• Attorney Margaret Miglietta of Cummins & White, LLP successfully prosecuted a claim for breach of fiduciary duty on behalf of its client against its long time insurance broker.
  • The Court of Appeal reversed the trial court’s ruling in favor of coverage, finding the vacancy provision in a property policy applied to the 60 days before a water loss even though the insured did not own the property for the entirety of that time.
  • The Court of Appeal reversed the trial court’s finding that the residence was not vacant within the meaning of the policy although it was completely devoid of all furnishings because it was being held out for sale.
  • The Court of Appeal affirmed that loan receipt agreements are appropriate and enforceable contracts that allow insurers to come to the aid of their insureds while preserving their coverage defenses and providing a basis to obtain recovery against a liable third party.

Case Study

Margaret Miglietta of Cummins & White LLP successfully obtained affirmation by the California Court of Appeals of a ruling in favor of a Church against its insurance broker, and clarifying the law on two key points of long standing interest and practice: the vacancy provision in property policies and the usage of loan receipts.

A house purchased by the Church to be used as the Western Hemisphere residence of the Coptic Pope, sustained a water loss in July of 2015.  At the time of the loss, the residence was completely devoid of any furnishings. The house had been vacant at the time of the appraisal in April 2015 and when escrow closed approximately 57 days before the water loss. The insurance company denied the claim pursuant to its policy’s 60-day vacancy provision. After the Church made repeated pleas for assistance, the insurance company agreed to pay for the Church’s water loss repairs by way of a loan in exchange for the Church’s agreement to allow the insurance company to bring suit against the Church’s insurance broker in the Church’s name and to repay the loan out of any recovery obtained from the broker.


The trial court found the broker breached its duty of care when it took it upon itself to fill out the insurance application and requested insurance coverage for the Papal Residence under a commercial policy of insurance. The trial court also found the loan receipt agreement was a legitimate manner for an insurance company to assist its insured while preserving its right to contest coverage and pursue recovery for an uncovered loss against a third party. The trial court further found however, that the Church suffered no damages because coverage was afforded under its policy. The trial court found the house was not vacant because it had been up for sale and even if it was vacant, the vacancy provision did not apply to a time frame before the insured owned the property.

Court of Appeals Reversal and Affirmation

The appellate court reversed the trial court’s judgment finding the vacancy provision was clear and unambiguous, and applied to a time frame 60 days before a loss without regard to the insured’s ownership of the property. The court affirmed the loan receipt agreement as a proper and enforceable contract.