Another section of the policy directed that all residents of the household be listed, including unrelated individuals. Lee's name, followed by the abbreviation “IN,” along with Constable and his two children, followed by the abbreviation “OR,” meaning “other,” were typed into a column titled “Rel. to Ins.”

The properly subsequently was destroyed by an accidental fire in which Constable died and one of his daughters suffered serious injuries. The insurer that had issued a policy on the home, Mercury Insurance Company of Georgia, denied Lee's claim.

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Lee sued Mercury, which moved for summary judgment based on the alleged misrepresentation in the policy application that the Riverdale house was Lee's primary residence and Lee's failure to reside at the Riverdale house as required by policy.

Lee also moved for summary judgment.

The trial court granted Mercury's motion and denied Lee's motion. He appealed, contending that the policy expressly covered the loss of the Riverdale house due to fire and that this home qualified for coverage under the policy.

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Generally, the insured must be a full-time resident of the home to have homeowners' coverage. (Photo: Shutterstock)

The Mercury policy

The Mercury policy provided that it would cover

the dwelling on the residence premises shown in the Declarations used principally as a private residence, including structures attached to the dwelling; materials and supplies located on the residence premises used to construct, alter or repair the dwelling or structures on the residence premises….[Emphasis in original.]

The policy also defined residence premises as the “one, two, three or four family dwelling, condominium or rental unit, other than structures and grounds, used principally as a private residence; where you reside and which is shown in the Declarations. [Emphasis in original.]

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The Georgia Appellate Court's decision

The Georgia appellate court reversed the trial court's grant of summary judgment in favor of Mercury, as well as its denial of Lee's motion for summary judgment in his favor, on the issue of coverage under the policy.

In its decision, the appellate court observed that punctuation was “an important indicator of meaning.” A semicolon, the appellate court continued, normally was employed “in marking off a series of sentences or clauses of coordinate value.” A semicolon separated “separate consecutive phrases or clauses” that were “independent of each other grammatically, but dependent alike on some word preceding or following.”

Here, the appellate court said, the definition of “residence premises” “could be read by a layperson as having two separate, consecutive clauses (definitions) dependent alike upon the preceding word 'means.'”

It reasoned that, based on “the placement of the semicolon” in the definition of “residence premises,” a layperson could reasonably understand the defined term to mean “the one, two, three or four family dwelling condominium or rental unit, other than structures and grounds, used principally as a private residence” or “where you reside and which is shown in the Declarations.”

The appellate court concluded by rejecting the argument that it should “read the semicolon out of the policy” based on what it characterized as an “anachronistic view of punctuation” reflected in a 1924 decision, Bridges v. Home Guano Co., “tell[ing] us, what is common knowledge, that there is still much uncertainty and arbitrariness in punctuation.”

The case is Lee v. Mercury Ins. Co.

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FC&S Legal comment

Other appellate decisions in Georgia have reached similar conclusions.

For example, in Hill v. Nationwide Mut. Fire Ins. Co., the appellate court concluded that the policy provided alternative definitions of “residence premises” based on the use of a semicolon followed by the word “or.”

Thirty-five years ago, another Georgia appellate court found ambiguity in an insurance policy over a comma. In Georgia Intl. Life Ins. Co. v. Bear's Den, the appellate court addressed ambiguity in an insurance policy caused by the lack of an “and” or an “or” after a comma in policy language defining when the policy became effective. In that case, the insurer asserted that the connective “and” should be inserted after a comma to create three conditions for the policy to become effective, while the insured asserted that the comma separating the first two conditions from the third should be construed as the disjunctive “or.” The appellate court held:

Because neither an “and” nor an “or” appears in the provision in question in the instant case, it is not possible to determine from the provision itself whether the conditions to enforceability stated therein are disjunctive or conjunctive. Either construction would be viable. Thus, the provision in the instant case, containing neither a conjunctive nor a disjunctive connective, is inherently ambiguous.

Moral of the story? Grammar and punctuation do matter, especially in insurance policies and other contracts!

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Steven A. Meyerowitz, Esq., is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications Inc. Email him at [email protected].