Joseph Wobig v. Safeco Ins Co of Illinois, No. 21-2757 (8th Cir. 2022)
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Plaintiffs appealed the district court’s grant of summary judgment in favor of Safeco Insurance Company of Illinois (“Safeco”). The case involved a dispute over the applicability of an “other structure” exclusion in a homeowner’s policy when the building sustaining damage was “used in whole or in part for business.”
At issue is a loss caused by the failure of an in-floor radiant heat system in a pole barn that was occasionally used for business purposes. The Eighth Circuit affirmed the district court’s summary judgment ruling in favor of Defendants. The court concluded that the business use exclusion for other structures precludes coverage for the loss, there is no evidence of bad faith on the part of Safeco, and Safeco had no duty to advise Plaintiffs about coverage.
The court explained that Plaintiffs’ arguments seeking to engraft an additional requirement on the business use exclusion—that the structure be used for “actual business activity”— or that the limited coverage for business property located on the premises somehow changes or modifies the plain language of the business use exclusion are unavailing. Because the policy language is unambiguous and the exclusion is neither obscure nor unexpected, the reasonable expectations doctrine is inapplicable. Thus, Safeco did not breach the contract when it denied coverage.
Further, the court held that there is no other evidence of bad faith in the investigation of this claim. Finally, there is no evidence in the record to support a claim that Plaintiff either relied on the agent to provide appropriate coverage or needed protection from any specific threat.
Court Description: [Erickson, Author, with Gruender and Benton, Circuit Judges] Civil case - Insurance. The policy in question excluded coverage for other structures on plaintiffs' land that were used in whole or in part for business, and as the evidence showed the plaintiffs did use the structure, a pole barn, for business, their loss - damage caused by the freezing of a radiant floor heating system - was not covered; the district court did not err in granting the insurer's motion for summary judgment on plaintiffs' claims for breach of contract, bad faith, negligence and breach of warranty. [ July 18, 2022 ]
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