Coverage for “Residence Premises”

Canale v. Castlepoint Ins. Co., 64 Misc.3d 1208(A), 116 N.Y.S.3d 861 (N.Y. Sup. Ct. 2019)

This case involved a first-party property insurance dispute in which Castlepoint Insurance Company denied a claim for fire damage to a dwelling configured as multiple single-room occupancies. The policy covered “residence premises” as defined therein, and the insurer denied coverage because the dwelling did not fit within the definition: a one- or two-family dwelling where the named insured resided in at least one of the family units. Castlepoint also denied coverage because the insureds made a material misrepresentation in their policy application by representing that the premises was owner-occupied.

In its motion for summary judgment, Castlepoint established that the policy covered only one- or two-family dwellings that were owner-occupied. There was significant evidence that the insureds did not reside at the premises at the time of the fire, including testimony that the insured “lived down the block” and the insureds’ own tax returns from 2005-2013, in which they claimed rental real estate income, and a statement that no family member used the property for personal purposes during those years.

Further and key to the court’s ruling in Castlepoint’s favor was Castlepoint’s proof that the dwelling was a multiple single-room occupancy residence that did not fall within the Policy’s grant of coverage as a matter of law. The evidence included an affidavit from a fire investigator, a fire department report, violations from the department of buildings, and the testimony of a resident, all of which showed that the premises had eleven rooms with individual locks and door numbers. The rooms contained the possessions (identification cards, prescriptions, etc.) of no less than four individuals who were unrelated to each other and the insureds. Four unidentified individuals were also rescued from the fire. The insureds did not explain who those people were or why they were on the premises. In addition, the insureds could not provide a detailed description of the interior layout of the premises and claimed ignorance as to whether the second floor was rented to anyone. In sum, the insureds failed to refute the overwhelming evidence that the building was configured as a multiple single-room occupancy building rather than a one- or two-family dwelling.

This decision was reported in the New York Law Journal as a Decision of Interest on June 27, 2019. It was also reported in the PLRB Frontlines, July 3, 2019 edition.

Castlepoint Insurance Company was represented by partner Kevin F. Buckley.


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