Speth v. State Farm Fire & Casualty Co.

• Citation: 35 P.3d 860,272 Kan. 751
• Decision Date: 07 December 2001
• Docket Number: No. 86,707.,86,707.
• Court: United States State Supreme Court of Kansas
• Parties: STEVEN L. SPETH, Executor of the Estate of Gertrude Swesh, Deceased, Appellant, v. STATE FARM FIRE & CASUALTY COMPANY, Appellee.

272 Kan. 751

35 P.3d 860

STEVEN L. SPETH, Executor of the Estate of Gertrude Swesh, Deceased, Appellant, v. STATE FARM FIRE & CASUALTY COMPANY, Appellee.

No. 86,707.

Supreme Court of Kansas.

Opinion filed December 7, 2001.

Timothy J. King, of Speth & King, of Wichita, argued the cause and was on the brief for appellant.

Tristram E. Felix, of Wallace, Saunders, Austin, Brown & Enochs, Chtd., of Wichita, argued the cause, and Alan E. Streit, of the same firm, was with him on the brief for appellee.

The opinion of the court was delivered by

SIX, J.:

This appeal arises out of State Farm Fire & Casualty Company's (State Farm) denial of coverage on a homeowner's policy for physical damage sustained to the insured's home due to vandalism. Coverage was denied by State Farm under a policy exclusion for vandalism losses that occur when a house has remained "vacant" for more than 30 consecutive days. Plaintiff Steven Speth, Executor of the Estate of Gertrude Swesh, alleged that the term "vacant" was ambiguous and that State Farm improperly denied coverage for the insured's vandalism loss. The district court applied the vandalism exclusion and granted State Farm's motion for summary judgment. The question is whether the district court erred in finding that the word "vacant" in the State Farm policy was unambiguous and that the policy exclusion applied.

Our jurisdiction is under K.S.A. 20-3018(c) (transfer on our own motion).

Finding no error, we affirm.

FACTS

The facts were stipulated. The key issue was submitted to the district court on cross-summary judgment motions. Gertrude Swesh's home was insured by State Farm. In the fall of 1998, Swesh was diagnosed with terminal cancer, and in early November 1998, she moved into a nursing care center. She died on May 3, 1999. Steven Speth was appointed the Executor of Swesh's estate.

On or about September 16, 1999, the Swesh home was vandalized. At the time of the vandalism: (1) an alarm system was in place and operable, but had been turned off so that the home could be shown by realtors, (2) the home was empty of all contents except a stove and a refrigerator for more than 30 consecutive days, and (3) the home was serviced by water, gas, and electric utilities.

Speth filed a vandalism loss claim with State Farm. State Farm, relying on the exclusion, denied coverage. The homeowner's policy excluded coverage for vandalism losses when a house has been "vacant" for more than 30 consecutive days. The policy did not contain a definition of "vacant."

The district court found that the term "vacant" was not ambiguous. It also found that "the Swesh house was not occupied for substantially all the purposes of a dwelling place" and concluded that the house was vacant as that term is understood in its plain and ordinary usage. Thus, the vandalism claim was excluded from coverage because the home had been vacant for more than 30 consecutive days before the vandalism occurred.

DISCUSSION

The resolution of this case presents a question of law requiring our interpretation of the State Farm policy. See Harris v. Richards, 254 Kan. 549, 552, 867 P.2d 325 (1994). Speth, as executor, argues that the district court erred by finding, as a matter of law, the term "vacant" was unambiguous and that the policy exclusion applied to the vandalism loss. We disagree.

The burden of proving the application of the exclusionary clause falls upon State Farm. Central Security Mut. Ins. Co. v. DePinto, 235 Kan. 331, 335, 681 P.2d 15 (1984). Here, the exclusionary clause said, in pertinent part:

"1. We do not insure for any loss to the property described in Coverage A which consists of, or is directly and immediately caused by, one or more of the perils listed in items a. through n. below, regardless of whether the loss occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:

....

e. vandalism or malicious mischief or breakage of glass and safety glazing materials if the dwelling has been vacant for more than 30 consecutive days immediately before the loss. A dwelling being constructed is not considered vacant." (Emphasis added.)

