Hunter v. State Farm Fire and Casualty Co.

In 1970, Ida Mae Hunter (Hunter) (plaintiff) bought homeowner’s insurance for her home from State Farm Fire and Casualty Co. (State Farm) (defendant). In 1982, Hunter was hospitalized after a heart attack. While hospitalized, Hunter signed a warranty deed granting her children legal title to the home. Hunter did not return to the home after her discharge from the hospital. Instead, Hunter lived in her daughter’s home briefly and then moved into an apartment. In 1984, Hunter notified State Farm in writing that she had moved into the apartment. While Hunter was living in the apartment, her grandson lived in and maintained the home. Most of Hunter’s personal property was still in the home, and Hunter paid the homeowner’s insurance premiums and taxes on the home. In February 1985, Hunter’s son filed an insurance claim with State Farm for a theft loss from the home. State Farm covered the theft claim. About seven months later, in October 1985, a fire destroyed the home. Hunter filed a claim with State Farm for the fire loss. State Farm declined to cover the loss, contending that Hunter lacked legal title to the home and accordingly lacked an insurance interest in the home. Hunter responded that when she signed the warranty deed while hospitalized, she thought she was retaining a life estate in the home. Hunter stated that she had intended to move back into the home when she was physically able. Hunter claimed that her children held the home in constructive trust for her. Hunter’s children eventually conveyed the home back to her. Hunter sued State Farm for the fire loss and sued other persons regarding related issues. The trial court granted summary judgment for State Farm on the ground that Hunter lacked an insurable interest in the home. Hunter appealed.