The utilities were connected and the house was kept heated. During this time Mr. Skrelja's wife lived at his parents' house (the “Monticello property”), where Mr. Skrelja paid rent, because she was pregnant and did not want to move into the Fantasia property until all renovations were completed. Mr. Skrelja likewise slept at the Monticello property.

Mr. Skrelja did not change his address to the Fantasia property on his driver's license or employer's records, or with his bank, credit card and cell phone providers, or the postal service.

Mr. Skrelja alleged that, on March 16, 2014, the home's water pipes froze and burst.

State Auto denied the claim, asserting that Mr. Skrelja was not living at the house at the time of the loss and, therefore, the house did not meet the definition in the policy of the covered “residence premises.”

Mr. Skrelja sued the insurer, asserting that it had breached the policy.

State Auto moved for summary judgment, arguing that the policy covered only “residence premises” and the house was not “residence premises” at the time of the loss because Mr. Skrelja was not living there.

In response, Mr. Skrelja sought summary judgment on the grounds that he indeed was living in the house at the time of the loss, although for health reasons his pregnant wife had not yet moved in.

The State Auto Policy

The policy covered:

The dwelling on the “residence premises” shown in the Declarations.

It defined:

residence premises

as:

a. The one family dwelling where you reside;

b. The two, three or four family dwelling where you reside in at least one of the family units; or

c. That part of any other building where you reside;

and which is shown as the “residence premises” in the Declarations. “Residence premises” also includes other structures and grounds at that location.

The court granted summary judgment in favor of Mr. Skrelja.

In its decision, the court agreed with State Auto that the policy language was not ambiguous; that Mr. Skrelja was required to reside at the Fantasia property in order for the policy to afford coverage; and that “reside” meant that “he had to occupy the house and live there, be physically present there, and not use the house merely as a place of 'temporary sojourn.'”

It then ruled that State Auto had not shown that Mr. Skrelja was not living there and that he had shown the contrary.

The court pointed out that Mr. Skrelja was physically present at the insured premises on nearly a daily basis, for “eight to ten hours a day,” doing various things including cleaning, painting, meeting with friends and contractors, eating, teleworking, exercising, and showering. According to the court, State Auto did not:

point to any policy language, or to any case law interpreting the terms “dwelling” or “residence premises,” to suggest that [Mr. Skrelja] was required, lest coverage be denied, to live solely at the Fantasia property, or to spend a certain minimum number of hours there on a daily or weekly basis, or to sleep there, or to eat particular meals there, or to have his mail delivered there, or to keep any particular amount of clothing or furniture there.

In the court's view, Mr. Skrelja was living both at the Fantasia property and at the Monticello property at the time of the March 2014 loss, as he was spending his days at the former and eating dinner and sleeping at the latter. It found “no authority” suggesting that Mr. Skrelja could reside/live/dwell at only one house.

Accordingly, the court ruled that State Auto had breached the insurance contract by denying coverage for the March 16, 2014 loss at the Fantasia property. It granted Mr. Skrelja's motion for summary judgment and also awarded him 12 percent penalty interest under Mich. Comp. Laws § 500.2006 for State Auto's failure to timely pay this claim.

The case is Skrelja v. State Automobile Mutual Ins. Co., No. 15-CV-12460 (E.D. Mich. June 20, 2016).