Standard Supply Co. v. Reliance Insurance Co.

Facts

Reliance Insurance Company (Defendant) provided a fire insurance policy on a house owned by Standard Supply Co. (Plaintiff). The policy contained an exclusionary provision, which provided that Defendant would not be liable for loss occurring while the house was vacant or unoccupied for more than sixty days. Before issuing a renewal policy to Plaintiff, Defendant hired Tar Heel Reporting Company, Inc. (Tar Heel) to inspect and report on the condition of the house. John Jennings, Tar Heel’s president, completed the inspection and report. At the time of the investigation, the house had been unoccupied for more than a year. There was no electricity or heat source for the house, it was sparsely furnished, and several windows were broken. However, a neighbor told Jennings that people were living at the house. Jennings’s report described the condition of the property and stated that the house was not vacant. Defendant issued the renewal policy to Plaintiff. The house was later destroyed in a fire. Defendant denied Plaintiff’s claim under the policy, based on the exclusionary clause, and Plaintiff sued to collect under the insurance policy. The trial court instructed the jury that Jennings was not an agent of Defendant and that his knowledge about the condition of the property was not imputed to Defendant. The jury found that Defendant was not estopped from denying coverage based on the policy’s exclusionary provision. Plaintiff appealed.