OPINION AND ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT [#47, 48]
I. INTRODUCTION
On August 6, 2013, Plаintiff, Triple Investment Group, LLC (“Triple Investment”), commenced this action against Defendant, The Hartford Steam Boiler Inspection and Insurance Company (“Hartford Steam Boiler”). In the Complaint,
Presently before the Court is the Defendant’s Motion for Summary Judgment. See Dkt. Nos. 47, 48. This matter is fully briefed, and a hearing was held on December 8, 2014. For the reasons discussed herein, the Court will GRANT Defendant’s Motion for Summary Judgment.
II. Factual Baceground
The Pontiac Silverdome (“Silverdome”) is an 80,000-seat stadium located at 1200 Featherstone Road, Pontiac, Michigan. The Silverdome was built in 1975, with an original roof that consisted of Teflon-coated fiberglass panels. The roof panels were air-supported and cable restrained. The air used to inflate and support the original roof was supplied by makeup air units situated at the top of the Silverdome. These air units were fixed along thе perimeter of the roof and forced air into the stadium, keeping the original roof inflated.
On March 4, 1985, the original Silver-dome roof collapsed due to accumulation of snow on the roof and strong winds. A company named Birdair manufactured a replacement roof for the Silverdome that consisted of 100 single-layer, Teflon-coated fiberglass panels. These panels had a lower profile making the replacement roof more resistant to snow and wind.
Additionally, the 1985 roof replacement incorporated a number of equipment upgrades, including the addition of 10 new rooftop makeup air units. These 10 new units were equipped with furnaces capable of operating in a “high-fire” setting; the high-fire setting helped melt snow on the roof. The 10 new rooftop units were installed as additions to four preexisting, auxiliary indirect furnaces that were part of the original construction of the stadium. The four preexisting furnaces were mounted in the north, south, east, and west quadrants of the Silverdome. Also, in addition to the ten new rooftop units, the Silverdome was equipped with 11 concourse heaters in order to heat the stadium for events. Thus, in total, the Silver-dome was equipped with 25 furnaces for heating the Silverdome and its roof.
Even with the additional furnaces, however, the Silvеrdome roof, suffered another tear in January of 1999. Birdair completed temporary repairs for this tear in January of 1999 and made permanent repairs in July of 1999. From 1992 to 2009, an individual named John Kissick was in. charge of operating and maintaining the Silver-dome roof and related equipment and systems. This responsibility later fell to Alan Allard (“Allard”), an appointee of Plaintiff, following Plaintiffs purchase of the Silver-dome at auction from the City of Pontiac for approximately $500,000, in December of 2009.
Upon purchasing the Silverdome, Plaintiff purchased an insurance policy (the “Policy”) — Number FBP2337892 — from the Defendant with effective dates of December 1, 2012 through December 1, 2013. Subject to all of its terms, conditions, definitions, and exclusions, the Policy provides “equipment Breakdown Coverage” for “covered equipment” located at the Silver-dome.
On December 24, 2012, a winter storm was expected to hit the Pontiac area. At the time, the west indirect furnace had ceased operating and was not serviced or returned to operation. Furthermore, of the 10 rooftop air units with furnaces and snow-melt capacity, only seven of the roof
In the days following the alleged failure .of the North Furnace, snow and ice began to accumulate on the roof of the Silver-dome. At approximately 1:30 a.m., on December 29, 2012, a large piece of ice slid down the Silverdome roof, tearing an approximate 5x20-foot hole at the bottom of one of the rectangular roof panels in the north section of the roof. In response, on that same day, Mr. Allard called the Met-rodome in Minnesota, the Superdome in New Orleans, and four different roof contractors to figure out how to repair the hole. Also, on December 29, 2012, Alex Loewy (“Loewy”), the Silverdome’s events coordinator, placed calls to Birdair to attempt to get someone to repair the hole.
On December 30, 2012, Loewy twice spoke with David Ricci of Birdair and was told Birdair would send someone to repair the Silverdome the morning of December 31, 2012. On December 31, 2012, Greg Francuch (“Francuch”) of Birdair implemented a temporary “stop-patch” repair. By the time Mr. Francuch implemented the stop-patch repair, Plaintiff contends that the hole had doubled in size to 10x40-feet.
