Michael sold his home to the Taylors. He carried back a second mortgage for the couple who bought the home. Allstate Insurance Co. issued a homeowner’s insurance policy to the Taylors on the residence.
Unfortunately, the Taylors didn’t make their mortgage payments. Michael foreclosed on April 26 and took title to the home. But the Taylors remained in possession. Michael says he notified Allstate on May 1 of his ownership. In August, the insurance policy was renewed but Michael was not named on the policy as the new owner.
On Jan. 16, the home was destroyed by fire. Allstate denied Michael’s claim and that of the Taylors who were still living in the house. Although the Taylors assigned their interest in the insurance proceeds to Michael, Allstate still refused to pay. Michael sued Allstate, which argued it didn’t have to pay the claim because Michael was not a named insured.
Should Allstate be made to pay this fire loss claim to either Michael or the Taylors?
The judge said no.
The general rule of insurance law limits a claim to the named insureds, the judge began. In addition, that named insured must have an insurable interest, such as holding title to the property, he continued.
The Taylors were the named insured on the Allstate policy but they no longer held title to the home so they lacked an insurable interest, the judge explained. Conversely, Michael held title but was not a named insured, he emphasized.
Because neither the Taylors nor Michael were named as both insureds and title holders to the insured home, Allstate Insurance Co. does not have to pay anyone for this fire loss, the judge ruled.
Based on the 1995 U.S. Court of Appeals decision in Bonaparte vs. Allstate Insurance Co., 49 Fed.3d 486.
Teed off
William was injured when hit by an errant golf ball at the country club where he is a member. Two or three times each week, William plays a round of golf there.
He observed golf balls hit from the fourth tee often landed on the fifth tee or fifth green. For protection, William would stand beneath a large tree if golfers ahead of him had not yet cleared the fifth tee area. But the tree became diseased and it was removed.
On the day of the accident, William was near the fifth tee when he was hit by a stray golf ball. He sued the country club for compensatory damages based on negligence.
The country club’s lawyer argued William assumed the risk of being hit by a wayward golf ball and the case should be dismissed. But William replied the country club should have either planted trees or erected a screen to protect golfers from injuries.
Should the case be dismissed?
The judge said no.
There is a triable issue, the judge explained-that William is entitled to prove the country club’s design and maintenance of the golf course breached its duty of care owed to golfers such as William.
In some sports activities there is a primary assumption of risk by the participant which creates no duty of the property owner to prevent injury, the judge continued. For example, a ski resort operator has no duty to remove moguls (bumps on a ski run) which could cause injury, he noted.
But a secondary assumption of risk occurs where the property owner owes a duty of care to prevent injury without altering the sport, the judge emphasized. An example is a baseball stadium owner’s duty to erect a screen where patrons can be easily injured by a thrown bat or foul ball, he added.
The facts of this case show the country club probably could have prevented William’s injury after the protective tree was removed by planting trees or erecting a screen to block stray golf balls, the judge concluded.
Based on the 1995 California Court of Appeal decision in Morgan vs. FUJI Country USA, Inc., 40 Cal.Rptr.2d 249.
