In a case of first impression in Illinois, a unanimous panel of the state’s Appellate Court recently addressed the interplay between a vacancy clause and a mortgagee provision and held that the insured’s failure to comply with the former did not preclude recovery by the mortgage company after vandals did over $2 million in damage. In Old Second Nat’l Bank v. Indiana Ins. Co., 2015 IL App. (1st) 140265, — N.E.3d –, 2015 WL 1283867, 2015 Ill. App. LEXIS 185 (Mar. 20, 2015), it held that the vacancy clause was a condition subsequent to coverage and that its violation therefore only operated to bar the policyholder’s claim even though the structure – unbeknownst to the insurer — had been vacant since the policy’s inception.
The property at issue was a former slaughterhouse in Askum that had been vacant since 2005. The policyholder (Brothers Future Holdings) acquired it in 2007 intending to use it for a contract cooking venture, but that business turned out to be stillborn. Property insurance was duly procured, based on an application reciting the structure was “100% owner-occupied.” The mortgagee came on board in August of 2007, and the insurer’s agent was contacted by the mortgage company and issued an “Evidence of Property Insurance” document to the mortgagee indicating that coverage was in place.
The insurer never inspected the facility and was unaware that it was vacant. The mortgagee’s loan officer did inspect the building in 2007, however, and the mortgagee knew that the structure was unoccupied. Read more ›
Last month, we discussed a recent Texas Supreme Court decision that enforced an anti-concurrent causation (ACC) clause. The month of April also saw a unanimous panel on Iowa’s intermediate level appellate court do the same thing. In 
The policyholder White Mountain owned a hospital in Springerville, Arizona. On May 29, 2011, a blaze was started by an abandoned campfire in the nearby Bear Wallow Wilderness Area. The wildfire ultimately burned 841 square miles in eastern Arizona and western New Mexico, and it led to the temporary evacuation of Springerville. Residents weren’t allowed to return until June 13th, and the hospital itself was closed until the following day.
On the TV show “Friends,” Phoebe Buffay used to entertain patrons at the Central Perk coffee shop with her song “Smelly Cat” (“Smelly cat, smelly cat, what are they feeding you, . . . “). The lyrics would have resonated with Doug and Gayle Mellin, the owners of a condominium in Epping, New Hampshire. After they moved in, the Mellins noticed a cat urine odor coming from a downstairs neighbor’s unit through an open plumbing chase in the kitchen wall. The stench was so severe that the town building inspector directed the couple to relocate temporarily and have the unit professionally remediated, but efforts to do that were unsuccessful. The policyholders vacated permanently after living there only three months.
The policyholder owned The Pointe Apartments – a complex in Galveston, Texas that was heavily damaged when Hurricane Ike came ashore on September 13, 2008. Lexington afforded the primary layer of property insurance protection under a $25 million all-risk contract of insurance that covered dozens of local apartment complexes. Wind was not an excluded peril, and Lexington paid its building consultant’s estimate ($1,278,000) for the wind damage in full.
The April 8, 2015 decision of the California Court of Appeals in 
The case was a proposed class action by a West Liberty, Kentucky dentist whose office was damaged by a tornado and an Owingsville, Kentucky homeowner whose residence was hit by a fire. In both cases, the State Farm policies afforded replacement cost coverage but authorized the carrier to make its initial payment on an ACV basis. In the two cases, the insurer calculated ACV by determining replacement costs and then depreciating both materials and labor. The policyholders argued that labor, unlike construction materials which logically age and wear and tear, was not subject to depreciation.
The policyholder had a rental property in a “relatively isolated location” that was vacated by the last tenant in February 2010. On December 20, 2011 the home was damaged by a fire. Subsequent investigation indicated that it was a “warming fire” set by a transient that got out of hand when he attempted to kick the burning firewood out the back door.
Oklahoma has experienced a remarkable rise in earthquake activity in recent years. According to the Oklahoma Geological Survey, the state had 567 quakes of Magnitude 3.0 or greater in 2014. That was a five-fold increase over 2013, a 14-fold increase over the 2008-2012 average, and a 100-fold increase over earlier years. The 2014 number exceeded the total number of earthquakes in Oklahoma during the preceding 30 years combined; no state in the lower 48 states, including California, saw more quakes last year.
Effective in 2005, Florida statutes defined “sinkhole loss” to mean “structural damage to the building, including the foundation, caused by sinkhole activity,” and they left the all-important term “structural damage” undefined. Homeowner’s policies issued in the state employed that formulation until May 17, 2011, when Florida adopted a much narrower five-part definition of structural damage that applied to policies affording coverage for sinkhole loss, and many courts construing the 2005 language held that the term “structural damage” meant nothing more than “damage to the structure.” Several weeks ago in 