Homeowners Insurance Claim – 2

This is a 2022, homeowners claim from the Eastern District of Texas, Tyler Division.  The opinion is styled, Meridian Security Insurance Company v. Curtis Murphy.

In this case, Meridian seeks a declaratory judgment that it is not liable for damage caused by by a fire at Murphy’s home.  Murphy asserted counter claims.  Meridian now moves for summary judgment.

Murphy’s counter claims were dismissed by the Court.

Meridian issued Homeowners Policy No. 1000677728 (the Policy) listing Murphy as the named insured.  The Policy covered the “dwelling on the ‘residence premises’ shown in the Declarations.  The Policy defined “residence premises” as “the onefamily dwelling where you reside . . . on the inception date of the policy period shown in the Declarations and which is
shown as the ‘residence premises’ in the Declarations.”  The Declarations in turn identified the “residence premises” as the dwelling and structures at 401 Davis St., Longview, Texas, 75602 (the “Property”).  The policy period was November 26, 2019, to November 26, 2020.

On January 23, 2020, a fire severely damaged the Property, resulting in a total loss.  The Longview Fire Marshal listed the cause of the fire as undetermined.

Murphy reported the claim four days after the fire.  Following an investigation, Meridian denied the claim in March 2021 on three grounds.  First, Meridian contended that Murphy did not “reside” at the Property on the Policy’s inception date.  Second, Meridian claimed that Murphy failed to properly substantiate his interest in the Property at the time of the fire.  Third, Meridian asserted that Murphy failed to adequately cooperate with its investigation, which “has been prejudicial to Meridian.”

As to the second claim – Meridian next argues that it owes no liability because “Murphy’s interest in the dwelling and personal property has not been substantiated.”  Meridian complains that Murphy has presented only “a quitclaim deed” to the Property, and that this does not “of itself establish any title in those holding under it.”  Meridian also contends that Murphy has presented no evidence to show ownership of personal property destroyed in the fire.  But, as Murphy says, the quitclaim deed conveyed title because the grantor of the quitclaim deed possessed title.  And Murphy has presented some evidence of personal property ownership.

Under Texas law, an insured party must have an insurable interest in the property to recover.  Further, the Policy here limits Meridian’s liability to the amount of such ‘insured’s’ interest at the time of loss.”  A claimant has the burden to prove an insurable interest.

To prove an insurable interest in the home on the Property, Murphy relies on his quitclaim deed, which he recorded with the Gregg County Clerk on October 24, 2019.   Although a quitclaim deed alone does not establish title, Meridian does not dispute that a quitclaim deed can under some circumstances demonstrate title in the holderwhere title in the grantor is shown.”  And, here, Murphy demonstrated title in the grantor.  Murphy submitted the Gregg County Appraisal District’s deed history for the Property, which shows that (1) Murphy received a quitclaim deed from a real estate company, “Investments and Real Estate LLC,” which in turn (2) received a quitclaim deed from Michael McElroy, who (3) earlier received a warranty deed from Navy Federal Credit Union.  Because a warranty deed conveys title, McElroy conveyed title to the real estate company, which in turn conveyed title to Murphy. By submitting evidence that he holds title, Murphy has at a minimum created a genuine issue of material fact regarding his insurable interest in the dwelling on the Property.

Murphy has also presented some evidence of an interest in the personal property destroyed in the fire.  Murphy’s sworn proof of loss, for example, identifies twentyone items lost in the fire and their estimated values.  He further directs the Court to his EUO, in which he discussed several items in the home and provided their estimated values.  In his deposition, moreover, Murphy discussed the clothes that he had brought to the Property that were lost.  Conflicting evidence on insurable interests may raise questions of fact precluding summary judgment.

Accordingly, the Court denies Meridian’s motion for summary judgment on
this ground.

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