In property law, old decisions are good decisions. New real property decisions tend to be rare things. However, a recent Kentucky Court of Appeals decision decided an issue of first impression in regard to real property law in Kentucky. As such, it is worthy of note.

In J.R. Watts and Lillian E. Watts v. Harry D. (Jack) Simpson and MW Development Services (Midwest) LLC, the Kentucky Court of Appeals was confronted with the question of whether or not a provision for specific performance could be enforced against an assignee who had taken nothing more than a simple assignment. This issue had not been decided before in Kentucky.

The Kentucky Court of Appeals adopted the position of the Seventh Cir. decision in Kneberg v. H.L. Green Co., 89 F.2d 100 (7th Cir. 1937). The Seventh Cir. in that case held that absent a specific agreement to the contrary, a seller of real property cannot force specific performance from someone who simply had been assigned the right to purchase the land.

Nearly all insurance policies contain a list of “exclusions”; these are factual circumstances under which the policy does not provide coverage. It’s safe to say that most insureds are unaware of many of these exclusions in their policies. Under most state law (including Kentucky), these exclusions must be construed narrowly, and when the exclusion can be interpreted in two different ways, the court will interpret it in a way most favorable to the insured.

That’s precisely what the Court of Appeals did in Reynolds v. Travelers Indemnity Company. The Reynoldses left for a week’s vacation and returned to find one of their homes had been burglarized, including their appliances, The water line to their refrigerator was severed, and water had leaked all over the floor, causing significant damage. Travelers said that one exclusion for “continued or repeated … leakage of water or steam over a period of time, weeks, months, or years, from within a … household appliance” applied, and there was no coverage.

The Court of Appeals found that the language was unclear whether the “period of time” was a separate and distinct time-span from the “weeks, months, or years.” Because the sentence could be interpreted reasonably in two different ways, the Court found the exclusion to be non-applicable.

Perhaps if the policy had read “over any period of time, including but not limited to, weeks, months, or years,” then the Court would have found no coverage. Sometimes, a few missing words makes all the difference.