In certain circumstances, a landlord may become liable to a tenant for "wrongful eviction". A case for damages for wrongful eviction may include any of a number of different claims that arise under Texas law, and liability for wrongful eviction may be based upon intentional misconduct, or even accidental or innocent failure to comply with complicated eviction procedures set-forth in the Texas Property Code. Such liability may be premised upon the mere service upon the tenant of a Notice to Vacate which does not comply with applicable law. It some instances, liability for multiple and punitive damages may even be based upon an oral threat or statement made by the landlord to the tenant. For this reason, it is recommended that landlords seek advice from competent and experienced legal counsel before communicating with their tenants in any way that may be construed as an eviction threat.
Some landlords maintain wrongful eviction insurance coverage to insure agsinst such claims. This type of coverage is often available under commercial rental property insurance policies, but not under a typical Texas homeowner's policy. However, there are some limitations to wrongful eviction insurance coverages.
In the recent New York case of Mamaroneck Avenue Corp. v. Hartford Fire Ins. Co. (N.Y.App., 2nd Dept., April 22, 2008), a New York Appellate court held that invasion of an organization’s leasehold interest is not a covered risk under the “personal and advertising injury” provisions of a Commercial General Liability policy. The underlying complaint against the insured landlord alleged that such landlord “embarked on a plan of harassment and coercion with the intention of causing [claimant] to terminate its leasehold,” which included allegations of “[t]respassing upon [claimant's] premises and interfering with [claimant’s] business by appearing, unannounced, accompanied by Fire Department personnel and the City Building Inspector . . . to solicit or elicit non-existent fire code violations.” The liability policy’s definition of “personal and advertising injury” included “wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor.” Noting that other "personal and advertising injury" offenses distinguish between "persons" and "organizations," the court held that wrongful eviction claims apply only to natural "persons." In reaching its conclusion, the court relied on cases from other jurisdictions, including Stonelight Tile v. California Ins. Guar. Assn., 150 Cal App 4th 19; Mirpad, LLC v. California Ins. Guar. Assn., 132 Cal App 4th 1058; and Supreme Laundry Servs. v. Hartford Cas. Ins. Co., 2007 US Dist LEXIS 18134 (ND Ill. 2007).
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