Michael E McCartha v. State Farm Fire and Casualty Company
326689
| Mich. Ct. App. | Aug 16, 2016Background
- On October 2, 2010 a large tree limb fell near/planted on the edge/gutter of McCartha’s house; plaintiff’s daughter observed gutter and fence damage but not interior damage at that time.
- Plaintiff filed claims with State Farm for (a) roof damage and (b) subsequent interior water damage; State Farm paid for debris removal and gutter/fence repairs but denied roof and interior damage claims.
- Inspections and photographs showed the roof was severely deteriorated before the tree limb fell (missing/worn shingles, exposed roof boards, prior repairs/tarp); an expert who inspected in March 2010 testified the roof needed replacement then and was leaking into the house.
- State Farm’s denials relied on policy exclusions for wear, tear, deterioration, and an anti-concurrent-causation/neglect exclusion; it also cited plaintiff’s failure to timely notify and to protect property.
- The trial court granted State Farm summary disposition under MCR 2.116(C)(10) concluding the exclusions applied; plaintiff’s later motion to amend (adding bad‑faith, statutory and punitive claims) and partial motion to compel discovery were denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether roof damage is covered or excluded as wear, tear, deterioration | McCartha argued the tree limb caused the roof damage and State Farm failed to prove deterioration caused the loss | State Farm argued photos, prior inspections, and expert testimony show preexisting deterioration so exclusion applies | Court held roof damage was preexisting wear/tear/deterioration; exclusion applies, no coverage |
| Whether interior water damage is covered when neglect and anti‑concurrent causation apply | McCartha argued interior damage resulted from the fallen limb and thus is covered | State Farm argued leaks preexisted, plaintiff failed to protect/repair (neglect), and anti‑concurrent clause bars coverage even if limb contributed | Court held interior damage was from preexisting deterioration and/or insured’s neglect; anti‑concurrent exclusion bars recovery |
| Whether plaintiff could amend to add an independent tort claim for insurer bad faith | McCartha sought to add a bad‑faith tort based on claim handling and investigation | State Farm argued Michigan does not recognize an independent tort for insurer bad faith; claim arises from the contract | Court held no independent bad‑faith tort exists; amendment would be futile |
| Whether plaintiff could add statutory claims (Insurance Code/UTPA/fraud) or punitive damages; and whether discovery should be compelled | McCartha sought private statutory remedies, penalties, and additional claim file/underwriting materials | State Farm argued statutes provide administrative or criminal remedies (no private cause of action), punitive damages not statutorily authorized, and requested materials were irrelevant or privileged | Court held statutory remedies are not privately actionable here (futility); punitive damages unsupported; discovery denial not an abuse of discretion |
Key Cases Cited
- Maiden v. Rozwood, 461 Mich 109 (procedural standard for MCR 2.116(C)(10) and opposing-party evidentiary burden)
- Auto-Owners Ins. Co. v. Churchman, 440 Mich 560 (exclusionary clauses strictly construed but clear exclusions enforced)
- Allstate Ins. Co. v. Keillor, 450 Mich 412 (coverage lost if any policy exclusion applies)
- Sunshine Motors, Inc. v. New Hampshire Ins. Co., 209 Mich App 58 (anti-concurrent causation/neglect exclusion interpretation)
- PT Today, Inc. v. Comm’r of the Office of Fin. & Ins. Servs., 270 Mich App 110 (standards for futility in leave-to-amend analysis)
- Epps v. 4 Quarters Restoration LLC, 498 Mich 518 (factors for inferring private cause of action from statute)