Triangle Associates, Inc. v. LI Industries
Unpublished. Decided August 13, 2013 Michigan Court of Appeals Docket No. 307232.
The plaintiff was the general contractor on a construction project and had sub-contracted part of its roof installation work to the defendant. The section of the roof on which the defendant worked was defective, and damages occurred about two years after the installation. The plaintiff sought coverage as an additional insured under general liability policies issued to the defendant. The insurer denied coverage on the basis that defective workmanship is not an occurrence.
The trial court initially denied summary disposition for the insurer on the basis that the defendant’s defective work was not necessarily attributable to the plaintiff. After the case proceeded, and it was determined that the plaintiff was not an additional insured under the only applicable policy, the trial court granted summary disposition to the insurer, finding that the claim for coverage was for damage to the defendant’s own work product, and that an insured’s faulty workmanship is not an accident, and does not constitute an occurrence for purposes of liability coverage. The Court of Appeals affirmed.[su_box title=”Kallas & Henk Note”] While the Court suggested that coverage might be available in a case where an additional insured is claiming damages due to the defective work of another insured, the case law is clear that an insured’s faulty construction is not an occurrence for which coverage is available under a general liability policy. [/su_box]
Home-Owners Ins. Co. v. Chammas
Unpublished. Decided September 10, 2013 Michigan Court of Appeals Docket No. 310157.
The plaintiff denied any duty to defend or indemnify the defendant in a lawsuit against the individual defendant and his corporation in which the individual defendant intentionally shot and injured the underlying plaintiff. The defendants argued that there should be coverage because there was no intent to shoot the underlying plaintiff, but only to scare him. The trial court initially denied summary disposition to the plaintiff. While the Court of Appeals held that there was no coverage to the individual defendant, the Court remanded for further consideration as to whether the shooting could be considered accidental with regard to the corporate defendant. After a bench trial, the trial court held that it was not accidental, and not covered. The Court of Appeals affirmed.
The Court held that, when determining whether an act is accidental, only the incident leading to the injury is analyzed, and if that incident was not accidental from the standpoint of the insured who caused the injury, then the act is not accidental and there can be no coverage for any insured.[su_box title=”Kallas & Henk Note”] The Court has been consistent in finding that intentionally firing a gun directly at somebody else cannot be considered an accidental injury. In this case, the Court also based its decision on Mich Basic Prop Ins Ass’n v Wasarovich, 214 Mich App 319 (1995), rather than relying on decisions from other jurisdictions cited by the defendants. [/su_box]
State Farm Mut. Auto. Ins. Co. V. Mich. Mut. Risk Mgt. Auth., Inc.
Unpublished. Decided August 13, 2013 Michigan Court of Appeals Docket No. 306844.
This case arises out of a motorcycle accident in which the operator of the motorcycle was seriously injured when he struck a vehicle at a high rate of speed while being pursued by a police officer. The officer’s vehicle was insured by the defendant and the plaintiff insured the vehicle hit by the motorcyclist. The plaintiff claimed that the officer’s vehicle was involved in the accident because of the high speed chase, and that the defendant, as the insurer of that vehicle should be liable for a pro rata share of PIP benefits paid to the motorcyclist.
The trial court held that the officer’s vehicle was involved in the accident and that the defendant was joint in the order of priority with the plaintiff. The Court of Appeals affirmed. Even though the officer had slowed down prior to the motorcyclist’s impact with the other vehicle, and may have been out of the motorcyclist’s sight, the Court was persuaded that the police pursuit actively caused the motorcyclist to speed away and eventually crash. The police vehicle, according to the Court, therefore gave rise to the accident and was involved in that accident for purposes of PIP benefits.[su_box title=”Kallas & Henk Note”] The Court also made an interesting evidentiary ruling in this matter as a result of the plaintiff’s authorization of repairs to the vehicle struck by the motorcycle. The repairs were completed before the defendant had an opportunity to inspect the vehicle, and the Court determined that this constituted spoliation of evidence for which a sanction would have been appropriate, if the trial court in its discretion believed such a result was appropriate (it did not.) [/su_box]
Braverman v. Auto-Owners Ins. Co.
Unpublished. Decided August 20, 2013 Michigan Court of Appeals Docket No. 306492.
Plaintiff filed suit to obtain PIP benefits for the decedent’s estate as a result of a motorcycle accident. The accident occurred after dark when the decedent attempted to avoid a tractor/trailer that was turning left but was still in the roadway. The decedent avoided the truck by laying the bike down and there was no contact with the truck. The persons riding with the decedent testified that the tractor/trailer’s turn signal was not operating and that there were not lights on the truck. The truck driver and the police investigating the accident testified that the lights were operational.
The trial court held that the tractor/trailer was involved in the accident for purposes of PIP coverage because the accident resulted from the decedent’s reaction to the truck’s presence in the roadway. The Court of Appeals reversed. The Court held that the accident occurred, not through some active involvement of the truck, but merely because it was present in the road, and that the decedent’s reaction, not the truck itself, was the cause of the accident.[su_box title=”Kallas & Henk Note”] This decision is a little difficult to reconcile with other decisions of the Court, including the cases upon which the decision is based, and the recently decided case of State Farm Mut. Auto. Ins. Co. v. Mich. Mut. Risk Mgt. Auth., Inc. (see above) in that the decedent’s reaction to a truck moving slowly in front of her does not appear to be materially different from a PIP claimant’s reaction to being chased by a police vehicle. [/su_box]
Haley v. Farm Bureau Ins. Co.
Unpublished. Decided August 27, 2013 Michigan Court of Appeals Docket No. 302158.
While attempting to thaw frozen water pipes with a heat gun, one of the plaintiffs started a fire that burned their house. The defendant denied coverage for the loss, claiming that the fire was intentionally set and that the plaintiffs had misrepresented their loss. The defendant asserted that the plaintiffs provided inconsistent statements as to whether they saw flames as the pipes were thawed. The defendant also claimed that the plaintiffs were able to recover some of the items from their initial proof of loss and that the values they attributed to other personal property items was exaggerated.
The trial court denied summary disposition to the insurer, and also denied directed verdicts after the case was presented to a jury. The jury returned a verdict in favor of the plaintiffs, and the defendant appealed. The Court of Appeals affirmed (with the exception that the Court reversed on the amount of the judgment because the evidence did not support the amount awarded.) The Court held that reasonable minds could differ as to whether the plaintiffs intended to defraud merely because the statements in the proof of loss were inconsistent and some errors were made in assigning values to damaged property.[su_box title=”Kallas & Henk Note”] The precedential value of this opinion is limited because of its unique facts, however, the evidence of fraud upon which the defendant relied was not all that compelling. The over-stated value of the loss also was not an issue for the Court, which held that an insurer cannot prove fraud merely because of an error in a proof of loss. This suggests that, when dealing with an inaccurate loss statement, additional evidence of fraud will need to be presented. [/su_box]