Michigan Battery Equipment Inc v. Emcasco Insurance Company
317 Mich. App. 282
| Mich. Ct. App. | 2016Background
- Michigan Battery insured a warehouse under an EMCASCO all-risk policy; roof trusses rotted due to prolonged water infiltration through deteriorated rubber grommets.
- In January 2014 accumulated snow/ice caused the rotted trusses to split and the roof to fall a few feet.
- Michigan Battery sued EMC for coverage of the resulting damage.
- EMC moved for summary disposition under MCR 2.116(C)(10); the trial court granted the motion, finding the loss was caused by wet rot and excluded by the policy.
- The policy contains an exclusion for "fungus, wet rot, dry rot and bacteria," with limited exceptions for fire/lightning, certain "specified causes of loss," and limited additional-coverage provisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the loss is covered under the all-risk policy despite wet rot | Michigan Battery contended the roof collapse resulting from rot is a covered loss under the all-risk policy | EMC argued the damage was caused by wet rot, which the policy expressly excludes | Held: Exclusion for wet rot applies; loss not covered |
| Whether any exclusion exception applies (fire/lightning, specified causes, or Additional Coverage) | Michigan Battery implied exceptions or other coverages might apply | EMC argued none of the exceptions apply because rot resulted from long-term water infiltration through roof grommets, not a specified cause or fire/lightning | Held: No exceptions apply; rot did not result from fire/lightning, a specified cause of loss, or flood; Additional Coverage inapplicable |
| Whether insurer bears burden to prove absence of coverage | Michigan Battery relied on all-risk presumption of coverage | EMC relied on exclusion language to deny coverage | Held: Insured must show coverage then insurer bears burden to prove absence of coverage; here exclusion clearly negates coverage |
| Whether summary disposition was proper | Michigan Battery contested trial-court ruling | EMC maintained no genuine issue of material fact and was entitled to judgment as a matter of law | Held: Summary disposition affirmed (no genuine issue; exclusion controlling) |
Key Cases Cited
- Henderson v. State Farm Fire & Cas. Co., 460 Mich. 348 (court construes unambiguous insurance provisions as written)
- McGrath v. Allstate Ins. Co., 290 Mich. App. 434 (policy language read as whole to give effect to every clause)
- Rory v. Continental Ins. Co., 473 Mich. 457 (court enforces unambiguous contract provisions)
- Hunt v. Drielick, 496 Mich. 366 (insured must first show coverage; insurer bears burden to prove absence of coverage)
- Auto-Owners Ins. Co. v. Churchman, 440 Mich. 560 (specific exclusions must be given effect; exclude risks insurer did not assume)
- Wilkie v. Auto-Owners Ins. Co., 469 Mich. 41 (interpretation/ambiguity questions reviewed de novo)
- Brown v. Farm Bureau Gen. Ins. Co. of Mich., 273 Mich. App. 658 (coverage lost if any exclusion applies)
- BC Tile & Marble Co., Inc. v. Multi Bldg. Co., Inc., 288 Mich. App. 576 (standard of review for summary disposition)
- Maiden v. Rozwood, 461 Mich. 109 (MCR 2.116(C)(10) factual sufficiency standard)
- McCoig Materials, LLC v. Galui Constr., Inc., 295 Mich. App. 684 (summary disposition proper when no genuine issue of material fact)