Traub Lieberman Straus & Shrewsberry attorneys Meryl R. Lieberman and Dawn M. Warren obtained summary judgment in a declaratory judgment action in favor of an insurer based on the Occupancy Endorsement contained in a Dwelling Policy.
May 27, 2009

HAWTHORNE, New York - On May 6, 2009, in Rod Eddie et al. v. Scottsdale Ins. Co., (Case No. 07-CV-3457), the United States District Court for the Southern District of New York, held that the subject home was "unoccupied" because it was not being used as the customary or usual place of habitation or abode of any resident or tenant, for 60 days preceding the fire loss as required under the terms of the policy’s Occupancy Endorsement.

The policy’s Occupancy Endorsement provided, in part, that "[t]he Company shall not be liable for loss occurring while a described building , whether intended for occupancy by owner or tenant, is vacant, or unoccupied for more than sixty (60) consecutive days immediately before the loss." The policy did not define "vacant" or "unoccupied."

In October 2005, plaintiffs Rod Eddie and Paula Eddie purchased a two-family home with an attached garage with the intention of using it to store Mr. Eddie’s business equipment. At the time the plaintiffs purchased the home it was occupied by tenants living in the first and second floor apartments. On the day they purchased the property, Mr. Eddie informed the tenants that they had to move out. The last tenants vacated the house in February or March 2006. From that time until the August 1, 2006 fire loss, the home was not used for residential purposes. No running appliance were left in the house, and no additions or renovations were made to the home. The doors leading into the home were nailed shut to prevent access. The only remaining unsecured access to the house was through the attached garage’s roll-up door. Mr. Eddie and his employees utilized the attached garage to store and fix business equipment and were at the premises three to five days per week for this purpose. Mr. Eddie, however, did not authorize his employees or anyone to stay in the house, and no work was performed inside of the home from the time the last of the tenants moved out until the fire. Mr. Eddie stored personal items, including antique lawn mower parts, glassware, etc. inside the home and attached garage.

On August 1, 2006, a fire occurred inside of the home when a lamp being used to dry marijuana caused a mattress to catch fire in the second floor bedroom. As a result of the fire, the home was eventually demolished. Plaintiffs claimed damages under the policy issued by Scottsdale for loss of the home and demolition costs.

In granting Defendant's motion for summary judgment, the Court held that Mr. Eddie and his employees’ regular visits to the property to maintain it and store personal items on the property, was insufficient to create occupancy because it is the "regular presence of inhabitants that make occupancy." The court held that the term "unoccupied" is unambiguous, and that actual residence is required for a dwelling to be "occupied" or that, at a minimum, there must exist the intent to reside in or inhabit the dwelling. Here, the court stated it is "it is beyond dispute that [the subject home] was "unoccupied" as that term applies to a dwelling, at the time of the fire, and throughout the sixty days prior to the fire, because it was not the customary or usual place of habitation or abode of any resident or tenant, including plaintiffs."