Motion for reconsideration granted and plaintiff’s waiver and estoppel claims dismissed where defendant was able to show it had timely reserved its rights with respect to property damage claim.

This matter arose due to the plaintiff’s claim for property damage under his homeowners' insurance policy with the defendant following two fires at his residence. The policy provided that it was void if any insured “intentionally concealed or misrepresented any material fact or circumstance relating to this insurance, whether before or after a loss.” The first fire occurred on July 3, 2009. A second fire subsequently occurred at the subject property on July 25, 2009. It was later determined that the first fire had been intentionally set. As a result, State Farm denied the plaintiff’s claim as to the first fire due to the plaintiff’s breach of the concealment and fraud provision of the policy. It also advised that it was retroactively voiding the policy as of July 3, 2009; thus, no coverage would be afforded for the second fire. The plaintiffs subsequently sued State Farm for breach of contract and bad faith and argued that State Farm had waived its right to void the policy and was estopped from asserting lack of coverage. State Farm moved for summary judgment. The court denied the motion with respect to the breach of contract and waiver/estoppel claims but granted the motion with respect to the bad faith claim. State Farm filed a motion for reconsideration, asserting that, due a clerical error, it had failed to provide the court with two reservation of rights letters, which had previously been provided to the plaintiff. The court held that its prior denial of summary judgment on the plaintiffs’ waiver and estoppel claims relied on clearly erroneous facts due to a clerical error. In light of the newly submitted evidence, the court held that there was no outstanding dispute regarding the validity, sufficiency or timeliness of State Farm’s reservation of rights as to the July 3^rd fire. Thus, there was no genuine issue of material fact related to the plaintiffs’ waiver and estoppel claims, and summary judgment was entered in favor of State Farm.

Case Law Alert - 1st Quarter 2013