COURT DECISIONS

Rough Notes, Apr 2006

Digested from case reports published in Westlaw, West Publishing Co., St. Paul, MN

Does misrepresentation of residence bar recovery?

David H. Scannell owned a Massachusetts automobile insurance policy with uninsured motorist limits of $250,000 per person and $500,000 per accident. The policy was issued by John Hancock Property and Casualty Insurance Company. It listed Scannell's residence as 540 Hancock Street, Quincy, and the principal place for garaging of the insured vehicle as 210 Pleasant Street, Weymouth. The Pleasant Street residence was owned by Scannell and his wife, Barbara.

On June 25, 1996, while riding his bicycle, Scannell's son, David C., was severely injured when he was struck by an uninsured motorist. At the time of the accident, David C. was living with his mother at the Pleasant Street residence. David H. sought and received personal injury protection and medical payment benefits under the John Hancock policy. The insurer paid the policy limits. Scannell then sought uninsured motorist benefits.

Under the policy, if David H. Scannell lived at 210 Pleasant Street, then David C. was a "household member" within the meaning of the policy. John Hancock investigated David H. Scannell's claim and discovered that he no longer lived at 210 Pleasant Street, and that he no longer garaged the insured automobile at that address. As a result of this investigation, John Hancock filed a claim seeking repayment of the benefits already paid to Scannell. The claim alleged that Scannell fraudulently misrepresented where he lived and where his vehicle was garaged, and that he breached his contract by refusing to cooperate with the insurer's investigation. Scannell counterclaimed that the insurer's investigation had violated a Massachusetts statutory provision, G.L. c. 93A.

The jury awarded damages to John Hancock in the amount of the personal injury protection and medical payment benefits already paid to Scannell. The jury also found that the insurer's investigation violated G.L. c. 93A. Nevertheless, on John Hancock's motion, the judge entered judgment in favor of the insurer. Scannell appealed.

On appeal, Scannell argued that John Hancock owed him uninsured motorist benefits because he had two residences, including the 210 Pleasant Street, Weymouth, home. He also claimed damages for John Hancock's violation of G.L. c. 93A.

The Appeals Court of Massachusetts acknowledged there are circumstances in which it is possible to have a residence in more than one place at the same time. However, the court found that Scannell's circumstances did not support such a finding. On the policy application, Scannell listed his residence as 540 Hancock Street, Quincy. At no time did he inform John Hancock of a change of residence. Scannell argued he had retained the Quincy apartment, and later an apartment in Charlestown, as temporary residences while receiving cancer treatment. However, information in Scannell's medical records revealed that he was no longer living at 210 Pleasant Street. In addition, Scannell did not contribute financially to the 210 Pleasant Street residence, did not vote in Weymouth, and did not garage the automobile in Weymouth. The court concluded that Scannell, having established a residence elsewhere, was no longer responsible for the home and family, and that David C. was not a "household member" under the policy. Accordingly, John Hancock did not owe Scannell benefits for David C. In light of these findings, the court also found that John Hancock did not violate G.L. c. 93A.

The judgment of the lower court was affirmed.

John Hancock Property and Casualty Insurance Company vs. Scannell-No. 04-P-0499-Appeals Court of Massachusetts-September 16, 2005-834 North Eastern Reporter 2d 305.

Auto insurer disputes "dead storage" claim

In February 2002, Josh Rogers purchased a 1978 Chevy Sierra pickup truck. He secured a temporary license plate and automobile insurance coverage for the vehicle. Soon after the purchase, the electric choke stopped working, but the truck was still operable. Josh continued to drive it until March, when the transmission failed. At this point, Josh cancelled his insurance coverage. His plan was to buy a new transmission and repair the truck himself with the help of a friend, John Burns.

Josh lived with his mother and stepfather, Betty and David Rogers. He parked the truck behind their residence, then later moved it to their barn. In order to move it, he had to start the truck so that he could use the power steering and brakes.

In April, Josh and John were working on the truck. Josh poured some gasoline into the carburetor to prime it. When the truck didn't start, John poured more gasoline into the carburetor and Josh again attempted to start the truck. At this point, flames ignited and John was severely burned.

The Rogers owned a Deluxe Mobilehome Policy issued by Allstate Insurance Company. The Burns were insured under an uninsured motorist policy issued by American Family Insurance Company. The Burns filed a complaint against Josh, Allstate and American Family, seeking damages for John's injuries. Allstate denied coverage, claiming that the truck fell under the motor vehicle exclusion set forth in the policy. The Burns and American Family argued that Josh's truck fell within an exception to the motor vehicle exclusion because the vehicle had been placed in "dead storage." The trial court found that Allstate had a duty to defend and indemnify Josh Rogers. Allstate appealed.