741 F.2d 874 (6th Cir. 1984), 83-1414, Salamey v. Aetna Cas. & Sur. Co.

Docket Nº:83-1414.
Citation:741 F.2d 874
Party Name:Emil SALAMEY, Plaintiff-Appellee, v. AETNA CASUALTY & SURETY COMPANY, Defendant-Appellant.
Case Date:August 28, 1984
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

Page 874

741 F.2d 874 (6th Cir. 1984)

Emil SALAMEY, Plaintiff-Appellee,



No. 83-1414.

United States Court of Appeals, Sixth Circuit

August 28, 1984

Argued July 19, 1984.

Page 875

Robert F. Helfand, Susan Tukel (argued), Denenberg, Tuffley, Thorpe, Bocan & Patrick, Southfield, Mich., for defendant-appellant.

Roland J. Jersevic (argued), Saginaw, Mich., for plaintiff-appellee.

Before KENNEDY, Circuit Judge, CELEBREZZE, Senior Circuit Judge, and NEESE, Senior District Judge. [*]

Page 876


Aetna Casualty & Surety Company (Aetna) appeals from a judgment in favor of the plaintiff Emil Salamey for breach of a contract for fire insurance. On appeal, Aetna argues that the District Court erred in excluding certain evidence of motive and in awarding excessive damages for lost profits. We find that the trial court committed no error, and affirm.

Emil Salamey owned a convenience store in Bay City, Michigan, which was destroyed by fire in September 1980. Salamey had fire insurance coverage for the store from the defendant Aetna. In January 1981, Aetna denied Salamey's claim on the grounds that he had set the fire or caused it to be set and that he had committed fraud in submitting his claim. Salamey brought this action against Aetna for breach of contract.

At trial, neither party disputed that the fire was intentionally set. Aetna attempted to show that Salamey had an economic motive to set the fire by introducing expert testimony that the store was losing money. Aetna also showed that Salamey and his father had received interest-free loans due on demand from his uncles to purchase the store, and theorized that one uncle, Jaafer Khalil, had demanded repayment of his loan. Salamey in response offered evidence that he had raised the profit margin so that the store was making money, and that Khalil had not called in the loan.

The insurance contract included coverage for business interruption following a fire. Under the clause, the insured would receive compensation for business losses during the time required to resume normal business operations, not exceeding the time required to rebuild, replace or repair the insured property or in any case twelve months. The parties agreed that with due diligence Salamey's store could have been rebuilt in two and a half months.

The court instructed the jury, over Aetna's objection, that if Aetna's failure to pay Salamey's claim caused his inability to return to business, they could award damages for lost profits beyond two and a half months and up to the time of trial. The jury found in favor of Salamey and awarded a verdict of $160,000 for loss of the building, $100,000 for loss of its...

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