In 1968, Pauline J. and James Osbon, Sr. divorced. In 1971, Pauline purchased a home which was financed with a mortgage from Troy & Nichols, Inc. The mortgage required Pauline to maintain insurance, including coverage for loss by fire, on her home. National Union Fire Insurance Company of Louisiana (National Union) was selected as the insurer and P.J. Osbon was the named insured.
In 1978, Pauline remarried James Osbon. On February 15, 1990, Pauline's home was destroyed by a fire. An insurance claim was filed with National Union. National Union denied the claim asserting the defense of arson. Pauline and James filed suit. On September 4, 1991, an amended petition was filed removing James Osbon
The issue for our determination is whether Pauline Osbon is barred from recovering under the policy issued by National Union because her home and its contents were destroyed by a fire intentionally set by her husband, James Osbon, Sr.
La.R.S. 22:691 sets forth the form for standard fire insurance policies issued in the State of Louisiana. The pertinent provisions of the standard fire insurance policy form provide:
La.R.S. 22:691F(2) (emphasis added). The phrase "the insured" is not defined in the Insurance Code. We find that the phrase "the insured" is ambiguous because it could refer to the named insured, any insured as defined in the policy, or the particular insured seeking coverage who commits an act triggering the exclusion or condition.
The article "the" is singular and is used to particularize the subject spoken of. "The" is a word of limitation. Black's Law Dictionary (6th ed.). Hence, "the" insured means only one insured. We find that the
This interpretation is in line with the legislative intent in enacting the exclusion and condition contained in La.R.S. 22:691F(2). Specifically, we do not believe that the legislature intended to impute the incendiary actions of an insured to the innocent co-insured who has no control over the unauthorized conduct. Nor do we think that the legislature intended to penalize an innocent insured, here, a victim of arson, with the perpetrator of a wrongful act. That is, having lost the property, the innocent insured would be victimized once again by the denial of the proceeds under the insurance policy. We do not believe that the legislature intended for the statute to have such a harsh and inequitable result.
Moreover, this interpretation is in line with other jurisdictions that have interpreted similar exclusions and conditions contained in statutes and insurance policies. Courts in other jurisdictions generally focus on the article modifying the word "insured," specifically, "the" insured, "an" insured, and "any" insured. A majority of courts interpret "any insured" as applying to all insureds as defined by the policy. Thus, the entire policy would be void if any one insured committed arson thereby precluding recovery by an innocent co-insured. Spezialetti v. Pacific Employers Ins. Co., 759 F.2d 1139 (3rd Cir. 1985); Hobgood and Lamb, Recovery by an Innocent Co-Insured, For The Defense 3 (July 1993). Similarly, "an insured" has been interpreted as applying to any unspecified insured that commits a wrongful act. Thus, a policy using the phrase "an insured" would bar all insureds from recovering if any insured commits arson. Hobgood and Lamb, supra, at 8-9; Vance v. Pekin Ins. Co., 457 N.W.2d 589 (Iowa 1990). Conversely, courts have found that "the insured" is singular and voids the policy only with respect for the insured who commits the wrongful act thereby permitting the innocent insured to recover. Ponder v. Allstate Ins. Co., 729 F.Supp. 60 (E.D.Mich.1990).
Although Pauline Osbon is entitled to coverage under our interpretation of La.R.S. 22:691, this does not end our inquiry because the exclusion in the policy issued by National Union does not conform with the condition and exclusion provisions contained in the statute. The relevant provisions of the National Union policy provide:
The language of the policy excludes coverage when an intentional act is caused by the named insured or a spouse who is a resident of the household. Thus, it appears that under the policy, an innocent spouse such as Pauline Osbon is excluded from seeking coverage because her loss was a result of the intentional wrongful conduct of her husband.
Thus, our inquiry is narrowed. The issue becomes whether the policy must be reformed to conform with the standard fire insurance policy as provided by La.R.S. 22:691.
La.R.S. 22:691 B provides that "[n]o policy or contract of fire insurance shall be made, issued or delivered by any insurer... on any property in this state, unless it shall conform as to all provisions, stipulations, agreements and conditions, [of the standard fire insurance policy]." Additionally, La.R.S. 22:691.2 provides:
Moreover, unlike other standard provisions required by the Insurance Code, provisions required by the standard fire insurance policy form cannot be waived by the commissioner of insurance. La.R.S. 22:623.
The intentional act exclusion in National Union's policy does not conform to the standard fire policy form provided in La.R.S. 22:691. Moreover, the intentional act exclusion coupled with the definition section of the policy does not provide coverage equivalent to or in excess of the coverage required by La.R.S. 22:691F(2) as interpreted by this court. Since National Union failed to provide coverage in conformity with or in excess of the standard fire insurance policy form, reformation of the policy to conform with the standard fire policy form is appropriate. See Rudloff v. Louisiana Health Services and Indemnity, 385 So.2d 767, 771 (La.1980). Thus, Pauline Osbon is not barred from recovering under the policy issued by National Union for the loss occasioned by the incendiary actions of her husband.
The court of appeal found that the damage exceeded the National Union policy limits of $32,000.00 for the dwelling, Pauline Osbon's separate property, and $6,400.00 for loss of use thereof. Hence, she is entitled to recover these amounts less any amount paid to the mortgagee under the loss payable clause contained in the policy. Additionally, the court of appeal found that the damage exceeded the policy limits of $16,000.00 for contents. Since the record does not reflect Pauline Osbon's interest in the contents of the dwelling, the extent to which she is entitled to recover under the policy for this loss cannot be determined. Accordingly, we find it is necessary to remand the case to the trial court to take further evidence on Pauline Osbon's interest in the contents and to render a proper judgment for this loss.
For the reasons assigned, the judgment of the court of appeal is reversed and set aside. The case is remanded to the district court to enter a judgment in favor of Pauline Osbon and against National Union Fire Insurance Company of Louisiana for $32,000.00 for the dwelling and $6,400.00 for the loss of use less any amount paid to the mortgagee under the loss payable clause contained in the policy. The district court is further ordered to take evidence on Pauline Osbon's interest in the contents and to render a proper judgment for this loss. The rights of all parties to appeal the issue of the extent of coverage of the contents to the court of appeal are reserved. The district court is to fix the appropriate interest due in the judgment. All costs are assessed against National Union Fire Insurance Company of Louisiana.