arose after the sale, recovery was precluded because the subject property was no longer an “insured location” by virtue of the fact that appellants did not reside in it. There was no dispute on appeal that the exclusion for property “owned” by the insured that is not an “insured location” applies to both property the insured “owned” at the time of injury and property previously owned by the insured, but belonging to a third party at the time injury occurred. See Preston v. Goldman (1986) 42 Cal. 3rd 108.
That left the question of whether the property was an “insured location.” The policy required in paragraph f. that an “insured location” be one “being constructed.” That did not apply. Alternatively, it could be an “insured location,” it was argued, because it was listed on the declarations page. But that alternative also mandated that it be a location “where [appellants] reside” or a location “used by [appellants] as a residence.” This could not be demonstrated, the Court held. The fact that appellants allegedly failed to maintain the property or performed improper repairs, it was reasoned, could not be stretched to mean that they thereby lived on the property after sale. And it made no difference to the Court that the the declarations page stated that the subject property was an “[a]dditional residence occupied by the insured” when the facts showed otherwise.
July 21, 2010
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