GLOUCESTER — A Gloucester family who rented a home from a family member was not covered by the homeowner's policy when the house burned down in 2015, the state Appeals Court has concluded. 

The unpublished ruling on Tuesday upheld a Salem Superior Court judge's dismissal of claims brought by Dana and Rebecca Laing against Merrimack Mutual Fire Insurance Company. 

The May 8, 2015, fire that swept through the home at 5 Colonial St. they rented from Rebecca's father, George Allen, destroyed "a substantial amount" of their possessions and claimed the lives of two pet cats. The cause was never determined. 

Ultimately, the value of those belongings was determined to be $142,000, according to court filings. 

They and Allen thought that Allen's insurance policy would cover their losses. 

But a Superior Court judge later concluded — and the Appeals Court agreed Tuesday — that it did not. 

The case illustrates how renters should never assume their belongings are covered, said one consumer law expert. 

While not specifically commenting on the Laing case, Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington, D.C., said it's always a good idea for renters — regardless of the circumstances — to have their own coverage for belongings.

"In general, for renters, don't assume you have coverage," said Rheingold. "It's a good idea to get your own insurance to protect you."

A homeowner's policy generally has a provision to cover a property owner for liability claims such as injuries from a condition caused by the owner, such as a defective heating system that starts a fire, but not for lost property, he said.

The policy obtained by Allen, the court found, covers his personal property, as well as the personal property of others while on the premises of the insured — Allen — with one critical provision: that he is also an occupant of the premises.

The policy goes on to say it will cover residents of his household who are relatives. Since the Laings are family members — daughter, son-in-law, and grandchildren — they and their lawyer, Joseph Orlando Jr., argued, they should be covered by Allen's policy. 

But were they all part of the same household? 

Taking into account both the common meaning of what a household is, and the couple's own arguments, the court found that the Laings were not part of Allen's household. 

The Laings' complaint contained nothing to show that Allen was connected to their home other than as their relative and landlord, the court concluded. In fact, most of their allegations "cut the other way," the court found, pointing to statements that they referred to themselves as tenants, that they had lived there since before Allen came to own the home, and that he had never lived there. 

They also noted that Allen had a separate policy on his own home.

The only case they were able to cite as precedent for two separate properties being considered the same household involved a couple that had separated but did not divorce and chose instead to maintain two residences. In that case, the husband was still using the first home as a mailing address and had a workshop he used regularly. 

Allen did store some personal property at the home, but the court found that was not enough to consider him a member of the household. 

The court also denied their claim that the insurance company was negligent for not advising them they were not covered, saying that there is no evidence the insurer was made aware that they were relying on Allen's policy for coverage. 

And the court found that there was no basis to reverse a decision by the Superior Court judge not to recuse himself after Orlando raised the suggestion that he was biased because he'd once worked in a law firm that was engaged in contentious litigation involving Orlando's firm. 

"We believe the court erred when dismissing the action" against Merrimack Mutual, "and we believe that the Court of Appeals erred in affirming the lower court's judgment," Orlando said in an emailed request for comment on the ruling and whether they will appeal.

Orlando said his clients hadn't yet had the opportunity on Tuesday to evaluate their options. "Much goes into that analysis and we will be weighing those options in the days to come," he said.

He said his clients did reach a settlement with another party in the case. 

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis. 

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