Federal District of Oregon Restricts an Insurer’s Assertion of a “Vacancy” Coverage Exclusion as a Matter of Oregon Law

On June 1, 2021, Judge Acosta of the District of Oregon issued a Findings and Recommendation in Davison v. Foremost Insurance Company, 20-cv-1387.  In Davison, the plaintiffs purchased an all-risk home-insurance policy to cover damage to a residential property they had inherited.  The policy contained a coverage exclusion for damage to the property caused while “the dwelling has been vacant for more than 30 consecutive days immediately before the loss.”  The policy defined “vacant” to mean “[t]he absence of most of. . . [t]he furniture. . . [and] [o]ther items needed for human occupancy as a dwelling.”  The property was subsequently damaged by fire while the plaintiffs were not using the property as a residence but rather were conducting renovations there, exclusively on weekends.  The defendant insurer denied coverage on grounds of the vacancy exclusion.

The plaintiffs moved for partial summary judgment as to the issue of the insured’s liability, only.  Judge Acosta found that, although the plaintiffs were concededly not using the property as a dwelling during the thirty days preceding the fire, the vacancy exclusion was inapplicable as a matter of Oregon law due to the continuous presence at the property of at least some furniture and household items, including chairs, tables, appliances, and food.  On that basis, Judge Acosta recommended that the court grant partial summary judgment in the plaintiffs’ favor as to the insured’s liability for breach of its indemnification obligations under the policy.

On June 23, 2021, Judge Mosman adopted Judge Acosta’s Findings and Recommendation as his own opinion, without modification.