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Alan & Valerie Fenderson v. Hingham Mutual Fire Insurance
Docket No. INS-06-2117, Decision Issued November 16, 2006.
The insureds requested a hearing following receipt of a notice of
homeowners insurance cancellation citing an increase in hazard and the
involvement of insureds’ dogs in an incident. At hearing, the
company presented several witnesses and argued that the insureds’
dogs caused extensive damage and one dog attacked a person. The insureds
disputed that their dogs caused any damage. They also maintained that
the person who was attacked provoked the incident.
Held: For the company. Title 24-A M.R.S.A.
§ 3049(9) permits cancellation for a dog bite unless the insured
removes the dog after notice of cancellation or nonrenewal is received.
However, the evidence demonstrates that the language of § 3049(9)
is not included in the policy and an insurer is precluded from relying
on cancellation grounds that are not contained in the policy. See Bureau
of Insurance Rule Chapter 355 § 7(C)(2).
For similar reasons, the company may not rely upon § 3049(4)(A),
effective July 30, 2004, which permits cancellation upon the discovery
of “negligent acts or omissions by the insured substantially increasing
any of the hazards insured against.” The earlier version of §
3049(4), which corresponds to the language in the policy, required only
that the acts or omissions substantially increasing any of the hazards
insured against be “grossly negligent.” Therefore, in order
to prevail, the company must demonstrate not only a substantial increase
in hazard but also grossly negligent acts or omissions by the insureds.
The policy in question includes coverage for damages for which the insureds
are legally liable. It also includes coverage for medical payments for
bodily injury occurring to a person off the insured location if caused
by an animal owned by or in the care of an insured. Accordingly, liability
for personal injury caused by either of the insureds’ dogs, whether
on or off the insured premises, is one of the hazards insured against.
The evidence indicates that one of the insureds’ dogs bit a person.
The insureds’ knowledge of the dog’s behavior is relevant
to both their strict liability and their liability for common law negligence.
See Henry v. Brown, 495 A.2d 324, 326-327 (Me. 1985). Because the incident
at issue establishes the insureds’ knowledge of the dog’s
potential for dangerous behavior, the risk of civil liability in the
event of a subsequent occurrence is increased. Because the risk of injury
caused by the dog is within the scope of the policy, the heightened
risk of liability in the event of a second incident represents a substantial
increase in one of the hazards insured against.
The next question is whether the insureds are engaged in grossly negligent
acts or omissions. Simply the fact that that the insureds continue to
maintain the dog as their pet, by itself, does not rise to the level
of gross negligence. However, with no measures to prevent the dog from
becoming loose again, gross negligence exists. The company has demonstrated
that the insureds are engaged in grossly negligent acts that substantially
increase a hazard insured against. Policy cancellation is allowed.