Libralter Plastics, Inc. v. Chubb Group of Ins. Companies, Docket No. 132745

• Decision Date: 03 May 1993
• Docket Number: Docket No. 132745
• Parties: LIBRALTER PLASTICS, INC., Plaintiff-Appellant, v. CHUBB GROUP OF INSURANCE COMPANIES, a foreign corporation, and Federal Insurance Company, a foreign corporation, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 742

502 N.W.2d 742

199 Mich.App. 482

LIBRALTER PLASTICS, INC., Plaintiff-Appellant, v. CHUBB GROUP OF INSURANCE COMPANIES, a foreign corporation and Federal Insurance Company, a foreign corporation, Defendants-Appellees.

Docket No. 132745.

Court of Appeals of Michigan.

Submitted Nov. 18, 1992, at Lansing.

Decided May 3, 1993, at 9:00 a.m.

Released for Publication July 30, 1993.

Butzel Long by James E. Wynne and Daniel R.W. Rustmann, Detroit, for plaintiff-appellant.

Gregory & Associates, P.C., by Alan G. Gregory, Troy, for defendants-appellees.

Before TAYLOR, P.J., and SHEPHERD and MARILYN J. KELLY, JJ.

MARILYN J. KELLY, Judge.

This case involves interpretation of language in defendants' insurance policy covering plaintiff's business property. Plaintiff appeals from an Oakland Circuit Court order granting summary disposition to defendants under MCR 2.116(C)(10). Plaintiff argues that the trial court erred in granting the motion, because a genuine issue of material fact exists. We agree and reverse.

I

Plaintiff manufactures plastic products and is insured by defendants. Defendant Federal Insurance Company is a member of defendant Chubb Group of Insurance Companies.

One of plaintiff's customers entrusted two kirksite injection molds to plaintiff for use in producing six hundred plastic boat launchers. Plaintiff originally stored the molds inside its production buildings. In time, it moved them to an unsecured area on its property out-of-doors. When the owner later inquired about another production run, plaintiff was unable to locate the molds. After further searching, plaintiff determined that they had been lost and filed a theft claim under its commercial insurance policy with defendants. Defendant Chubb denied the claim.

Plaintiff filed suit against defendants for the replacement cost of the molds. Defendants filed a motion for summary disposition asserting that no genuine issue of material fact existed; the loss of the molds fell within the insurance clause exclusion for "mysterious disappearances." Defendants supported the motion with deposition testimony from plaintiff's vice-president, Robert Bretz. He stated that the molds had disappeared, and he was uncertain whether they had been stolen.

Plaintiff countered the deposition testimony with statements from an affidavit by Bretz. In it, Bretz asserted that kirksite has intrinsic value in the injection mold industry and is easily melted and recast for constructing other molds. He indicated that persons skilled in the industry, including himself, would consider molds of this substance to be stolen if they became lost and unaccounted for.

The trial court granted defendants' motion for summary disposition, ruling that the mysterious disappearance exclusionary clause applied.

II

In construing an insurance contract, courts must first determine whether coverage exists. Allstate Ins. Co. v. Freeman, 432 Mich. 656, 668, 443 N.W.2d 734 (1989). Next, they must determine whether an exclusion precludes coverage. Id. Therefore, we first determine whether plaintiff in this case created a genuine issue of material fact that coverage existed for the loss of the molds.

A motion for summary disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim. In deciding on it, the trial court must give the benefit of reasonable doubt to the nonmoving party. It determines whether a record might be developed which would leave open an issue upon which reasonable minds could differ. Hutchinson v. Allegan Co. Bd. of Road Comm'rs. (On Remand), 192 Mich.App. 472, 480-481, 481 N.W.2d 807 (1992). All reasonable inferences are drawn in favor of the nonmoving party. Perez v. KFC Nat'l Management Co., Inc., 183 Mich.App. 265, 267-268, 454 N.W.2d 145 (1990), citing Dagen v. Hastings Mutual Ins. Co., 166 Mich.App. 225, 229, 420 N.W.2d 111 (1987). The party opposing the motion may not rest upon mere allegations or denials in the pleadings. It must set forth specific facts using documentary evidence to show the existence of a genuine issue for trial. Hutchinson, 192 Mich.App. at 481, 481 N.W.2d 807.

