This diversity suit for breach of an insurance contract was dismissed on summary judgment and the plaintiffs (Estate of Luster) appeal presents issues of both contract interpretation and Indiana insurance law. Made! Luster was a widow living alone in her house in Merrillville, Indiana. She had a homeowner's insurance policy from Allstate 'Insurance Company. In October 2001, when she was eighty-three, she was injured in a fall, and after being released from the hospital moved into an extended-care facility. She executed a power of attorney to her lawyer. Rick Gikas, who is the representative of her estate in his litigation. She never returned home and died in April 2006. Some four and a half years after her fall. Gikas had notified Allstate of his power of attorney and had directed the company to bill the insurance premiums to his law office. No one lived in the house after she left Three months after her death her house still unoccupied a fire caused extensive damage. Gikas submitted a claim on behalf of the estate. An investigation indicated that the fire may well have been started by burglars. But the plaintiff denies this and the district fudge made no finding. In the count of the investigation Allstate discovered that the house had been unoccupied for tour and half years before kin. Luster's death and denied the claim, precipitating (has tening) this suit. Allstate continued billing Gikas for premiums. However and he continued paying them until October 2008. more than two years after the foe, when Allstate which claims not to have known that the policy was still in force until its lawyers read the estate's summary-lodgment brief that month purported to cancel the policy retro-actively to November 2001, and returned the premiums (or the subsequent period to the estate. The appeal requires us to consider (certain) provisions of the insurance policy: The policy required the insured to notify Allstate of any change in occupancy of the premises and excluded coverage for property loss caused by "any substantial change or increase in hazard" or by "vandalism or malicious mischief" if the insured's dwelling was unoccupied for more than thirty consecutive days immediately prior to the vandalism or malicious mischief. Gikas argues that the house WAS not unoccupied, because right up until her death Luster expressed the intention of returning to live there when her health permitted.
Give a sufficient consideration on the following matters:
i. Why did the court conclude that an unoccupied house did not necessarily create a substantial increase in hazard?
ii. Why did the court hold that Allstate's cancellation of the policy, retroactive to November 2001 (when Luster mowed all extended-care facility) was ineffective
iii. Was Luster's intent to return to her home when her health permitted sufficient to constitute occupancy? Why or why not?
iv. What fact, if it had been different, might have persuaded the court to rule in all states favor in this case? Discuss.