Bates v. Hartford Ins. Co. of The Midwest, Case No. 09–12840.

CourtUnited States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
Writing for the CourtJULIAN ABELE COOK, JR., District Judge.
Citation787 F.Supp.2d 657
PartiesEddie P. BATES, Plaintiff,v.HARTFORD INSURANCE COMPANY OF the MIDWEST, Defendant.
Docket NumberCase No. 09–12840.
Decision Date03 March 2011


John N. MacKinnon, MacKinnon & Higgins, Berkley, MI, for Plaintiff.Michael T. Small, Harvey, Kruse, Grand Rapids, MI, for Defendant.


JULIAN ABELE COOK, JR., District Judge.

In this case, the Plaintiff, Eddie Bates, alleges that the Defendant, the Hartford Insurance Company of the Midwest, breached the parties' insurance contract when it wrongfully denied his requests for payment under his fire insurance policy. Currently before the Court are Hartford's motion for summary judgment and Bates's counter-motion for summary judgment as to liability.


Bates owns a residential rental property at 16148 Prairie in Detroit, Michigan, that was damaged by a fire on June 17, 2008. Bates asserts that he did not learn about the fire loss until his return to the United States from a vacation on June 23, 2008. He reported the fire loss to Hartford on the following day (June 24th). Upon its receipt of this claim, Hartford sought a copy of the police report from the Detroit Police Department. However, rather than sending a report relating to the June 17th fire, the Police Department forwarded a report, dated May 28, 2008, which recorded, among other things, a burglary on May 23rd at the Bates house. This report incorporated a statement from Bates that the front and back windows at this home had been broken and “the living room carpet was burned.” Hartford contends that this report is evidence that there had been an undisclosed fire in his home prior to the incident in June for which Bates had submitted his insurance claim. However, Bates maintains that there was no fire at this home prior to the June 2008 fire, and that the carpet sustained only minor cigarette burns.

In addition, there is a dispute between the parties as to whether the Bates house was vacant in the days which immediately preceded the fire. There is evidence that Shanese Johnson signed a one-year lease agreement with Bates for her use of the house as a tenant beginning on March 1, 2008. However, Johnson, while acknowledging that she had brought some her clothing and kitchen utensils into the rental property on Prairie, denies having spent a single night in the house and insists that all of her personal belongings had been removed prior to April 1st. This version is contested by Bates, who submits that Johnson did not vacate the premises until the early days of May. In fact, he points to a landlord-tenant proceeding on April 29, 2008, in the 36th District Court of Michigan which required Johnson to vacate the premises and surrender the keys by May 9, 2008. However, Bates contends that she neither surrendered the house keys nor removed her possessions until some time after May 19, 2008.

Following the completion of its investigation, Hartford denied Bates's request for payment under the parties' insurance contract. Feeling aggrieved by this rejection, Bates filed a law suit on June 17, 2009, in the Wayne County Circuit Court of Michigan, which was subsequently removed to this Court on the basis of its diversity jurisdiction, 28 U.S.C. §§ 1332; 1441. On November 1, 2010, Hartford filed a motion for the entry of a summary judgment, contending that (1) the house on Prairie had been vacant for more than thirty consecutive days prior to the onset of the fire which, in turn, barred any payment due to the vacancy exclusion within the vandalism and malicious mischief provision of the insurance contract; and (2) Bates had concealed or misrepresented a material fact relating to his claim for damages—an allegation which, if established, would bar any payment according to the concealment or fraud provision within the parties' insurance contract.

Bates, in opposing Hartford's motion, has filed a counter-motion for summary judgment with respect to the issue of liability. It is his position that (1) the vacancy exclusion does not apply to arson fire losses, (2) the thirty-day vacancy clause is void as a matter of law in the State of Michigan, (3) the house on Prairie was not vacant-within the meaning of the policy—for thirty consecutive days prior to the fire, and (4) Hartford's misrepresentation defense is legally flawed because there is no evidentiary support for its allegation that there had been an earlier fire at this home. Throughout their written pleadings and oral arguments, the parties have traded accusations in which they charged each other with erroneous characterizations of the facts and/or purposeful misinterpretations of the insurance contract. These exchanges continued without either party yielding the legal ground to the other.


