TOV Injury and Safety Blog

Commercial tenant held responsible for damage caused by fire

In American States Insurance and Ratcliff v. Hampton, dba VIP Truck & Trailer, a building owner and his insurer sued the tenant who caused a fire in the leased premises for the damage caused to his building.  Under the parties' written lease, Hampton had assumed responsibility for any damage resulting from "his negligence or the negligence of invitees or guests."  Hampton argued, however, thast Ratliff's purchase of fire insurance and his admission that his building was under-insured constituted proof that the landlord had assumed the risk associated with a fire caused by Hampton.

The Courts rejected this analysis, and distinguished this case from a prior case where the tenant's only relevant leasehold duty was to pay the insurance premiums incurred by the landlord.

Farm Bureau's efforts to avoid paying fire loss are discredited by court

Brittany Smith's home burned.  She had bought coverage with Farm Bureau.  Farm  Bureau demanded that Smith complete the copious Proof of Loss which can be required by law (and it has short time limits, by the way) and she filled it out including between $900 and $1,000 dollars of personal property in the residence destroyed by fire but not owned by her.  She explained that apparent discrepancy to Farm Bureau when it forced her to sit for an examination under oath.  Nevertheless, Farm Bureau attempted to void her policy and refused to pay her the insured value of her loss--which was in excess of $200,000.00 in real and personal property.

Farm Bureau evades another obligation

Dynamic Land, L.L.C., bought commercial insurance from Farm Bureau on a two-unit commercial building.  It was renovating the insured property when a sprinkler system pipe broke.  It attempted to recover for lost rent and actual expenses of nearly $300,000.00, incurred over the twelve months the property was under repair.  Farm Bureau denied payment, arguing that the company had not shown an "actual loss of business income" during the repair period. 

Court of Appeals refuses to overturn jury verdict regarding building fire

The owners of the vacant Bagley Building in Detroit sued the company that was demolishing an adjacent building, the Statler-Hiltorn Hotel, after the Bagley Building was damaged by fire.  The owners claimed that the fire in the Bagley Building was caused by the Defendant's demolition activities.  The jury disagreed, and the owners argued on appeal that the jury's decision was "against the great weight of the evidence."  

The latest in insurance "loophole" arguments

A superficial search of this weblog will provide numerous examples of insurers attempting to avoid obligations they have collected premiums to cover--through nonsensical or perverse construction of the insurance policy contract.  The industry hit a new low in Texas this fall, however, when Great American Insurance Company filed an argument claiming that it was not responsible to provide "excess" coverage for several deaths that resulted from an office building fire.  The insurer is claiming that although its policy including fire liability coverage, it owes no coverage for the seven deaths that occurred in a 2007 fire because the victims all died of smoke inhalation.  The insurer is arguing that it owes no coverage for smoke inhalation deaths because it included an exclusion in the policy for damages caused by "pollution".   

Claimants' rights are extinguished by execution of allegedly-unintended Release

In Jack v. Hastings, the Court of Appeals upheld the Grand Traverse County Ciruit judge's dismissal of a follow-up contract claim brought by the owners of a condominium against their insurer.  The condo owners had suffered a substantial water damage claim and received a $34,000.00 payout by its own insurer.  The owners then pursued a negligence claim to recover more fully for their damages and achieved a settlement of an additional $180,000.00 from the at-fault party.  The owner then attempted to pursue a contract action against its own insurer, to recover the remainder of his damages. 

Farm Bureau denies another claim on a technicality

Farm Bureau has been one of the more aggressive insurers in relying on the pro-insurance Michigan Supreme Court to avoid paying claims.  It was successful again in Sherman-Nadiv v. Farm Bureau, where the insured wasn't allowed to challenge a jury verdict because it had not filed the proper motion in the lower court.  The case involved a rental property that the plaintiffs had insured with Farm Bureau.  The policy contained language in the fine print that excluded coverage if the home was "unoccupied" for 30 days, unless it was "being constructed".

Is my insurance agent my agent or the insurance company's agent?

The Court of Appeals issued an interesting opinion addressing this topic last week.  In Genesee Food Services, Inc. v. Meadowbrook, Inc., two judges of the Court of Appeals held that the Plaintiffs could sue their insurance agent for [allegedly] arranging inadequate insurance, despite the fact that the Plaintiffs had executed a release that held harmless Citizens Insurance and its "agents".   Genesee Foods had experienced a disastrous fire after its agent, Meadowbrook, placed them with Citizens Insurance Company.   Meadowbrook had earlier executed an agency agreement with Citizens, and its attorneys argued that by the plain language of the Release and Settlement Agreement with Citizens, Meadowbrook was immune from suit.

Fire Insurance claim filed in accordance with original policy limitations is "late" and dismissed

James Carpenter sued Michigan Basic Property Insurance Association for losses suffered in a fire.  Michigan Basic's original policy allowed Carpenter two years in which to sue.  The Company had issued an amendatory endorsement reducing this limitation period to one year (usually computed from the time the insurer formally denies liability--but don't count on it--Randolph v. State Farm). 

Farm Bureau strikes again: "You expected us to pay a claim?"

  Beware of the small print in your insurance contract:  you can't negotiate the language or change it; but the insurer and some judges will strangle you with it.

Over-reaching Farm Bureau takes two hits in one week

  Farm Bureau insurance has been very aggressive in attempting to enlist the activist Michigan judiciary in its campaign to deny insureds' purchased benefits.  For example, it has been a leader in the effort to avoid paying any liability benefits under its policies, if the "negligence" of the wrong-doing insured is also "in the nature of a criminal act" (this vague  policy phrase includes negligent discharge of a BB gun, negligently endangering a child, failing to take the door off an abandoned refrigerator, and dozens of other "crimes").  Michigan is about the only jurisdiction that allows such a broad interpretation of "criminal" acts in insurance policies, leaving many paying insureds without the coverage that they thought they had purchased.  Recently, Farm Bureau took a slap-down from the Court of Appeals on two efforts to further restrict insured's rights.