Union Mutual Fire Insurance Company v. Elmer J. and Jacqueline Joerg, 2003 VT 27

Summary

The Supreme Court of Vermont held that tenants were implied coinsureds under their landlord's fire insurance policy because the lease required the landlord to maintain insurance on the premises. The insurer therefore could not pursue subrogation claims against the tenants or a family member residing with them for negligently caused fire damage. The court affirmed dismissal of the action, although it relied on a case-specific lease analysis rather than the trial court's per se rule.

Holdings

1. Where a lease requires the landlord to carry fire insurance on the leased premises, the insurance is for the mutual benefit of the landlord and tenant, the tenant is deemed an implied coinsured under the landlord's policy, and the landlord's insurer may not pursue a subrogation claim against the tenant for covered fire losses.
2. A family member living in the leased premises is included as an implied coinsured for purposes of the landlord's fire insurance, so the landlord's insurer may not pursue subrogation against that resident family member or the member's estate for the fire loss.
3. The court did not decide whether the tenants had a duty to supervise Roy because the tenants were protected from the insurer's subrogation claim as implied coinsureds.

Questions Presented

1. Whether a lease requiring the landlord to maintain fire insurance on the leased premises makes the tenants implied coinsureds protected against subrogation claims by the landlord's insurer.
2. Whether the insurer could pursue a subrogation claim against Francis Roy, a family member living in the leased premises, for allegedly causing the fire.
3. Whether the tenants had a duty to supervise Roy.

Disposition

affirmed