If the insured misrepresents that it owns the insured property, can the insurer void the policy? In Grenoble House Hotel v. Hanover Ins. Co., 2010 U.S. Dist. LEXIS 75355 (E.D. La. July 26, 2010), the court denied the insurer's motion for summary judgment seeking to void the policy on misrepresentation grounds.
Hanover issued to the insured a commercial policy covering damage to the hotel building, contents and business interruption. After its property was damaged by Hurricane Katrina, the insured claimed for damage to the building and its contents, and for business interruption. Hanover eventually tendered policy limits for contents and business interruption.
When policy limits were not paid for damage to the building, the insured sued. Hanover moved for summary judgment, seeking to dismiss all of the claims because the insured represented itself to be the owner of the property when it fact it was the lessor, constituting a material misrepresentation.
The policy stated it was void if any insured intentionally concealed or misrepresented a material fact concerning its interest in the covered property. Under Louisiana law, a misrepresentation made in the negotiation of an insurance contract by the insured was not deemed material unless the misrepresentation was made with intent to deceive.
Here, Hanover offered no evidence establishing that the insured represented that it was the owner of the property. Although the "owner" box was checked on the policy application, there was no indication that a representative of the insured signed the application or provided information that it was the owner of the property. Absent such evidence, Hanover failed to establish that the insured made a statement that was false.
Further, Hanover failed to provide any evidence establishing that a misstatement regarding ownership of the property would be material. There was no evidence to establish that had Hanover known the insured was the lessor, as opposed to the owner of the building, it would have either declined to write the policy or would have issued the policy only upon the payment of a higher premium. Accordingly, the motion for summary judgment was denied.
