Michigan Coverage Decisions, Issue 148

Durall v Home-Owners

Unpublished. March 29, 2011. Court of Appeals Docket No. 293910.

Plaintiff sustained a total loss of his residence as result of a fire. Defendant, plaintiffs homeowners insurer, denied the claim for failure to submit a proof of loss within 60 days as required by the insurance policy. The trial court granted summary disposition to defendant insurer.

On appeal, the plaintiff argued that the question of whether he adequately complied with the proof of loss requirement was a question of fact for the trier of fact and that summary disposition was improperly granted. The plaintiff claimed (1) that the fact that defendant made partial payments on the loss and (2) that he did not (as he claims) receive Defendants letter advising of the need to file the proof of loss within 60 days, relieved him of the obligation to file the proof of loss in a timely fashion. The Court of Appeals rejected these arguments finding that plaintiff was bound (1) by the terms of the insurance policy which also required timely filing of the proof of loss and (2) defendants refusal to waive the proof of loss requirement when it made the partial payments.

[su_box title=”Kallas & Henk Note”] This case is consistent with prior Michigan decisions which have enforced the proof of loss requirement. The court relied on the general principle that a party is bound by the terms of the insurance contract even if he/she did not read or understand the terms. [/su_box]


Hicks v Auto Club Group Insurance

Unpublished. May 3, 2011. Court of Appeals Docket No. 295391.

Plaintiffs, husband and wife, had a fire at their residence. They made a claim for contents in the amount of $70,000. Defendant insurer, denied the claim based on fraud and false statements in claiming more contents than were in the residence at the time of the fire. Plaintiffs filed suit and the trial court granted summary disposition to plaintiff wife on the basis that she was an innocent coinsured because she simply followed the directions above her husband in submitting the list of destroyed items.

The Court of Appeals reversed, finding that the wife actively participated and had to know that the list of items she submitted in her writing and testified to under oath were not in the residence at the time of the fire. As a consequence, the court found that she was not “innocent” as required for the innocent coinsured rule to apply.

[su_box title=”Kallas & Henk Note”] Contrast the finding in this case was that in the Stein decision, above. In this case, even though the court noted that, generally, credibility issues preclude summary disposition, the court found that the undisputed exhibits contradicted her testimony such that she could not be believed by any reasonable trier of fact. [/su_box]


Stein v Home-Owners Insurance Company

Unpublished, April 12, 2011. Court of Appeals Docket No. 295876.

Plaintiff had a fire at a residence and made a claim against defendant, her homeowner’s insurance carrier. Defendant denied the claim based on false statements. The trial court granted summary disposition in favor of defendant on the basis that plaintiff made false statements to defendant in support of the claim.

The Court of Appeals reversed and remanded finding summary disposition was inappropriate for the reason that the trial court improperly assessed the credibility of the plaintiff. The court held that credibility assessments are uniquely for the trier of fact.

[su_box title=”Kallas & Henk Note”] It is difficult to assess the Court of Appeals opinion in this case because the decision itself is devoid of a description of the facts. The decision does not say what false statements were alleged to have been made or when they were made in the process. Generally, Michigan case law supports the Court of Appeals statement that credibility determinations are to be made by the trier of fact, but if statements are made that are clearly inconsistent with known facts, summary disposition could be properly granted. [/su_box]


Schwartzenfeld V Nationwide Mutual

Unpublished. April 26, 2011. Court of Appeals Docket No. 296752.

Plaintiffs noticed water stains in their ceiling. It was later determined by both the adjuster for defendant insurer and plaintiff contractor and plumber that the stains resulted from water leakage coming from upstairs bathroom fixtures. Defendant denied coverage based on an exclusion for continuous or repeated seepage or leakage of water. The trial court granted summary disposition.

The Court of Appeals affirmed the finding that everyone that examined the problem agreed that the damage was the result of long-term water seepage. The court also found the exclusion to be unambiguous.

[su_box title=”Kallas & Henk Note”] In this case, the Court of Appeals decision rejects plaintiff’s efforts to interpret different exclusions together to attempt to create coverage. The court properly applied Michigan law that provides that if any exclusion applies then there is no coverage. [/su_box]

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