The Supreme Court of Appeals of West Virginia, the state's highest court, has ruled that an insurer did not waive its policy's vacancy provision by continuing to renew the policy after it became aware, at the time of a vandalism claim, that the building was vacant.
The Case
In 1997, Mohammed Ashraf, M.D., and his wife purchased a building in Fairmont, West Virginia, at a tax sale. Dr. Ashraf's efforts to rent out the building did not materialize and the building became vacant.
In 2009, the building was broken into and vandalized.
State Auto Property and Casualty Company, which insured the building, denied coverage for the damage, advising Dr. Ashraf that the claim was for a clear uncovered loss under the policy because the building was vacant.
Following the 2009 loss, State Auto continued to reissue, and Dr. Ashraf continued to repurchase, the policy for the vacant property. Over the years, the insurance premium and the amount of coverage on the vacant structure both increased.
On October 29, 2012, the building was damaged by fire and was a total loss.
State Auto determined that the fire qualified as a covered cause of loss and it paid Dr. Ashraf for a total loss of the building. However, because the building was vacant at the time of the fire, pursuant to the policy's vacancy provision, State Auto reduced the amount it paid by 15 percent.
Dr. Ashraf sued. He argued that State Auto had waived the application of the vacancy provision following the 2009 vandalism claim by continuing to renew the insurance policy after it became aware, at the time of the 2009 vandalism claim, that the building was vacant.
The trial court granted State Auto's motion for summary judgment, and the dispute reached West Virginia's highest court, the Supreme Court of Appeals.
The Supreme Court of Appeals Decision
The court affirmed, holding that State Auto did not waive application of the policy's provision that reduced coverage on the building by 15 percent because the building was vacant at the time of the fire.
In its decision, the court explained that State Auto became aware that Dr. Ashraf's building was vacant in 2009 but that Dr. Ashraf, who was made aware of the vacancy provision at that time, continued to maintain coverage on the building.
It then agreed with the trial court that Dr. Ashraf failed to present “clear and convincing evidence” that State Auto had intentionally relinquished its right to invoke the vacancy provision that reduced coverage for his fire loss by 15 percent.
The case is Ashraf v. State Auto Property and Casualty Ins. Co., No. 18-0382 (W.Va. May 20, 2019). Attorneys involved include: David A. Jividen, Chad C. Groome, and John R. Angotti (for Mohammed Ashraf, M.D.); Trevor K. Taylor (State Auto Property and Casualty Company).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].