Appeal by defendant from Reid, Judge. Judgment entered 5 September 1978 in Superior Court, Carteret County. Heard in the Court of Appeals 20 September 1979.
Hill, Judge. Judges Vaughn and Erwin concur.
Although 21 exceptions were taken by the defendant, only six questions were brought forward. Of these, the principal question is whether or not the defendant had waived the sixty and ninety-day unoccupancy/vacancy clauses of the policy. The jury, by its verdict, so found, and we must decide if the matter as a matter of law should have been permitted to go to the jury.
In looking to the questions of whether or not the unoccupancy vacancy clauses -- both sixty and ninety days -- were violated, it appears that a violation was in existence at the date of the fire.
In the case of Firefighters Club v. Casualty Co., 259 N.C. 582, 131 S.E.2d 430 (1963), it is said that "occupancy" must be construed with reference to the type of property insured and the use intended. "The term 'occupied' implies a continuing tenure for a
period of greater or less duration, and does not embrace a mere transient or trivial use. Society of Cincinnati v. Exeter, 92 N.H. 348, 31 A. 2d 52 (1943); Lacy v. Green, 84 Pa. 514 (1877). A building is occupied when it is put to a practical and substantial use for the purposes for which it is designed. See 67 C.J.S. 84." Firefighters Club b. Casualty Co., supra, at p. 589.
This property was purchased as a tenant house and as rental property. Thus, the use contemplated by the plaintiffs was habitation by tenants or certainly more than a mere transient or trivial use such as when the premises were used for a pajama party, or even a casual inspection of the house.
The question then arises as to whether or not the company by the information received through its agent and actions on its part waived the unoccupancy/vacancy clauses. We hold so.
Firefighters Club v. Casualty Co., supra, points out three theories among the courts as to waivers of unoccupancy/vacancy clauses:
1. Some courts hold that a vacancy known to the insurer when it issues the policy constitutes the waiver of the policy provision with respect to that vacancy. Bledsoe v. Farm Bureau Mutual Insurance Company, 341 S.W. 2d 626 (1960).
2. A few cases hold that a waiver created by knowledge of an existing vacancy is not limited to that vacancy, but to any subsequent vacancy which may occur during the life of the policy. See McKinney v. Providence Washington Insurance Company, 144 W.V. 559, 109 S.E.2d 480 (1959).
3. Other courts, recognizing the recent change in policy provisions which merely suspend the insurance during a nonpermitted vacancy, hold that a vacancy existing at the time that the insurance issues is not a waiver of the policy provisions. The insured has such time as may be fixed by the policy and endorsements in which to occupy the ...