Wells Fargo Bank, N.A. v. Allstate Ins. Co.
290 F. Supp. 3d 715
N.D. Ohio2017Background
- Wells Fargo, as mortgagee-insured under an Allstate homeowners policy, filed a claim after a February 6, 2014 fire that damaged a vacant dwelling in Poland, Ohio.
- The Policy was in force at the time; the homeowner had defaulted and the property had been vacant more than 30 consecutive days before the loss.
- Allstate denied the claim invoking the policy vacancy exclusion that precludes coverage for "vandalism or malicious mischief" when the dwelling has been vacant >30 days.
- Wells Fargo sued for breach of contract and related relief and moved for summary judgment on whether the vacancy exclusion for "vandalism and malicious mischief" excludes losses caused by arson.
- The Ohio Supreme Court declined a certified question; the district court then decided cross-motions for summary judgment.
- The Policy (Coverage C) lists "fire" and "vandalism and malicious mischief" as separate covered perils and also contains an "arson reward" provision that refers to "arson" in connection with a "fire loss."
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a vacancy exclusion for "vandalism or malicious mischief" excludes arson losses to a vacant dwelling | Wells Fargo: policy language and structure treat fire/arson as distinct from vandalism; arson is a subset of "fire," so the vacancy exclusion for vandalism does not bar coverage for arson | Allstate: plain-meaning/dictionary definitions show arson is a form of vandalism or malicious mischief, so the exclusion applies | Court: Arson is a fire loss under this Policy and not excluded by the vacancy provision for "vandalism or malicious mischief"; grant summary judgment to Wells Fargo |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting principles)
- Scott v. Harris, 550 U.S. 372 (genuine-issue/summary-judgment standards)
- Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216 (ambiguities in insurance policies construed against insurer)
- Laboy v. Grange Indem. Ins. Co., 144 Ohio St.3d 234 (same-term rule: identical contract terms given same meaning throughout)
- Penn. Traffic Co. v. AIU Ins. Co., 99 Ohio St.3d 227 (undefined policy terms get plain and ordinary meaning)