Hiscox Dedicated Corp Member v. Suzan Taylor, No. 21-3534 (8th Cir. 2022)
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After Defendant’s Arkansas home burned to the ground, her insurer, Hiscox Dedicated Corporate Member Limited (a "capital provider" to an underwriting syndicate doing business within the Lloyd's of London insurance marketplace), declined to pay her for her loss and instead rescinded the insurance policy because she had made material misrepresentations in her insurance application. Hiscox then sued Defendant in federal court, seeking a declaratory judgment that it had properly rescinded the policy and had no obligation to Defendant. The district court agreed with Hiscox and granted it summary judgment.
The relevant question is whether Defendant "had a foreclosure, repossession, bankruptcy or filed for bankruptcy during the past five (5) years." Defendant maintains that the district court erred in concluding that the phrase "had a foreclosure" meant the initiation of foreclosure proceedings.
The Eighth Circuit reversed and remanded. The court agreed with Defendant that the question is ambiguous. Under Arkansas law, the court read the question in its "plain, ordinary, and popular sense," as "the common usage of terms should prevail". Further, the court wrote it sees no indication in any case that the parties meant to adopt Arkansas statutes as the standard to determine the meaning of the words in the application question.
Court Description: [Arnold, Author, with Loken and Kobes, Circuit Judges] Civil case - Insurance. The question on the insurance application in question as to whether Taylor "had a foreclosure" in the past five years was ambiguous, and her negative response was not a misrepresentation entitling plaintiff to rescind the insurance policy on her home; reversed and remanded for further proceedings. [ November 14, 2022 ]
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