The purpose of the summary judgment rule, as reflected by Federal Rule of Civil Procedure 56, “is to isolate and dispose of factually unsupportable claims or defenses ....” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Therefore, the entry of a summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A fact is ‘material’ for purposes of summary judgment if proof of that fact would have the effect of establishing or refuting an essential element of the cause of action or a defense advanced by the parties.” Aqua Grp., LLC v. Fed. Ins. Co., 620 F.Supp.2d 816, 819 (E.D.Mich.2009) (citing Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984)). In order for a dispute to be genuine, it must contain evidence upon which a trier of the facts could find in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Singfield v. Akron Metro. Hous. Auth., 389 F.3d 555, 560 (6th Cir.2004). When assessing a request for a summary judgment, a court “must view the facts and all inferences to be drawn therefrom in the light most favorable to the non-moving party.” 60 Ivy Street Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir.1987). The entry of a summary judgment is appropriate if the nonmoving party fails to present evidence which is “sufficient to establish the existence of an element essential to its case, and on which it will bear the burden of proof at trial.” Celotex, 477 U.S. at 322, 106 S.Ct. 2548.

Thus, the moving party has the initial obligation of identifying those portions of the record that demonstrate the absence of any genuine issue of a material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. Thereafter, the nonmoving party must “come forward with some probative evidence to support its claim and make it necessary to resolve the differences at trial.” Boyd v. Ford Motor Co., 948 F.2d 283, 285 (6th Cir.1991); see also Anderson, 477 U.S. at 256, 106 S.Ct. 2505. The presence or the absence of a genuinely disputed material fact must be established by (1) a specific reference to “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials,” or (2) a “showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56(c)(1).


Because the jurisdiction of the Court in this case is founded on diversity of citizenship grounds, Michigan substantive law-including its principles of statutory construction and contract interpretation—governs. Thus, a court must interpret the insurance policy so as to “best effectuate the intent of the parties and the clear, unambiguous language of the policy.” Auto–Owners Ins. Co. v. Harrington, 455 Mich. 377, 565 N.W.2d 839, 841 (1997) (citation and internal quotation marks omitted). Under the present circumstances, a court is obliged to examine the contract as a whole and give meaning to all of its terms. Id. Unambiguous words and terms are construed according to their plain and ordinary meanings, St. Paul Fire & Marine Ins. Co. v. Ingall, 228 Mich.App. 101, 577 N.W.2d 188, 192 (1998), and are “given a meaning in accordance with their common usage,” Cavalier Mfg. Co. v. Employers Ins. of Wausau, 222 Mich.App. 89, 564 N.W.2d 68, 70–71 (1997). “While ambiguities in a policy are generally construed in favor of the insured, the [c]ourt will not create ambiguities where none exist.” Id. at 71. “If a fair reading of the entire contract of insurance leads one to understand that there is coverage under particular circumstances and another fair reading of it leads one to understand there is no coverage under the same circumstances [,] the contract is ambiguous and should be construed against its drafter and in favor of coverage.” Raska v. Farm Bureau Mut. Ins. Co., 412 Mich. 355, 314 N.W.2d 440, 441 (1982), overruled on other grounds by Smith v. Globe Life Ins. Co., 460 Mich. 446, 597 N.W.2d 28 (1999); see also Vushaj v. Farm Bureau Gen. Ins. Co., 284 Mich.App. 513, 773 N.W.2d 758, 759 (2009). Although the insured bears the burden of proving coverage, the insurer bears the responsibility of proving that an exclusion applies. Heniser v. Frankenmuth Mut. Ins. Co., 449 Mich. 155, 534 N.W.2d 502, 505 n. 6 (1995).

Similarly, under Michigan's statutory construction principles, courts are to construe statutes so as to effectuate a legislative intent. Moore v. Secura Ins., 482 Mich. 507, 759 N.W.2d 833, 838 (2008). Thus, courts are obliged to “review the language of the statute itself and give the words used by the Legislature their common and ordinary meaning.” Id. If the language is unambiguous, the analysis by the court is at an end, and “further construction is neither required nor permitted.” Nastal v. Henderson & Assocs. Investigations, Inc., 471...

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