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03/24/76 KRAJENKE v. PREFERRED MUTUAL INSURANCE

March 24, 1976

KRAJENKE
v.
PREFERRED MUTUAL INSURANCE COMPANY



Appeal from Oakland, John N. O'Brien, J.

M. F. Cavanagh, P. J., and R. B. Burns and J. H. Gillis, JJ.

SYLLABUS BY THE COURT

1. Insurance -- Vacant Property -- Primary Residence -- Temporary Absence.

A homeowner's temporary physical absence from her primary residence is insufficient to render the house "vacant or unoccupied" for the purposes of an insurance policy exclusion clause which excludes recovery for vacant or unoccupied property.

2. Principal and Agent -- Cross-Claims -- Directed Verdict -- Agent's Authority -- Principal's Ratification.

On a cross-claim by an insurance agent against his principal for attorney fees arising out of a law suit against both the principal and agent by an insured, a directed verdict was improper where the agent had taken actions outside of the scope of his authority and the agent's actions were never ratified by the principal, the agent was acting for himself and not for his principal when upon learning of the principal's decision to deny insurance coverage on a home repair claim the agent authorized a contractor to proceed with the repairs and stated that the agent would pay the contractor if the principal did not.

3. Principal and Agent -- Liability of Principal -- Ratification -- Acts of Agent -- Personal Capacity.

A principal's subsequent admission of liability on an insurance claim does not operate as a legally effective ratification of prior actions by an agent which actions of the agent were contrary to the instructions of the principal when they were performed, where the agent's prior actions were not done or professedly done in the name of the principal.

4. Insurance -- Jury Instructions -- Exemplary Damages -- Scope of Consideration -- Relevant Law.

A new trial should be ordered where the instructions to the jury in an action to recover damages under a policy of insurance stated that exemplary damages may be a proper item of recovery without any further elucidation whatsoever as to the permissible scope of the jury's consideration of exemplary damages or the relevant law applicable.

The opinion of the court was delivered by: Burns

Complaint by Lesley Krajenke against defendants Preferred Mutual Insurance Company, Flame Gas Utica Corporation, and Meadowbrook, Inc., to recover losses for damages to her home as a result of pipes freezing and bursting. Cross-claim by Meadowbrook against Preferred alleging an agency relationship and seeking indemnification for any losses, the costs of litigation and attorney's fees. Directed verdict and judgment for plaintiff against Preferred, for Meadowbrook on its cross-claim, for Flame Gas absolving it of liability. Jury verdict and judgment for plaintiff against Preferred for additional and exemplary damages. Defendant Preferred appeals.

This appeal results from a suit filed by plaintiff against the various named defendants (hereinafter "Preferred Mutual", "Meadowbrook", and "Flame Gas") to recover losses for the damage to her home which occurred as a result of pipes freezing and bursting.

Plaintiff purchased an old farmhouse in September of 1970 and insured it with a Preferred Mutual homeowner's insurance policy purchased through Meadowbrook. She extensively remodeled the farmhouse and had a propane gas-fired central heating system installed. A 1000-gallon storage tank was installed by ...


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