Rental House Fire

Lots of people in Weatherford, Mineral Wells, Aledo, Springtown, Millsap, Brock, Hudson Oaks, Willow Park, Cool, Peaster, Poolville, and other towns in Parker County own rental property. There will be times when that property is vacant. What if a fire occurs when the property is vacant?
The Fort Worth Court of Appeals issued an opinion in 2002, that dealt with the above scenario. The style of the case is, Charles J. Walch v. United Services Automobile Association Property and Casualty Insurance Co. The trial court had granted a summary judgement in favor of United and Walch appealed. There were several issues in this case but the relevant part to this writing, is where the appeals court overruled the trial court as it relates to the question as to whether the property was “vacant” at the time the fire loss occurred.
Here are relevant facts to know. Walch owed a small rental house that was insured by United under a policy of insurance. The tenants of the house moved out on May 15, 1999, and left it in a damaged condition. About ten days later, Walch began renovations. On September 2, 1999, Walch discovered the house had been damaged by fire and in October filed a claim for the fire losses.
The policy with United contained a vacancy clause which read:
17. Vacancy. During the policy term, if an insured building is vacant for more than 60 consecutive days immediately before a loss, we will not be liable for a loss by the perils of fire and lightning or vandalism or malicious mischief. Coverage may be provided by endorsement to this policy.
United contended that as a matter of law, there was no coverage due to the house being vacant more than 60 days before the fire loss.
Walch contended that the interpretation of the vacancy clause was that it should be read to mean entire abandonment, deprived of contents, empty, that is, deprived of contents of substantial utility. United on the other hand urged that vacant meant whether the character of the building’s contents, if any, is such that a person could find it being used as a residence or dwelling.
The insurance policy did not define the term “vacant.”
In examining the law in Texas as it relates to the definition of the term “vacant” in case law, this court looked at other cases and prior holding by the Texas Supreme Court. A 1940, case held the definition of “vacant” in a fire insurance policy to mean “entire abandonment, deprived of contents, empty.” A 1992, Houston Court of Appeals [1st Dist.] case, stated, “The term ‘vacant’ means an entire abandonment, deprived of contents, empty, that is, without contents of substantial utility.” The same Houston court in citing other courts also has said, “The term vacant means ‘entire abandonment, deprived of contents, empty …’ that is, without contents of substantial value.”
United’s argument went more to whether or not the property was unoccupied.
The court in making it ruling in favor of Walch, said that the argument did not turn on whether the contents of the dwelling demonstrated that a person either resided or intended to return and reside in the dwelling, rather, whether the term vacant was satisfied when the term is interpreted by Texas courts to mean, entire abandonment, deprived of contents, empty, that is, without contents of substantial utility.
Fire claims that are denied by the insurance company based on the reason that vacant property is excluded under the policy are exactly the type of cases in which an experienced Insurance Law Attorney needs to be involved. Early involvement is needed to lend greater assurance to a favorable outcome.