Bates v. Hartford Insurance Company of the Midwest, 2:09-cv-12840

Bates owned a residential rental at 16148 Prairie, Detroit, damaged by a fire on June 17, 2008.
Bates learned of the loss on June 23, 2008 and reported it to Hartford on June 24, 2008.
Hartford requested the Detroit Police Department report; instead, a May 28, 2008 burglary report mentioning a carpet burn and broken windows was provided, raising questions about a prior undisclosed fire.
There is a dispute whether the Bates house was vacant immediately before the June 2008 fire, with Bates claiming continued occupancy by a tenant and Hartford arguing vacancy.
Hartford denied Bates’s claim under two theories: (i) vacancy exclusion for vandalism/mischief; (ii) concealment/fraud related to misrepresentations about prior damage.
Bates filed a diversity-based suit in district court; Hartford moved for summary judgment, Bates cross-moved for summary judgment on liability; the court denied Hartford’s motion on vacancy and part of the misrepresentation issue, and granted in part Bates’s motion, with remaining issues for trial.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether vacancy exclusion applies to arson/fire losses	Vacancy exclusion does not apply to arson losses.	Arson loss falls within vandalism/mischief exclusion.	Vacancy exclusion does not preclude fire coverage for arson, so issue for trial.
Whether the vacancy provision is void as a matter of Michigan law	Michigan law voids or limits vacancy provisions in fire policies.	Vacancy provision valid and enforceable.	Court finds vacancy provision not void as applied to this case.
Whether the house was vacant for 30 consecutive days prior to the loss	House was not vacant for 30 days; Bates contested timing.	House was vacant for the requisite period under the policy.	Factual dispute persists; not resolved on summary judgment.
Whether Hartford properly relied on concealment or fraud provision	No intentional concealment or misrepresentation; statements were truthful or immaterial.	There were misrepresentations supported by police report and EEO testimony.	Material facts in dispute; summary judgment on misrepresentation denied.
Whether misrepresentation/credibility issues are for jury to decide	Cease; credibility is for jury; no basis for summary judgment.	Court should resolve misrepresentation issue at summary stage.	Credibility and misrepresentation issues reserved for jury; no summary judgment on this issue.

Auto-Owners Ins. Co. v. Harrington, 565 N.W.2d 839 (Mich. 1997) (interpretation of unambiguous policy language; effectuate intent)
Raska v. Farm Bureau Mut. Ins. Co., 314 N.W.2d 440 (Mich. 1982) (ambiguities construed against drafter in favor of coverage)
West v. Farm Bureau Ins. Co., 259 N.W.2d 556 (Mich. 1997) (materiality and intent considerations in concealment/fraud provisions)
St. Paul Fire & Marine Ins. Co. v. Ingall, 577 N.W.2d 188 (Mich. App. 1998) (interpretation of policy terms and coverage)
Nastal v. Henderson & Assocs. Investigations, Inc., 691 N.W.2d 1 (Mich. 2005) (statutory interpretation guiding contract interpretation)
Moore v. Secura Ins., 759 N.W.2d 833 (Mich. 2008) (statutory construction principles; unambiguous language ends inquiry)