In New London County Mutual Insurance Company v.Zachem, 145 Conn. App. 160 (2013), the Connecticut Court ofAppeals was called upon, as a question of first impression, todecide if coverage existed when vandalism resulted in an explosionand fire that destroyed the property.

The defendants were the owners of real property located on Route2 in Preston (premises). A single family house and a freestandinggarage were located on the premises; the defendants maintained thehouse as a rental property. The plaintiff issued an insurancepolicy to the defendants that included coverage for the house andthe garage.

The section of the insurance policy entitled ''Perils InsuredAgainst,'' provides in relevant part: ''We insure against risk ofdirect loss to property described in Coverages A [Dwelling] and B[Other Structures] only if that loss is a physical loss toproperty.'' Following that provision is a list of exceptions tocoverage, which provides in relevant part: ''[W]e do not insureloss . . . caused by . . . vandalism and malicious mischief, theftor attempted theft if the dwelling has been vacant for more than[30] consecutive days immediately before the loss'' (vandalismexception). The policy also contains the following provisionrelated to the list of exceptions to coverage, including thevandalism exception: ''[A]ny ensuing loss to property described inCoverages A and B not excluded or excepted in this policy iscovered'' (ensuing loss provision). The policy does not containdefinitions for the terms ''vacant'' or ''ensuing loss.''

A property loss occurred at the premises on September 11, 2008,while the insurance policy between the parties was in full effect.An unidentified intruder stole copper pipes from the house,including breaking and removing a copper propane gas line that ledto a clothes dryer in the basement of the house. The basementfilled with propane gas, which ultimately exploded and caused afire that destroyed the house.

No one had resided at the house since July, 2007, although PeterKnutson periodically visited to do remodeling or maintenance work.He also stored equipment and materials related to his fencingbusiness in the unattached garage. No one was living at the houseat the time of the claimed loss, and the house was not suitable forhabitation at that time. The fire marshal who investigated the firereported that the house did not show any signs of recent occupationat the time of the gas explosion.

The defendants filed a claim for coverage of their loss with theplaintiff. The plaintiff took the position that, pursuant to theterms of the policy, it was not liable because the claimed loss wascaused by vandalism or theft, and the subject premises had beenvacant for more than 30 consecutive days immediately preceding theloss. The plaintiff then filed this declaratory judgment actionasking the court for a ruling that it had no duty to providecoverage for the defendants' claimed loss arising from theexplosion and fire.

The trial court found that the subject premises had been vacantfor more than 30 consecutive days at the time of the explosion andfire and, accordingly, that the defendants' loss fell squarelywithin the vandalism exception in the insurance policy. The trialcourt also rejected the defendants' argument that the explosion andfire was an “ensuing loss” and, thus, a covered loss under thepolicy despite the vandalism exception and that the defendantsfailed to meet their burden of establishing that the policy'sensuing loss provision was applicable in the present case.

In determining whether the terms of an insurance policy areclear and unambiguous, a court will not torture words to importambiguity where the ordinary meaning leaves no room for ambiguity.Similarly, any ambiguity in a contract must emanate from thelanguage used in the contract rather than from one party'ssubjective perception of the terms.

The Random House Webster Unabridged Dictionary defines''vacant'' as ''having no contents; empty'' and, with regard to adwelling specifically, as ''having no tenant and devoid offurniture, fixtures.''

Although no appellate court in Connecticut has had theopportunity to construe the term ''vacant'' in the context of aninsurance policy exception to coverage, courts in otherjurisdictions that have considered the very issue have applied adefinition very similar to the definition applied by the trialcourt, and which, although not binding on a Connecticut court, arepersuasive and consistent with the dictionary definitions.

The plain and ordinary meaning of vacant is that the structureis not lived in and lacks the basic amenities for humanhabitation.

The vandalism exception expressly provides that losses caused byvandalism or theft are not covered “if the dwelling has been vacantfor more than [30] consecutive days.” The “dwelling” isdescribed in the policy as the structure used principally fordwelling, meaning the house, including any attached structures. Thedefendants' garage was unattached and, thus, not part of thedwelling.

Viewed in context of the policy as a whole, the court of appealconcluded that the term “vacant” as used in the vandalism exceptionis susceptible to only one reading and is not ambiguous. Consistentwith the intent of the parties, a vacant dwelling is one that isunoccupied and does not contain items ordinarily associated withhabitation, such as furniture, fixtures or personal property. Thedefinition of ''vacant'' applied by the trial court was thereforelegally and logically correct. Having so concluded, the court ofappeal concluded that the defendants' house had been vacant formore than 30 consecutive days prior to the claimed loss.

The plaintiff argued that the court correctly determined thatthe policy's ensuing loss provision did not apply, arguing that''the ensuing loss provision only applies when an excluded perilsets in motion a covered peril, and the trial court determined as afactual matter that all of the damage to the dwelling was caused bythe excluded peril of vandalism, malicious mischief, and theft.Since there was no second covered peril to trigger the ensuing lossprovision, the court of appeal found no error with the trialcourt's conclusion that the defendants' claim was not entitled tocoverage under the policy's ensuing loss provision.

The owners of the property, the insureds, knew that their rentaldwelling had been vacant for more than a year. They did nothing toadvise their insurer of the vacancy, nor seek coverage for theincreased risk of loss brought about by the vacancy. Here, the“ensuing loss” argument failed because the insureds could not proveto the court that the ensuing explosion and fire were separate andapart from the vandalism and theft that allowed the house to fillwith propane.

It is standard language in almost every first party propertypolicy that there is no coverage if the insured increases the riskof loss by, among other things, allowing the property to be vacantand unoccupied. If the insureds had advised their insurer of thevacancy, they might have received coverage if they added securitywith burglar and fire alarms or secured fencing.

They did not.

Barry Zalma, Esq. CFE, is an insurance coverage attorney,consultant and expert witness. He recently joined FC&S as aconsulting editor.