David Thorne v. MemberSelect Insurance Company
882 F.3d 642
7th Cir.2018Background
- Thorne's house in Griffith, Indiana burned down in Feb 2008; he sued Member Select Insurance after it denied coverage, alleging arson by Thorne or his brother.
- Jury awarded Thorne $87,000; Member Select moved under Fed. R. Civ. P. 50 for judgment as a matter of law on residence and damages grounds; district court denied the motion.
- Policy conditions coverage on the house being Thorne’s “residence” and provides settlement “Actual Cash Value” (ACV) without defining the term; policy also separately addresses replacement cost settlement.
- At trial Thorne testified he intended to reside at the property, kept most personal belongings there, received mail there, and had exclusive keys (aside from his brother); he also frequently slept at his workshop and had limited overnight stays in months prior to the fire.
- Damages evidence presented to the jury included prior purchase prices, a $20,000 line of credit secured by the house, mortgage balance evidence, and Thorne’s testimony about the house’s condition and contents.
- District court applied Indiana’s broad evidence rule to interpret ACV and found sufficient evidence for both residence and damages; Seventh Circuit affirms.
Issues
| Issue | Thorne's Argument | Member Select's Argument | Held |
|---|---|---|---|
| Whether the burned property was Thorne’s "residence" under the policy | Property was his residence: he owned it, intended to live there, stored belongings, received mail, had keys | Not resident: slept mostly at workshop, hadn’t stayed there frequently, utilities may have been off | Jury verdict upheld — evidence, when viewed most favorably to Thorne, was sufficient to find residence |
| Meaning of “Actual Cash Value” in the policy | ACV ambiguous; because policy lacks definition, Indiana’s broad evidence rule should apply | ACV means "replacement cost less depreciation" as implied by juxtaposition of ACV and replacement-cost provisions | Court applies Indiana broad evidence rule; ambiguity construed against drafter (Member Select) |
| Sufficiency of evidence to support jury’s damages award | Prior purchase prices, loan amounts, mortgage history, and testimony about contents provided a reasonable basis for ACV under broad evidence rule | Evidence too stale; no expert/lay opinion on value at time of loss; no separate proof of land value | Evidence was sufficient; jury could reasonably infer value of house + contents and offset land value; award not speculative |
Key Cases Cited
- Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc., 831 F.3d 815 (7th Cir.) (standard of review for Rule 50 JMOL)
- Alexander v. Erie Ins. Exch., 982 F.2d 1153 (7th Cir.) (factors for determining "residence")
- Travelers Indem. Co. v. Armstrong, 442 N.E.2d 349 (Ind. 1982) (adopts broad evidence rule as default meaning of "actual cash value")
- Shepard v. State Auto. Mut. Ins. Co., 463 F.3d 742 (7th Cir.) (elements and precision required for damages under Indiana law)
- Trinity Homes, LLC v. Fang, 848 N.E.2d 1065 (Ind.) (ambiguities construed against drafter)