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Bosecker v. Westfield Ins. Co.

Supreme Court of Indiana

February 23, 2000, Decided

Cause No. 82S04-9902-CV-148



BOEHM, Justice.

This case turns on whether the builder's risk policy involved here, acquired for the specific purpose of repair and renovation of an existing building, covers the building before any work has started. We hold that the language in this policy is ambiguous and therefore must be construed in favor of the insured to provide coverage starting from its effective date.

In the mid-1980s, William and Diane Bosecker purchased a piece of real estate in Evansville containing a four-unit apartment building and another small structure. In June of 1995, they sold the property to Jason Bartley under a conditional sales contract, but on February 22, 1996, Bartley returned the [**2]  property to the Boseckers after he was unable to make the payments.

Diane immediately contacted her insurance agency, Heston Insurance Agency, told Diane Terrell, an agent for Heston, that the property was vacant and had water problems, and inquired about obtaining insurance on the property. 1 Terrell first agreed to bind the property under what was variously described as a "standard apartment house" or "landlord's" policy [*243]  from Westfield Insurance Company, the Boseckers' insurer at the time, but then concluded that she would need additional information. William called Terrell the next day, February 23, and gave her the size and age of the buildings and reported that he had received notices from the City of Evansville Code Enforcement Division requiring that the buildings be vacated and repairs made under threat of razing the buildings. Based on this information, Terrell and the president of Heston decided that the property would not be eligible for the standard apartment building policy, and instead added it as an endorsement to an existing builder's risk policy from Westfield that insured other properties of the Boseckers.

 [**3]  The policy contained two apparently inconsistent provisions defining the covered risks. Section A(1)(a) defined "Covered Property" as "buildings or structures including foundations while in the course of construction, installation, reconstruction, or repair." Section A(2)(b) of the policy described "Property Not Covered" as "existing buildings or structures to which improvements, alterations, repairs, or additions are being made." On the face of these two provisions, a structure is both covered and not covered if it is under repair.

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724 N.E.2d 241 *; 2000 Ind. LEXIS 150 **

WILLIAM L. BOSECKER and, DIANE BOSECKER, Individually, Appellants (Plaintiffs Below), v. WESTFIELD INSURANCE COMPANY and SAM T. HESTON & SONS, INC., d/b/a HESTON INSURANCE AGENCY, Appellees (Defendants Below).

Prior History:  [**1]  APPEAL FROM THE VANDERBURGH SUPERIOR COURT. The Honorable J. Douglas Knight, Judge. Indiana Court of Appeals Cause No. 82A04-9711-CV-500. Cause No. 82D03-9607-CP-1848.

Disposition: Reversed and Remanded.


repair, insurer, coverage, summary judgment, reconstruction, ambiguous, started, insurance policy, apartment building

Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, General Overview, Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Question of Law, Ambiguous Terms, Construction Against Insurers, Reasonable Expectations, Reasonable Person, Contracts Law, Defenses, Ambiguities & Mistakes, Coverage Favored