Insurance – Fire – Automatic Extinguishing System
Insurance – Fire – Automatic Extinguishing System
Where a defendant insurance company denied a claim for fire damage, a grant of summary disposition in the insurer’s favor should be affirmed because the property did not have an automatic extinguishing system (AES).
“On June 20, 2020, a fire occurred at plaintiff’s building in Warren, Michigan; the building housed a marijuana growing operation.
“After the fire, plaintiff filed a claim under the policy, but defendant denied the claim because the property did not have an automatic extinguishing system (AES).
“The trial court granted defendant’s motion and denied plaintiff’s motion. It held that defendant was entitled to summary disposition because the policy unambiguously precluded coverage if the insured property did not have an AES, and it was undisputed that there was no AES on plaintiff’s property. The trial court also held that defendant’s inspections of the property did not operate as a waiver of the policy language requiring an AES. The court noted that the inspections were for defendant’s purposes, not plaintiff’s benefit. The trial court also rejected plaintiff’s arguments that defendant was estopped from enforcing the AES requirement, and that the policy should be reformed to remove the AES requirement.
“Initially, plaintiff argues that the language of the policy is ambiguous, and that it should be construed against defendant and in favor of coverage because an AES is not defined in the [Protective Safeguards Endorsement (PSE)]. We disagree.
“We disagree with plaintiff that the language of the PSE is ambiguous because it does not provide a definition of a ‘P-9’ or AES.
“Plaintiff also argues that defendant should be precluded from denying coverage based on both the terms of the policy and the doctrine of equitable estoppel. We disagree.
“Plaintiff also argues that the trial court erred by denying plaintiff’s claim that the insurance policy should be reformed due to a mutual mistake by the parties. We disagree.
“Plaintiff also argues that defendant was not entitled to summary disposition because there are genuine issues of material fact to be decided by a jury regarding (1) whether plaintiff’s existing fire prevention equipment was sufficient to meet defendant’s expectations under the insurance policy, and (2) whether defendant engaged in inequitable conduct by continuing to collect premiums from plaintiff while knowing that it would not be liable for any fire loss because plaintiff’s property did not have an AES. We disagree.”
23771 Blackstone LLC v. Conifer Ins. Co.; MiLW 08-107406, 9 pages; Michigan Court of Appeals unpublished per curiam; Boonstra, J., Gadola, J., Maldonado, J.; on appeal from Wayne Circuit Court; Howard E. Gurwin for appellant; Joseph Fraser for appellee.
Read More: https://milawyersweekly.com/news/2024/03/31/insurance-fire-automatic-extinguishing-system/