Following the stop-patch repair, the Parties agree the next step would have been to perform a temporary “grid-patch” repair using mesh to cover the hole. The grid-patch repair was the repair that was used to repair the hole that formed in the roof in 1999. However, the temporary grid-patch repair never occurred;
Plaintiff asserts that, on January 1, 2013, the stop-patch repair failed, and the roof suffered even further tearing. After internal discussions, Plaintiff decided to deflate the roof on Jаnuary 2, 2013. Following the roofs deflation, Plaintiff claims gale force winds ravaged the deflated roof. By January 20, 2013, the roof was severely damaged and destroyed; however, Plaintiff had yet to provide any notice to Defendant regarding the alleged mechanical breakdown.
On January 25, 2013, Plaintiff submitted its first claim notice to Defendant regarding the furnace’s alleged mechanical breakdown. Defendant received Plaintiffs claim and conducted four inspections at the Silverdome using Defendant’s HYAC contractors, mechanical and structural consultants, and engineers. Defendant’s four inspections took place on February 5, 2013, February 28, 2013, March 21, 2013, and March 27, 2013. Additionally, Defendant asserts that it communicated with Birdair as a part of its investigation.
According to Plaintiff, it took Defendant’s HVAC contractor 27 days — from February 28, 2013 to March 27, 2013 — to analyze and fix the problem with the North Furnace. On July 19, 2013, upon the conclusion of its investigation, Defendant denied Plaintiffs insurance claim, explaining that there was no coverage under the Policy for Plaintiffs claim. Plaintiff later commenced this action on August 6, 2013. Plaintiff contends that the disputed insurance proceeds exceed $20 million.
III. Law & Analysis
A. Standard of Review
Rule 56(a) of the Federal Rules of Civil Procedure empowers the Court to render summary judgment “if the pleadings, depositions, answers to interrogаtories and admissions on file, together with the affidavits, if any, show that there is no genu
The standard for determining whether summary judgment is appropriate is “ ^whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ ” Amway Distributors Benefits Ass’n v. Northfield Ins. Co.,
If the movant establishes by use of the material specified in Rule 56(a) that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law, the opposing party must come forward with “specific facts showing that there is a genuine issue for trial.” First Nat’l Bank v. Cities Serv. Co.,
B. Legal Analysis
Michigan law governs this insurance dispute. Under Michigan law, the rules for construction of an insurance contract are the same as for any other written contract. See Comerica Bank v. Lexington Ins. Co.,
Insurance policies should be construed according to the well-settled principles of contract construction. See ABO Petroleum, Inc. v. Colony Ins. Co., No. 04-cv-72090,
When interpreting insurance contracts, the Court must first determine if the policy language is ambiguous. Harvey Oil Co. v. Federated Mutual Ins. Co.,
While the court should construe ambiguities in favor of the insured, the Michigan Supreme Court has instructed that “ ‘this does not mean that the plain meaning of a word or phrase should be perverted, or that a word or phrase, the meaning of which is specific and well recognized, should be given some alien construction merely for the purpose of bene-fitting an insured.’” Liberty Mut. Fire Ins. Co. v. Holka,
If the language of the insurance contract is unаmbiguous, the court must enforce the terms as written. Ray Indus. v. Liberty Mut. Ins. Co.,
First, Defendant contends that it is еntitled to ■ summary judgment because Plain
1. Plaintiff Did Not Provide Defendant with Prompt Notice of the Purported Mechanical Breakdown of the North Furnace.
The Policy at issue indicates that the insured was required to perform certain “Duties in the Event of Loss or Damage.” Dkt. No. 50 at 33 (Ex. A. p. HSB000034). In the event of loss or damage, the Policy indicated that that Plaintiff must “[g]ive [Defendant] prompt notice of the loss or damage, including a description of the property involved.” Id. (emphasis added).
