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A federal district court in Pennsylvania has dismissed a complaint homeowners filed against their insurance company seeking payment of damage caused by a fire at the home they were renovating where they did not assert that they were residing there.

The Case

After their home was destroyed by fire, Nanette and Justin Bloxham reported the loss to their insurance carrier, Allstate Insurance Co.

Allstate denied payment on the basis that the Bloxhams did not reside at the property.

The Bloxhams sued for breach of contract, and Allstate moved to dismiss. It argued that the policy required that either or both of the Bloxhams had to reside at the property to obtain coverage. Because they did not allege that they resided at the property, but only that they “occupied” the property at the time of the loss as a result of “ongoing and continuous repairs and renovations to the dwelling,” Allstate maintained that the Bloxhams failed to state a breach of contract claim.

The Allstate Insurance Policy

The Allstate insurance policy defined the insured dwelling as: “a one, two, three, or four family building structure identified as the insured property on the policy declarations, where you reside and which is principally used as a private residence.”

The District Court's Decision

The court granted Allstate's motion.

In its decision, the court explained that the policy “clearly” made coverage conditional on at least one of the Bloxhams residing at the insured home.

The court then ruled that because the Bloxhams alleged only that “ongoing and continuous repairs” were taking place at the property and not that they resided there, they failed to plead that Allstate had breached a contractual duty when it denied their insurance claim for fire damage.

It stated that the Bloxhams' intention to return to the home at a future date after the fire loss did not establish their “residence” there.

The court concluded by giving the Bloxhams leave to file an amended complaint alleging sufficient facts to show that Allstate had breached the insurance agreement by denying coverage.

The case is Bloxham v. Allstate Insurance.

Attorneys involved include Thomas W. Munley of Minora, Minora, Colbassani, Krowiak & Mattioli in Scranton for the plaintiffs; for Allstate Insurance, Bonnie S. Stein of Curtin & Heefner in Morrisville.

Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. Meyerowitz is the director of the Insurance Coverage Law Center and editor-in-chief of journals on insurance law, banking law, bankruptcy law, energy law, government contracting law, and privacy and cybersecurity law, among other subjects. He can be contacted at [email protected].