Speth contends that the term "vacant" is ambiguous because it was not defined in the policy. However, under Kansas law, "the fact that an insurance policy does not define each term within it does not somehow make an undefined term ambiguous; ambiguity arises only if [the] language at issue is subject to two or more reasonable interpretations and its proper meaning is uncertain." Harman v. Safeco Ins. Co. of America, 24 Kan. App.2d 810, 816, 954 P.2d 7 (1998). Thus, the absence of a definition does not necessarily render the word "vacant" ambiguous.

State Farm advanced the opinion of Daniel J. Sevart, a Wichita attorney, on the meaning of "vacant." Without support, Speth argues that Sevart's report shows that the policy was ambiguous. The Sevart report said, in part:

"The policy provides no definition of `vacant,' and thus we look to the common definition of the term. Webster's New Collegiate Dictionary, at p. 1290 (G. & C. Merriam Company, 1977), defines `vacant,' so far as pertinent here, `as being without content or occupant,' and refers to the term `ABANDONED' in reference to `a [vacant] estate,' and for synonym states `see EMPTY.' Thus, from the common dictionary definition, it is clear that a house which remains furnished, although unoccupied by a living person, is not `vacant.'... We accordingly have no difficulty in concluding that the house in question became `vacant' when the furniture was removed in July of 1999, and not when Ms. Swesh was moved to the Masonic Home."

Although the district court expressed concern from its review of the Sevart report, it found that there was no evidence that the property was "forlorn" or "abandoned"; rather, it found that the house was being cared for by the executor to the extent that it had utilities and was available for real estate agents to show.

Speth turns to Kansas case law to advance his contention that Kansas courts have applied various meanings to the term "vacant." We disagree with the "ambiguity" conclusion Speth reaches from a reading of our cases.

We next take up a review of those cases. In Robinson v. Insurance Co., 91 Kan. 850, 139 Pac. 420 (1914), a fire insurance policy contained a provision that excluded coverage if the insured building became and remained "vacant" for 30 days, unless notice was given and a vacancy permit was issued. We applied the reasoning that the policy contemplated "the protection of a guardian of the premises, some individual in charge of them who would exercise a preserving superintendency over them." 91 Kan. at 854. The subject properties in Robinson, a dwelling house and a barn, contained a pile of clothing, a sofa, a baby carriage, a stove, two beds without mattresses, some feed, and one or more horses. We found that the house and barn were not vacant. The policyholder satisfied the purpose of the vacancy exclusion because he occupied the premises "for substantially all the purposes of a dwelling place except that sleeping there at night was deferred and meals were eaten there only occasionally." 91 Kan. at 855.

In Insurance Co. v. Johnson, 69 Kan. 146, 76 Pac. 419 (1904), an insurance policy against loss by fire, lightning, tornado, and windstorm covered a dwelling house, a double corncrib with a stable addition, and hay and grain. The policy contained a provision that it would become void "if the above-mentioned premises... become vacant for thirty days." 69 Kan. at 147. At the date of the policy, the house was occupied as a dwelling by a tenant of the land. Later, the tenant moved away, and the owner farmed the land from his own residence on an adjoining tract. During that time, the double corncrib was used to house unused farming implements. More than 30 days after the removal of the tenant from the house, a windstorm destroyed the double corncrib.

In determining whether the premises were vacant within the meaning of the insurance provision, this court quoted from Moore v. Insurance Co., 64 N.H. 140, 142, 6 A. 27 (1886):

"`The meaning of the words "vacant and unoccupied," as used in the contract of insurance, is that which the parties intended to give them; and that intention is to be found from the whole instrument, the subject-matter of the contract, and the situation of the property insured. The

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