Misunderstanding a Question Won’t Save You If the Question Wasn’t Ambiguous

A recent case out of the Middle District of Georgia, Great Lakes Insurance SE v. Queen, Case No. 3:15-CV-123 (CDL) (behind paywall), serves as an example of a case where the insured claimed the insurance policy at issue was ambiguous and the court disagreed.

In the case, Queen, the insured, owned a home with several outbuildings. While Queen’s home and outbuildings were on an eight-acre parcel of land, Queen answered “no” to the question on the Great Lakes homeowners’ insurance policy that asked if the property to be insured was on more than five acres. When one of Queen’s outbuildings was destroyed in a fire, he sought to recover under the insurance policy. Great Lakes, however, upon learning that Queen’s parcel of land encompassed eight acres, denied coverage, alleging that it would not have issued the policy had Queen not misrepresented the size of the parcel of the land. 

Queen argued that he had not made a misrepresentation on the insurance application. He argued that, while the parcel of land he owned totaled eight acres, it had been divided into four tracts, each of which was less than five acres. Queen’s home and outbuildings were located on a particular “tract” of the larger parcel that was smaller than five acres, and so Queen had answered “no” to the question. 

The court conceded that Queen may have misunderstood the question on the insurance policy, but asserted that the question was nevertheless not ambiguous. The question asked if “the property” to be insured was situated on more than five acres. In this case, Queen provided an address as “the property” to be insured, and the amount of property associated with that address was eight acres, as even Queen conceded. Queen may have subjectively intended only to insure a particular tract of land inside that parcel, and may have had no intention to mislead Great Lakes, but that didn’t change the court’s conclusion that it was unambiguous–and in fact undisputed–that the property to be insured–the address provided to Great Lakes by Queen–was situated on more than five acres.

Queen next tried to argue that his misrepresentation was not material. Great Lakes submitted an affidavit that it would not have insured the property had it known that it was situated on more than five acres. The court questioned the business justification for this, asserting that the affidavit provided no explanation for how Great Lakes’s risk would have increased, given that Queen’s house and outbuildings sat on less than five acres. However, Queen provided no evidence rebutting Great Lakes’s affidavit. Without any contrary evidence, the court had no choice but to accept Great Lakes’s affidavit at face value and conclude that there was no genuine fact dispute on the question of the materiality of Queen’s misrepresentation.

In the end, the court found that Great Lakes was entitled to rescind the insurance policy and granted Great Lakes summary judgment. You get the feeling that the court felt badly for Queen but also felt that it could not reach any other conclusion.