The insurance policy in this case provides coverage for loss to personal property of others not owned by the insured but in its care, custody or control. Plaintiff asserts that the facts presented would lead a jury to conclude that the molds had been stolen, a loss insured under the policy. Although loss by theft is not explicitly mentioned as a covered loss in the insurance policy, both parties agree that defendants' coverage would apply if the molds were stolen.

Plaintiff asserts that there was adequate circumstantial evidence from which the jury could draw an inference that the molds had been stolen. The two molds weighed four hundred pounds each and could not be easily moved. The kirksite which composed them is a valuable alloy used in the plastic injection mold manufacturing industry. The molds were outside when the loss occurred. Defendants argue that this evidence led to nothing more than conjecture and that, to find the molds had been stolen, the jury would have to deal in speculation.

Circumstantial evidence may be sufficient to establish a case. Firemen's Ins. Co. v. Sterling Coal Co., 348 Mich. 564, 83 N.W.2d 319 (1957). However, parties opposing a motion for summary disposition must present more than conjecture and speculation to meet their burden of providing evidentiary proof establishing a genuine issue of material fact. McCune v. Meijer, Inc., 156 Mich.App. 561, 563, 402 N.W.2d 6 (1986), citing Szidik v. Podsiadlo, 109 Mich.App. 446, 451, 311 N.W.2d 386 (1981). A conjecture is simply an explanation consistent with known facts or conditions, but not deducible from them as a reasonable inference. Kaminski v. Grand Trunk W.R. Co., 347 Mich. 417, 422, 79 N.W.2d 899 (1956), citing City of Bessemer v. Clowdus, 261 Ala. 388, 394, 74 So.2d 259 (1954).

III

Michigan courts have yet to interpret insurance policy language similar to that used here. However, other jurisdictions have addressed the same language in similar factual situations. See Long v. Glidden Mutual Ins. Ass'n., 215 N.W.2d 271 (Iowa, 1974).

In the Long case, the plaintiffs were covered under an insurance policy for crop theft. The policy expressly excluded loss caused by a mysterious disappearance. Long harvested three thousand bushels of soybeans and placed them in three overhead bins. When preparing to deliver the beans to market, Long discovered that one bin was four hundred bushels short. A police investigation revealed no evidence of theft. Nonetheless, the trial court concluded that the beans had been stolen.

In Long, the Iowa Supreme Court recognized that an inference of theft is justified under certain circumstances. These include when property disappears without the owner's knowledge or authority, appears not to have been accidentally mislaid or lost and could not have strayed by itself. Id., at 273. The beans were of a quantity and bulk not readily susceptible to being accidentally mislaid or lost. Id. Unlike livestock, they could not walk away. The absence of indicia of a forced entry was not relevant, because the beans were stored in such a manner that they could have been stolen without leaving signs of entry. Id., at 273-274. The court concluded that there was sufficient circumstantial evidence to allow the trier of fact to conclude that theft was more probable than any other theory.

IV

Consistent with Long, plaintiff in this case need not rebut every possible theory which the evidence could support. See Kaminski, 347 Mich. at 422, 79 N.W.2d 899; Long, at 274. Cf. Raff v. Farm Bureau Ins. Co. of Nebraska, 181 Neb. 444, 149 N.W.2d 52 (1967). If there is evidence pointing to one theory of causation, indicating a logical sequence of cause and effect, it does not matter if the evidence can support other plausible theories. Kaminski, 347 Mich. at 422, 79 N.W.2d 899.

A jury could reasonably infer based on the evidence presented here that theft was more probable than any other theory of loss. The inference could be drawn...