Standard Supply Co. v. Reliance Insurance Co.

Reliance Insurance Company (Reliance) (defendant) provided a fire insurance policy on a house owned by Standard Supply Co. (Standard) (plaintiff). The policy contained an exclusionary provision, which provided that Reliance would not be liable for loss occurring while the house was vacant or unoccupied for more than 60 days. Before issuing a renewal policy to Standard, Reliance hired Tar Heel Reporting Company, Inc. (Tar Heel) to inspect and report on the condition of the house. The inspection and report was completed by Tar Heel’s president, John Jennings. At the time of the investigation, the house had been unoccupied for more than a year. There was no electricity of heat source for the house, it was sparsely furnished, and several windows were broken. However, a neighbor told Jennings that people were living at the house. Jennings’s report described the condition of the property and stated that the house was not vacant. Reliance issued the renewal policy to Standard. The house was later destroyed in a fire. Reliance denied Standard’s claim under the policy, based on the exclusionary clause, and Standard brought suit to collect under the insurance policy. The trial court instructed the jury that Jennings was not an agent of Reliance and that his knowledge about the condition of the property was not imputed to Reliance. The jury found that Reliance was not estopped from denying coverage based on the policy’s exclusionary provision. Standard appealed.