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Estate entitled to hearing on cause of fire

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A plaintiff is entitled to a hearing on whether vandalism caused the fire at an unoccupied home, the 7th Circuit Court of Appeals ruled today. The District Court never made a finding on the investigation that indicated it may have been burglars who started the fire.

In the Estate of Wavie Luster v. Allstate Insurance Co., No. 09-2483, Rick Gikas, personal representative of the estate, appealed summary judgment for the insurance company on his breach of insurance contract suit. Allstate insured Wavie Luster's home. The widow was injured in a fall and moved into an extended-care facility in October 2001. Gikas became her power of attorney and told the insurer to bill the premiums to his law office. She never returned the house and died nearly five years later. Three months after her death, a fire caused extensive damage to the unoccupied house. Gikas submitted a claim on behalf of the estate. Allstate then discovered the home had been empty that entire time and denied the claim. Allstate continued to bill Gikas, and Gikas paid claims for two more years after the fire until Allstate cancelled the policy retroactively to November 2001 and returned the premiums paid since then.

Part of the policy says there's no coverage for any loss consisting of or caused by any substantial change or increase in hazard, if it's within the control of the insured; and there's no coverage for loss caused by vandalism if the dwelling is vacant or unoccupied for more than 30 consecutive days immediately prior to the vandalism. The policy also requires an insured to notify the company of any change in occupancy in the dwelling.

The District judge ruled the duty of notification had been breached but based his grant of summary judgment on the increase in hazard portion of the policy by leaving the house unoccupied.

Based on Allstate's policy terms, if a homeowner went on a 31-day trip and a fire occurred during that time, the insured wouldn't be covered. It implies if you are away a lot, your coverage lapses. There is also the chance a homeowner put in special precautions to keep the house safe while away.

"There is no rule that moving out of a house per se increases the hazards against which the insurance company has insured you," wrote Judge Richard Posner.

Gikas is entitled to a remand because it's unknown whether vandalism caused the loss. Allstate is also entitled to a hearing on the applicability of the vandalism exception should the hazard exclusion be found inapplicable.

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  1. The father is a convicted of spousal abuse. 2 restaining orders been put on him, never made any difference the whole time she was there. The time he choked the mother she dropped the baby the police were called. That was the only time he was taken away. The mother was suppose to have been notified when he was released no call was ever made. He made his way back, kicked the door open and terrified the mother. She ran down the hallway and locked herself and the baby in the bathroom called 911. The police came and said there was nothing they could do (the policeman was a old friend from highschool, good ole boy thing).They told her he could burn the place down as long as she wasn't in it.The mother got another resataining order, the judge told her if you were my daughter I would tell you to leave. So she did. He told her "If you ever leave me I will make your life hell, you don't know who your f!@#$%^ with". The fathers other 2 grown children from his 1st exwife havent spoke 1 word to him in almost 15yrs not 1 word.This is what will be a forsure nightmare for this little girl who is in the hands of pillar of the community. Totally corrupt system. Where I come from I would be in jail not only for that but non payment of child support. Unbelievably pitiful...

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