Agricultural Law NetLetter - Friday, August 21, 2015 - Issue 330

** HIGHLIGHTS **

A Justice of the British Columbia Supreme Court has concluded that a marijuana growing operation in a private residence did not fall within the "farming" exclusion under the homeowner's insurance policy. The grow op was conducted by either the homeowner or his wife. The exclusion in the policy for the unlawful cultivation of marijuana did not apply because the house was not destroyed as a result of the grow op, but as a result of arson. The insurer was required to pay the loss. (Davidson v. Wawanesa Insurance Co., CALN/2015-019, [2015] B.C.J. No. 1701, Supreme Court of British Columbia)

** NEW CASE LAW **

Davidson v. Wawanesa Insurance Co.; CALN/2015-019, Full text: [2015] B.C.J. No. 1701; 2015 BCSC 1383, Supreme Court of British Columbia, S.C. Fitzpatrick J., August 10, 2015.

Insurance -- Exclusion for "Farming" -- Whether Marijuana Growing Operations are "Farming".

The Plaintiff, Steven Davidson ("Davidson"), sued Wawanesa Insurance Company ("Wawanesa") to recover the value of his Kamloops, British Columbia residence and its contents which were destroyed by fire in April of 2010.

The house was destroyed as a result of arson. The arson occurred the day after a police raid of the house revealed a marijuana grow operation and what the police described as a substantial amount of stolen property and illegal firearms.

Davidson claimed he had no knowledge of the illegal grow op.

Wawanesa denied coverage under the policy on a number of grounds, including the ground that coverage was excluded because the house was being used for "farming" purposes.

The Wawanesa policy provided, in part:

SECTION I

LOSS OR DAMAGE NOT INSURED

"We" do not insure:

...

(4) loss or damage to structures or buildings used in whole or in part for "business" or "farming" purposes;

...

(10) any loss or damage resulting from any illegal activity:

(a) of the "Insured";

(b) of any tenant of the "Insured"; or

(c) the relatives or "residence employees" of either;

arising directly or indirectly from the growing, cultivating, harvesting, processing, manufacture, distribution, or sale of any drug, including but not limited to cannabis,...whether or not "you" have any knowledge of such activity or are unable to control such illegal activity...

The policy defined "business" and "farming" as follows:

"Business" means a trade, profession or occupation. Business does not include "farming".

"Farming" means the ownership, maintenance or use of premises for the production of...