Jury Must Decide If Tenant Breached Duty to Obtain Fire Insurance

What Happened: An office lease required a home health agency tenant to obtain fire insurance on the “Premises.” The tenant got insurance for its property but not the building. The building burned down, and the landlord sued the tenant for damages. The court tossed the case, finding that the fire insurance clause was unenforceable because the lease didn’t define the term “Premises” that the tenant was required to insure. Without such a definition, the lease could be read as requiring the tenant to insure the entire building, the court reasoned.

Ruling: The Tennessee appeals court reversed the summary judgment ruling and ordered the case to go to trial.

Reasoning: Even without a definition, it was obvious from the lease “as a whole” that “Premises” didn’t refer to the entire building but just the leased space, noting that the term appeared in the use, alterations, and other clauses applying to the space that the tenant intended to use for its office. An insurance expert also testified that it would have been impossible for the tenant to get fire insurance on the leased space even if the term “Premises” had been clearly defined. However, the court concluded that the possibility of a fire insurer’s underwriting the kind of policy the lease required was a question of fact that had to be decided at trial.

• Coffey v. Buckeye Home Health Ctr., 2023 Tenn. App. LEXIS 43, 2023 WL 1498760