Appeal from the United States District Court for the Northern District of Indiana, Hammond Division. No. 2:07-CV-226-RLM-Robert L. Miller, Jr., Judge.
The opinion of the court was delivered by: Posner, Circuit Judge.
Before POSNER, RIPPLE, and WOOD, Circuit Judges.
This diversity suit for breach of an insurance contract was dismissed on summary judgment. The suit is governed, so far as the substantive issues are concerned, by Indiana law, and the plaintiff's appeal presents issues of both contract interpretation and Indiana insurance law.
Mrs. Luster was a widow living alone in her house in Merrillville, Indiana. She had a homeowner's insurance policy from Allstate. In October 2001, when she was 83, she was injured in a fall and after being released from the hospital moved into an extended-care facility. She executed a power of attorney to her lawyer, Rick Gikas, who is the representative of her estate in this litigation. She never returned home, and died in April 2006, some four and a half years after her fall. Gikas had notified Allstate of his power of attorney and had directed the company to bill the insurance premiums to his law office. No one lived in the house after she left it.
Three months after her death-her house still unoccupied-a fire caused extensive damage. Gikas submitted a claim on behalf of the estate. An investigation indicated that the fire may well have been started by burglars, but the plaintiff denies this and the district judge made no finding.
In the course of the investigation Allstate discovered that the house had been unoccupied for four and a half years before Mrs. Luster's death, and denied the claim, precipitating this suit. Allstate continued billing Gikas for premiums, however, and he continued paying them until October 2008, more than two years after the fire, when Allstate-which claims not to have known that the policy was still in force until its lawyers read the estate's summary-judgment brief that month-purported to cancel the policy retroactively to November 2001, and returned the premiums for the subsequent period to the estate.
The appeal requires us to consider four provisions of the insurance policy:
1. The insured "must . . . inform [Allstate] of any change in title, use or occupancy of the residence premises."
2. "If [the insured] die[s], coverage will continue until the end of the premium period for . . . [the insured's] legal representative while acting as such."
3. There is no coverage for loss to property "consisting of or caused by . . . any substantial change or increase in hazard, if changed or increased by any means within the control or knowledge of an insured person."
4. There is no coverage for loss to property "consisting of or caused by . . . vandalism or malicious mischief if [the insured's] dwelling is vacant or unoccupied for more than 30 consecutive days immediately prior to the vandalism or malicious mischief," unless the dwelling is under construction.
1. Gikas didn't notify Allstate until after the fire that the house was unoccupied. He argues that the notice he gave Allstate, shortly after Mrs. Luster left the house for good-that he had a power of attorney and premiums should be billed to his office-gave the insurance company constructive notice that the house was unoccupied, or at least obligated the company to inquire about its occupancy. That is a frivolous argument. Allstate knew that Luster was 83, so it would come as no surprise to learn that she had executed a power of attorney and that the holder of the power would be handling her finances. That did not indicate that she'd moved out of the house.
Alternatively, Gikas argues that anyway the house was not unoccupied, because right up until her death Luster expressed the intention of returning to live there when her health permitted. "Occupancy" in Indiana law (as in insurance law generally) implies "the presence of human beings as at their customary place of abode, not absolutely and uninterruptedly continuous, but that must be the place of usual return and habitual stoppage," Home Ins. Co. v. Boyd, 49 N.E. 285, 291 (Ind. App. 1898). "A person's dwelling constitutes not the boundaries but the focal point of his life. He does not cease to have a home when he is temporarily absent therefrom, nor does his home cease to be an occupied dwelling. It is not his physical presence but the habitual recurrence of that presence ...