Thomas v. Industrial Fire & Cas. Co.

• Decision Date: 10 November 1971
• Docket Number: No. 8499,8499
• Citation: 255 So.2d 486
• Court: Court of Appeal of Louisiana — District of US
• Parties: Noah THOMAS v. INDUSTRIAL FIRE & CASUALTY CO.

Page 486

255 So.2d 486

Noah THOMAS v. INDUSTRIAL FIRE & CASUALTY CO.

No. 8499.

Court of Appeal of Louisiana, First Circuit.

Nov. 10, 1971.

Rehearing Denied Dec. 20, 1971.

Thomas A. Durham, Bunkie, for appellant.

France W. Watts, III, Franklinton, for appellee.

Before LANDRY, BLANCHE and TUCKER, JJ.

BLANCHE, Judge.

Defendant, Industrial Fire & Casualty Insurance Company, has taken this appeal from a decision of the Twenty-Second Judicial District Court granting judgment in favor of plaintiff, Noah Thomas, on a policy of fire insurance on plaintiff's building which had been destroyed by fire.

The building was originally constructed for use as a restaurant and beer parlor and was so used for approximately two years. After becoming unable to operate the business himself, plaintiff rented the structure to various tenants for use as a restaurant and beer parlor. After the beer license was revoked, plaintiff decided to convert the structure to a family-type dwelling to be rented to tenants. One tenant, Mr. T. C. Creel, rented the structure as a family dwelling for a period of approximately three weeks, vacating the premises on October 1, 1968.

On or about November 6, 1968, the plaintiff contacted Mrs. Udine Bickham Jones in Franklinton, Louisiana, seeking to obtain fire insurance on the house in question. At that time Mrs. Jones was told that the dwelling was no longer intended for use as a beer parlor and restaurant, and, furthermore, that the building was presently vacant.

Having no insurance facilities of her own to write the coverage requested, Mrs. Jones contacted Mr. T. H. Cutrer, a licensed insurance broker, and requested that he obtain the coverage sought. Thus, it was on the information furnished him by Mrs. Jones that Mr. Cutrer prepared and signed the application.

Being unable to place the insurance through a regularly authorized insurer, Mr. Cutrer submitted an application dated November 6, 1968, for surplus lines insurance covering low value dwellings to Wright General Agency, Inc., a licensed surplus lines broker, who is general agent for the defendant, Industrial Fire & Casualty Company. The application signed by Mr. Cutrer stated that 'all dwelling must be occupied.'

In response to and in reliance upon the application submitted by Mr. Cutrer, Wright General Agency issued Policy No. LV 1--14--49 on behalf of Industrial Fire & Casualty Company in the amount of $4,000 to the plaintiff, Noah Thomas, for the period from November 6, 1968, to November 6, 1969, on a 'one story, c--b and frame tin roof house, 1/4 miles east of Hockley on Hockley-Thomas Road, Washington Parish, Louisiana.' Wright General Agency, Inc., forwarded the policy to Mr . Cutrer, who in turn delivered it to Mrs. Jones, who in turn delivered it to the plaintiff.

The structure in question was destroyed by fire on December 16, 1968. It had been vacant from October 1, 1968, a period of seventy-six days; however, only forty-one of these days had accrued during the existence of the policy of fire insurance.

Defendant refused payment of plaintiff's claim on two grounds: (1) that the insured building had been vacant for a period of more than sixty consecutive days in violation of the express terms of the policy ¹, and (2) that the insurance policy was issued in reliance upon a material misrepresentation of fact contained in the application submitted by Mr. Cutrer stating that 'all dwellings must be occupied.' For the following reasons we reject both of defendant's contentions.

The vacancy clause in question providing that the company will not be liable for any loss occurring when the premises are vacant or unoccupied beyond a period of sixty days is a provision required by state law in all fire insurance policies. ²

We construe the sixty-day vacancy provisions as running from the issuance date of the policy. Under this construction only forty-one days of vacancy had accrued as of the date of the fire. Our construction is buttressed by reference to the 'old' New York Standard Policy adopted by the Louisiana Legislature in 1898. ³ The old standard form policy provided that the policy should be void 'if a building herein described, whether intended for occupancy by owner Be or become vacant or unoccupied and remain so for ten days.' The new standard form ⁴ omitted this provision and substituted the provision heretofore quoted, ⁵ which does not refer to an existing vacancy. In the light of this change in the wording of the policy, which treats the matter prospectively, we are compelled to hold that the sixty-day vacancy period had not run as of the fire on December 16, 1968.

Defendant's second argument is that the insurance policy was issued in reliance upon a...