Cleveland Indians Baseball Co. L.P. v. New Hampshire Insurance
2013 U.S. App. LEXIS 17629
6th Cir.2013Background
- This is a diversity action arising from a inflatable slide collapse at a Kids Fun Day event before a Cleveland Indians game in 2010.
- Plaintiffs Johnson's estate and Brown sued the Indians and others in Ohio state court for punitive and compensatory damages; the dispute centers on insurance procured by National Pastime via CSI Insurance Group.
- National Pastime was contracted to obtain a comprehensive liability policy naming the Indians as an additional insured, and CSI procured a policy from NH Insurance but omitted inflatable coverage.
- A Certificate of Liability Insurance sent to the Indians listed them as Additional Insured but did not reflect the full policy terms, and CSI later acknowledged the inflatable exclusion existed in the quoted policy.
- New Hampshire Insurance denied defense/indemnity based on an amusement device exclusion; district court granted summary judgment against CSI and for NH Insurance, and the appellate court affirmed in part and reversed/remanded in part.
- The majority holds CSI may owe a duty to the Indians independent of any contract and reverses the summary judgment on negligence and negligent misrepresentation claims, remanding for further proceedings on those theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did CSI owe a duty to the Indians independent of contract? | Indians argue CSI knew insurance was for Indians and relied on its certificate. | CSI's duty, if any, derives from contract with National Pastime; no independent duty to Indians. | Yes; CSI owed an independent duty to Indians; reversed and remanded. |
| Should the economic loss doctrine bar Indians' negligence claims against CSI? | Doctrine does not bar negligence when broker negligently procures insurance. | Economic loss doctrine bars purely economic loss in negligence. | Not a bar here; doctrine does not preclude the negligence claim. |
| Is there a viable negligent misrepresentation claim against CSI? | Certificate of Insurance misrepresented coverage; Indians relied to proceed with events. | Certificate merely indicates procurement; no privity or actionable misrepresentation under Michigan law. | Remand permitted; negligent misrepresentation claim may proceed along with negligence. |
Key Cases Cited
- Loweke v. Ann Arbor Ceiling & Partition Co., 489 Mich. 157 (2011) (establishes independent duty to third parties despite contract)
- Fultz v. Union-Commerce Assocs., 470 Mich. 460 (2004) (limits tort duties to independent duties not encompassed by contract)
- Hill v. Sears, Roebuck and Co., 492 Mich. 651 (2012) (recognizes independent duty and foreseeability in tort)
- Williams v. Polgar, 391 Mich. 6 (1974) (abstracter liable to third parties; reliance issues in tort)
- Ritchie-Gamester v. City of Berkley, 461 Mich. 73 (1999) (applies Restatement principles to tort duties)
- McAuley v. Gen. Motors Corp., 457 Mich. 513 (1998) (damages and duty concepts in modern tort law)
- Orel v. Uni-Rak Sales Co., 454 Mich. 564 (1997) (negligence claims in commercial context recognized)
- Molecular Tech. Corp. v. Valentine, 925 F.2d 910 (6th Cir. 1991) (foreseeability and duty to foreseeably harmed third parties)
- West American Ins. Co. v. Meridian Mutual Ins. Co., 230 Mich. App. 305 (1998) (certificate of insurance represents procurement but not policy specifics)