Farm Bureau Mutual Insurance Co. of Arkansas v. Future Davenport
2017 Ark. App. 207
| Ark. Ct. App. | 2017Background
- Plaintiff Future Davenport owned a residence in Palestine, Arkansas insured by Farm Bureau for fire, vandalism, and malicious mischief; policy limits were $82,000 (dwelling) and $40,000 (contents).
- In September 2010, while Davenport was in Michigan, vandals broke into the Hudspeth house, stole items, and set the house on fire; Farm Bureau paid nothing and denied coverage.
- The policy contained a "Vacancy or Unoccupancy" provision (captioned as a condition) excluding coverage if the dwelling was vacated or unoccupied for 60 consecutive days; the policy also defined “unoccupied.”
- Farm Bureau asserted the house was unoccupied for 60 days and thus excluded; Davenport sued for policy benefits, attorney’s fees, and a statutory penalty; Farm Bureau admitted issuance and the fire but raised noncoverage as an affirmative defense.
- At trial the jury returned a unanimous verdict for Davenport; the circuit court denied Farm Bureau’s directed verdict and JNOV motions and excluded certain proffered jury instructions from Farm Bureau. Farm Bureau appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the unoccupancy provision is a condition precedent (placing burden on insured) or an exclusion (burden on insurer) | Davenport: provision is an exclusion; insurer bears burden to prove the excepted risk | Farm Bureau: provision is a condition precedent; Davenport must prove coverage (i.e., not unoccupied) | Court: language operates as an exclusion despite caption; insurer bears burden to prove unoccupancy |
| Whether evidence required directed verdict for Farm Bureau that the house was unoccupied for 60 days | Davenport: factual dispute existed (furnishings, utilities, food, and son’s occasional stays) so jury question | Farm Bureau: undisputed proof showed >60 days unoccupied (son’s two stays insufficient) | Court: denial of directed verdict affirmed; occupancy was a factual question for jury |
| Whether denial of JNOV was erroneous given the record | Davenport: substantial evidence supported verdict; court should view evidence in favor of nonmovant | Farm Bureau: same arguments as directed verdict—insufficient evidence for coverage | Court: substantial evidence supported jury verdict; JNOV denial affirmed |
| Whether trial court erred in rejecting Farm Bureau’s proffered jury instructions (D-1, D-2, D-3) | Davenport: insurer bore burden on exclusion; AMI instruction on common meaning adequate; no prejudice | Farm Bureau: entitled to instruction placing burden on plaintiff and defining “inhabit/inhabitant” | Court: refusal proper — D-1 misstated burden of proof; D-2/D-3 refusal not prejudicial (definitions read at trial and common-meaning instruction given) |
Key Cases Cited
- Ark. Farm Bureau Ins. Fed’n v. Ryman, 309 Ark. 283 (court must construe ambiguous policy language in favor of insured)
- Willis v. Denson, 228 Ark. 145 (insurer bears burden to prove loss falls within an excepted risk such as vacancy/nonoccupancy)
- Hill v. Farmers Union Mut. Ins. Co., 15 Ark. App. 222 (definition of condition precedent and pleading requirement)
- Farmers Fire Ins. v. Farris, 224 Ark. 736 ("unoccupied" is a question of law for meaning and question of fact for application)
- Nat’l Sec. Fire & Cas. Co. v. Williams, 16 Ark. App. 182 (place of habitation is ‘unoccupied’ when no one is living there; vacancy/unoccupancy generally a jury question)