Invasion of Right of Occupancy
Constructive eviction of a tenant was found to fall within the “invasion of right of private occupancy” “personal injury” coverage. The policy defined “personal injury” to include the “wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies . . . .”
The occupant was Chanda Enterprises, Inc., which appears to have been a dba for a tenant operating in a shopping center. The dispute arose when the name “Pertucci’s Dairy Barn,” an ice cream store in a shopping center, was changed to “Planet Ice Cream.” Chanda complained that it was disfavored as a franchisee in favor of a Dairy Queen. The court concluded:
[W]e conclude that since the Chanda action involved allegations that appellants, either individually, or through their agent, had constructively evicted a tenant, such conduct was potentially covered under the CGL policies issued by Harleysville . . . .
Id. at *5.
Neither the trial nor appellate court focused on whether the tenant needed to be an individual in order to qualify as a person, the issue deemed pertinent in the next case discussed.
47 Mamaroneck Ave. Corp. v. Hartford Fire Ins. Co., ___ N.Y.S.2d ___, 2008 WL 1823487 (N.Y. App. Div. (2d Dist.) 2008) (Lifson, Florio, Angiolillo, Chambers)
The court found that no coverage arose since the insured was not a natural person. This result arose because the term “person” is not defined in the policy, but the definition of “personal and advertising injury” distinguishes between a “person” and an “organization.” Defamation of a “person or organization” is included in the definition, while the wrongful eviction and wrongful entry is limited to “the right of private occupancy of a room, dwelling or premises that a person occupies.” Id. at *1.
Critically, the court also found that the insurer was not precluded from denying a defense by its failure to issue a disclaimer since such a requirement only arose in claims arising from “death or bodily injury.” See Matter of Worscester Ins. Co. v. Bettenhauser, 95 N.Y.2d 185, 188.
Notably, a person is defined as a corporation under most statutory code provisions, and while the term “person” as individual makes sense for a room or dwelling, it is less clear that that would apply to premises. Nor is there anything about the scope of coverage for “personal injury” that would make it inappropriate in a commercial context.
The Pennsylvania court appears to have taken a more common sense approach to this issue by not addressing the “person” argument, whereas the New York court has taken the narrowest possible construction of the term and adopted it. Moreover, the insurer had a different choice should it have wished “person” to mean an individual as an earlier policy issued by Hartford so provided.
