Insurer Must Defend Site Owner Against Fire-Related Lawsuit

Facts: Before a resident moved into her unit, a new smoke detector with a new battery was installed. The unit was also inspected by a local PHA inspector who found that the unit had the correct number of smoke detectors and that the smoke detectors were working properly. Shortly after the resident moved in, she complained that her smoke detector was constantly sounding and asked the owner how to turn it off. The resident testified that she removed the smoke detector from the wall and put it in the hall closet, but she didn’t remove the battery.  

A fire broke out in the unit and a child died as a result. According to a police report, the fire started in the children’s bedroom where the resident had placed a lit candle. The police report also noted that, after the fire, an inspection found an “empty smoke detector mount . . . Several feet away the disconnected smoke detector was noted in the open hall closet.” The fire rescue report indicated that the smoke detector didn’t activate at the time of the fire.

The resident sued the owner for negligence, and the owner’s insurer asked the court to rule that it’s entitled to deny coverage for any and all claims resulting from the fire loss. According to the insurance policy, the owner represented and warranted that there were operable smoke detectors in each unit, office, utility/laundry room, and storage area. The insurer claimed the owner breached the policy because based on the fire rescue report the smoke detector failed to activate at the time of the fire.

The owner responded that there’s no evidence that there was no “operable” smoke detector in the unit at the time of the fire.

Ruling: A Florida district court ordered the insurer to honor the terms of the policy and to defend and indemnify the owner in the lawsuit.

Reasoning: The fire rescue report didn’t state that the smoke detector wasn’t operable, and the fire inspector testified that she didn’t actually know if the smoke detector activated at the time of the fire because she didn’t speak with any of the occupants about the smoke detector. The inspector knew only that the smoke detector wasn’t sounding at the time she entered the unit. She also testified that she didn’t check the smoke detector to see if there was a battery in it or if it was operational.

Further, the resident, who had a duty under the smoke detector lease addendum to report any problems to management, never reported that the smoke detector wasn’t working. While she reported the beeping, she was given instructions on how to stop it. Thus, there’s no evidence that that the smoke detector wasn’t operable, or operating, at the time of the fire. Although the smoke detector had been removed from the wall, it had a battery backup that would have allowed it to operate despite being removed from the wall. There’s evidence that a new battery was put in the smoke detector about a month before the fire and no evidence that the battery stopped working or was removed from the smoke detector. Consequently, the insurer didn’t establish that the owner breached the warranty section of the policy by having an inoperable smoke detector in the unit.

• GuideOne Nat’l Ins. Co. v. Palm NMB, LLC, October 2019