(Jose Carlos Fajardo / San Jose Mercury News, Associated Press)
In Jackquart v. State Auto Prop. & Cas. Ins. Co., No. 19-cv-2480-WJM-KMT, 2020 WL 7055500 (D. Colo. December 2, 2020), the Court was faced with a claim of losses from a wildfire.
The losses came from the destruction of a structure away from the "residence premises" identified in the homeowner's policy at issue. In fact, the evidence reflected that the uses made by the policyholders of this structure -- which was located 119 miles away from their covered home -- were not consistent with the use of a covered structure away from the residence premises "in connection with the residence premises," in pertinent part:
Apart from Plaintiffs’ ownership of both properties, Plaintiffs have not established that there is a credible link, relationship, or association between the Primary Residence and the La Veta Property. In addition to being located 119 miles away from the Primary Residence (see ECF No. 46-3), Plaintiffs’ use and enjoyment of the La Veta Property as a getaway was distinct from their use of the Primary Residence.
Jackquart, 2020 WL 7055500, at *5.
Further, Mr. Jackquart testified that the structure was "investment property that the Plaintiffs planned to sell at the time of the fire." Even further still, at the time of the fire they had a contract to sell it. Jackquart, 2020 WL 7055500, at *6.
On this record, the Court granted the homeowners carrier's motion for summary judgment that there was no insurance coverage under the policy at issue and so there was no breach of contract when the carrier denied coverage. Since there was no insurance coverage, it followed under Colorado law as under the law of the vast majority of jurisdictions in the United States, that there was no bad faith. Accordingly, the Court also granted the carrier's motion for summary judgment on the bad faith claim in that case.
The holdings of Courts across the United States that where there is no insurance coverage, there is no bad faith, are addressed in 1 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 3:28 (third-party cases) (Thomson Reuters West 3d ed. & 2020 Supps); and in id., Volume 2, §§ 9:1 & 9:14 (first-party cases).
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