A landlord in one recently concluded lawsuit likely thought for some time that he was flat-out having a nightmare.
That individual duly called upon his insurer to defend him in a lawsuit brought by tenants.
What he got instead was this: the insurer's cancellation of his policy based upon its claim that he had both materially misrepresented and concealed important information in his application.
The landlord was certain he had not done that. His response was to file a lawsuit against the insurance company, charging it with breach of contract.
It was shortly after that development that the landlord likely starting reaching for Advil. A trial court ruled against him in the case, finding that, indeed, he had misrepresented and hidden material facts relevant to specific questions in his application.
Understandably, he appealed.
On the second go-round, an appellate panel looked closely at the policy in question and the landlord's alleged wrongdoing in the application answers he submitted, and found marked ambiguity in the queries posed by the insurer.
That proved to be fatal for the insurance company.
Both of the two policy questions that the insurer stated were wrongfully responded to by the landlord when he applied for the policy were ambiguous, noted the court, meaning that they could be interpreted in more than one way.
And, as the court further noted, ambiguities are construed against the policy drafter.
The court's bottom-line reasoning in the case was this: Any insurer seeking to legally rely upon a policyholder's answers to application questions had better ensure that such queries are clearly posed and not susceptible of judicial interpretation at a later date.