Farm Bureau wins appeal and judgment for insured is set aside where garage tenant dies in fire

Farm Bureau sued its insured and the victim's family, seeking a declaratory judgment that it did not owe coverage under a homeowner liability policy.  Michelle Schoemer's was the Personal Represerntative of Carl Schoemer, who died in a fire.  He was living above the garage of Edward and Diana Walsh, Farm Bureau's insureds.  The trial court held that the Farm Bureau policy should apply to cover Schoemer's liability claim against the Walshs, and Farm Bureau appealed.

The Court of Appeals reviewed the record and concluded that judgment should not have entered against Farm Bureau.  It held that there was a question of fact with regard to whether Farm Bureau could exclude the Walsh's liability from its coverage, based on the argument that Walsh sometimes repaired vehicles in his garage and was therefore operating an excluded "business."  The appeals panel rejected the insurer's argument that the insured "premises" should not include coverage for a tenant or for the garage.  The Appeals Court also rejected Farm Bureau's argument that the Walsh's violation of a City ordinance was a "criminal act" that invalidated coverage.