Two days ago, Minnesota’s highest court unanimously held that a mortgagee’s recovery for vandalism damage to a vacant building is only barred by the vacancy clause if the insured’s acts caused the vacancy. The decision is Commerce Bank v. West Bend Mut. Ins. Co., 2015 WL 6498468, 2015 Minn. App. LEXIS 85 (Minn., Oct. 28, 2015) If breached, the vacancy clause still automatically operates to void coverage for the insured, but it does not necessarily do the same for the mortgagee, and the determination entails addressing a question of fact. The policyholder had a building in Burnsville that had been vacant for four months when the mortgagee/bank was added to the contract of insurance. Seven months later, while still vacant,…
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Minnesota Harmonizes the Mortgage Clause and the Vacancy Clause
Tagged with: Minnesota, Mortgage Clause, Vacancy Clause
Posted in Mortgagees, Vacancy and Unoccupancy, Vandalism
Posted in Mortgagees, Vacancy and Unoccupancy, Vandalism
Oklahoma Court Holds the Policyholder Can Also Be the Vandal
Earlier this week an Oklahoma federal court addressed a mortgagee’s claim for vandalism loss – a topic we also discussed in Wednesday’s post. In American Modern Home Ins. Co. v. Tulsa Fed. Credit Union, 2015 WL 2372549, 2015 U.S. Dist. LEXIS 64491 (E.D.Okla., May 18, 2015), the court rejected an insurer’s argument that because the vandalism was done by the insured, it could not constitute the covered peril of “vandalism” in a situation in which the policy neglected to define that term. The insured owned a house and secured a homeowners policy that also extended coverage to his mortgagee. The mortgage company instituted foreclosure proceedings and the policyholder vacated the dwelling, but only after removing fixtures and damaging property to…
Tagged with: Mortgage Clause, Oklahoma
Posted in Ambiguity, Homeowners Coverage, Loss Payees, Mortgagees, Theft or Dishonesty, Vandalism
Posted in Ambiguity, Homeowners Coverage, Loss Payees, Mortgagees, Theft or Dishonesty, Vandalism
