A New York appellate court has reinstated a theft claim brought by a warehouse owner against its insurer, finding that factual disputes over the property’s usage and occupancy precluded dismissal of the case. The decision, issued April 3 by the Appellate Division, Third Department, centers on the interpretation of vacancy and occupancy exclusions in a commercial multi-peril insurance policy.
Lok-N-Logs, Inc., which owns a warehouse in the Village of Sherburne, Chenango County, filed a claim with Leatherstocking Cooperative Insurance Company after copper and brass were stolen from the building’s electrical and plumbing systems during a break-in in April 2020. Leatherstocking denied the claim, invoking policy exclusions that bar coverage for vandalism when a property is vacant for more than 30 consecutive days, and that suspend coverage entirely if the property is vacant or unoccupied for more than 60 days.
The insurer maintained that the building, formerly occupied by a commercial dog food business and another tenant, had been effectively abandoned following the tenants’ departure in December 2019. It pointed to the disconnection of electrical service in February 2020 and the absence of regular commercial operations as evidence supporting the exclusions.
The policy, however, did not define “vacant” or “unoccupied.” In the absence of contractual definitions, the court turned to established legal precedent. Vacancy, it explained, generally refers to a property being empty of contents, while occupancy hinges on the regular presence of inhabitants—definitions rooted in New York case law stretching back to the 19th century.
Testimony from Lok-N-Logs’ president, James Webb, showed that while commercial tenants had vacated the premises, the company continued to use the building to store construction materials. One employee visited twice a week for maintenance. Another stored personal belongings there and hosted weekend garage sales. Webb himself visited the property weekly, though he acknowledged that it was not staffed daily.
At the trial level, Supreme Court Justice Mark Masler sided with the insurer, granting summary judgment and dismissing the complaint. But on appeal, the Third Department reversed, holding that both parties failed to meet their initial burdens on summary judgment. The court found that a jury could reasonably conclude the building was in continued commercial use and not vacant or unoccupied under the terms of the policy.
In doing so, the court stressed the importance of evaluating vacancy and occupancy “in view of the subject-matter of the contract, and of the ordinary incidents attending the use of the insured property.” Because the building was classified in the policy as a commercial warehouse, the court noted that regular visits for storage and maintenance may suffice to meet occupancy requirements.
The ruling sends the case back to the trial court for further proceedings, keeping Lok-N-Logs’ claim alive and placing the factual nuances of property usage squarely before a jury.
The case is Lok-N-Logs, Inc. v Leatherstocking Cooperative Insurance Company, 2025 NY Slip Op 01989, case number CV-23-2412, in the Appellate Division, Third Department.
Lok-N-Logs is represented by Gustave J. DeTraglia Jr. of DeTraglia Law Office in Utica. Leatherstocking Cooperative Insurance Company is represented by Ryan M. Mura of Mura Law Group PLLC in Buffalo.
This decision highlights the practical complexities that insurers face in enforcing vacancy-related exclusions, particularly in commercial policies where usage patterns can be irregular but ongoing. It also reinforces the need for clear policy language and documentation when underwriting properties with intermittent or limited activity.
