Houses are often home. Not all houses are home. Not all properties with houses are homes or residential premises.
Insurance policy never covers all possible potential exposures that the insured faces. Under their terms, the policy limits their exposure based on the insured's requirements and needs and an insurer's willingness to take that risk.
In Shelley Lynn Yocom v RAM Mutual Insurance Company, A18-1320, Minnesota State of the Appeal Court (April 15, 2019), a person seeking compensation from an insurer claimed that a motocross raceway was part of a residential area that gave the owner of the property the right to liability protection even though the damage occurred at Midway Recreation Park.
Yocum fought from behind by a golf cart powered by Jamey Swanson. The property where the course is located is jointly owned by Jack and Cynthia Tribal Brothers, who also serve as officers in the raceway corporation. In addition to the race track, there is a home on Stamschrors' 40-hectare property.
In the accident, Swanson had homeowners insurance with respondent RAM Mutual Insurance Company. Policy Incidental Liability Coverings includes: "Motor vehicle protection. We pay for bodily injury or property damage that: a. Occurs on insured premises and is the result of ownership, operation, maintenance, use, loading or unloading of: (1
Following the accident, Yocom sued Swanson, Stamschrors, Midway Recreation Park , Inc. and the unit that rented Midway Recreation Park for the race. Yocom claimed various irregularities regarding the use, maintenance, and monitoring of the raceway. She settled her claims against Swanson for his $ 300,000 liability limit under a Miller-Shugart agreement. She then sued the insurer to recover that amount from RAM Mutual.
Both parties moved for a summary assessment of whether the policy provides coverage to Swanson. In support of her movement, Yocom filed a tax bill for the county administrative board in 2013 which shows that Stamschrors' property is classified as tax purposes for agricultural households and residential buildings.
The court ruled that the policy does not provide cover for liability since Midway Recreation Park is not a "residential area … used by the insured." Therefore, the court granted a summary judgment to RAM Mutual.
The interpretation of an insurance policy is a legal issue that is applied to the facts presented. Insurance policy, like other agreements, is governed by the language used, which is given its usual and accepted meaning. Since the insurer prepares the insurance policy, all ambiguities are interpreted in favor of the insured, but the court is not entitled to read an ambiguity in the ordinary language of an insurance policy to interpret it against the person preparing the contract.
Yocom claimed that the district court failed by interpreting "housing" to exclude the property on which it was damaged. She argued that the district court failed to "ignore" evidence that the county classified the entire property as a residence.
The accident did not occur at "residential premises".
It is undisputed that the Swanson golf car drove at Accident's time is a "recreational vehicle" to cover claims for damages. Consequently, the sole issue of Swanson is driving the golf cart on "the part of residential premises that is not owned by an insured while temporarily used by an insured."
The policy does not define "residential buildings". However, it defines "Residential" as "a building primarily used for family residence purposes". When reading together, "housing" refers to a building where someone lives.
The policy generally defines "insured premises" as "the dwelling displayed on declarations as the described site" and "related private structures and foundations on that site." The unfair liability covers this definition to residences owned by anyone other than that insured, but does not change the general definition of "insurance premises". In other words, the policy refers to coverage for injuries that occur in private family homes.
About this meaning of "housing", the Minnesota Appeal Court could only conclude that Swanson is not entitled to accidental liability insurance in connection with this accident. Yocom does not provide evidence that the Swanson area used the raceway – was "a part of residential premises". She does not claim that the race track was a home in nature. The accident occurred when she and Swanson participated in a general motocross event. She offers no evidence that any person actually lived in the house which is located on 40 hectares of property or the house's proximity to the racetrack. And in all their submissions to the district court, Yocom does not even explain that Swanson used the property for residential purposes. Therefore, the Board of Appeal considered that the policy did not cover Yocom's damages.
County Tax Records do not create genuine material problems.
Yocom urged the court to treat county tax information as conclusive evidence of her injuries while Swanson temporarily used another's residential premises. Alternatively, she claimed that the documents created a factual question that excludes a summary judgment.
The county council's tasks do not intend to describe how any part of the property is actually used, let alone the raceway section where the public motocross event took place. Just creating a metaphysical doubt about a matter of fact is not sufficiently evident in relation to a substantial part of the matter to allow reasonable people to draw different conclusions and not defeat the summary domain.
The undisputed material facts show Swanson and Yocom were both at the racetrack, for a general motocross run, when the accident occurred. There is no evidence that any party was in or near a house. And even though we tell Yocom's argument that a property can be used simultaneously for both residential and residential purposes, it does not offer any evidence of such use of Stamschrors. In summary, RAM Mutual's policy does not cover Yocom's claims against Swanson.
Only one lawyer would have the madness of claiming that a raceway is a residential location. Since the accident occurred while both participants participated in a motocross event and were not in, on, or even near a house, the policy language defeated the coverage. It is amazing that even after losing in the trial, the parties were willing to proceed with appeals about such narrow demands for coverage.
© 2019 – Barry Zalma
This article and all blog posts on this site, digest and summarize cases published by the courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, condensed to facilitate reading and convey the author's views in each individual case.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance management, bad faith assurance, and insurance fraud nearly equal for insurers and policyholders. He also serves as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance cover and law firm and more than 50 years in the insurance industry. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual liability magazine / ACE Legend Award.
Over the past 51 years, Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims to become insurance managers.
Insurance is, and will always be, a business of utmost good faith. All parties to the insurance contract agree that in good faith and fair trade do nothing to deprive the other benefits of the contract. The insurer is, and always is, nothing but a contract.
The insurer promises the insured that if a contingent or unknown loss arises as a result of a risk or risk insured against and not excluded, the insured pays compensation as
The insured promises to truthfully reveal the risks for the insurance's supply, the insured's property , operations were insured and / or the insured's liability risks. The insured also promises to honestly present a claim, prove the claim and collaborate with the insurer in his investigation. If the parties to the insurance contract treat each other fairly and in good faith, the policy is viable, receivables are paid quickly and to the insurer's and the insured's satisfaction.
Only if a true injury occurs can the insured refrain from contract measures and lawsuits in damages. Contract crimes, after centuries-old tradition, are not an injury and cannot and should not be considered as a victim. Tort of Bad Faith has served its purpose and now causes more problems than it solves. It is time for the courts and state legislators to cancel the damages and return the contractual damages.