The Court notes that “ ‘[a]n insurer is free to define or limit the scope of coverage as long as the policy language fairly leads to only one reasonable interpretation and is not in contravention of public policy.’ ” ABO Petroleum, Inc.,
Furthermore, although the term “prompt” is not defined under the Policy, the Court finds that there is one readily reasonable interpretation of the term. As previously discussed, a Policy’s failure to define a relevant term does not render the policy ambiguous. See Liberty Mut. Fire Ins. Co.,
Prompt notice hаs “generally been construed to mean within a reasonable time under the circumstances of the case.” 13 Couch on Ins. § 190:31 (2014); see also Dkt. No. 53 at 17-18 (citing Burgess v. American Fidelity Fire Ins. Co.,
The Sixth Circuit has found that, “[u]n-der Michigan law, late notice to an insurance company will not eliminate an insurer’s obligations under a policy unless the insurer can demonstrate that it has been prejudiced by the delay.” West Bay Exploration Co. v. AIG Specialty Agencies of Texas, Inc.,
Since the purpose of insurance notice provisions are to provide an insurer an opportunity to investigate and evaluate claims to defend against unsound ones, it follows that prejudice will be found if the insurer demonstrates that a delay in providing notice materially impaired the insurer’s ability to contest its liability to an insured. See, e.g., West Bay Exploration Co.,
To reiterate, the burden of demonstrating prejudice rests upon the insurer. See id. at 1036 (citing, amongst previously mentioned cases, Steelcase, Inc. v. Am. Motorists Ins. Co., No. 89-1344,
“An insurer must do more than simply elaijn that evidence was lost, physically altered, or has otherwise become unavailable and that witnesses have died, disappeared, or their memories have faded.” Aetna Cas. & Sur. Co.,
The question of prejudice is generally to be left to the trier of fact. West Bay,
In determining whether an insurer’s position has actually been prejudiced by the insured’s untimely notice, courts consider whether the delay has materially impaired the insurer’s ability: (1) to investigate liability and damage issues sо as to protect its interests; (2) to evaluate, negotiate, defend, or settle a claim or suit; (3) to pursue claims against third parties; (4) to contest the liability of the insured to a third party; and (5) to contest its liability to its insured. See Aetna Cas. & Sur. Co.,
Here, the Parties dispute whether Plaintiff provided prompt notice, which is a condition precedent to Plaintiffs recovery under the Policy. Additionally, the Parties dispute whether Defendant has demonstrated that it was materially prejudiced by the notice provided by Plaintiff. Plaintiff argues that Defendant’s arguments are
Plaintiff does not dispute that it waited 30 days before prоviding notice to Defendant: Instead, Plaintiff argues that Defendant “does not cite to any case indicating thirty-day notice is, by definition untimely.” Dkt. No. 53 at 23. In response, Defendant correctly points out that it did, in fact, cite “[ABO Petroleum, Inc.,] and note[ ] that Judge Cleland, applying Michigan law, found no question of fact that a thirty-day delay in providing notice was late.” Dkt. No. 62 at 6 (citing Dkt. No. 48 at 22); see also ABO Petroleum, Inc.,
Additionally, Plaintiff argues that Defendant is not еntitled to summary judgment because “there is no evidence to suggest the roof could have been reinflated and repaired.” Dkt. No. 53 at 24. Plaintiffs argument that there is no evidence suggesting the roof could have been repaired is not compelling; particularly in the context of explaining that Defendant was not prejudiced. Occasionally, catastrophic and unexpected accidents may occur that immediately destroy an insured’s property. In such situations there will understandably be little evidence for insurers to conduct an investigation. This is not one of those situations.
Here, from the outset, Plaintiffs Complaint makes clear that thе Silverdome roof was “completely shredded and destroyed” before notice was given to Defendant. See Dkt. No. 1 at ¶ 30. Per the undisputed facts, Plaintiff took multiple actions between the time it learned of the alleged furnace malfunction and the time it intentionally deflated the roof. Plaintiff then waited until the roof was completely destroyed by gale force winds between January 3, 2013 and January 20, 2013, before providing notice of the alleged furnace malfunction to the Defendant on January 25, 2013. Given these facts, the Court finds that Plaintiffs actions and delay in providing notice materially prejudiced Defendant’s investigation of the North Furnace and the Silvеrdome’s roof.
Additionally, if this case proceeded to trial, Defendant could avoid liability by demonstrating the Silverdome’s roof was, in fact, repairable before Plaintiff intentionally deflated it on January 2, 2013. Had Defendant’s experts or consultants been given an opportunity to examine the hole in the roof before its deflation, this showing could have been made. Again, however, given Plaintiffs actions, such a showing is unavailable to support Defendant’s position.
As Defendant explains, “plaintiff handed [Defendant] a total loss instead of the partial loss that existed on December 24, 2012 ... the partial loss that still existed when the initial roof tear occurred on December 29th, or еven the partial loss that remained as of January 2nd, before the roof was deflated.” Dkt. No. 62 at 7. The Court finds that this delay prejudiced Defendant by depriving it of the opportunity to conduct an investigation of both the initial hole in the roof and the North Furnace.
Plaintiff attempts to justify its delay in giving notice by arguing that it “had a massive crisis on its hands caused by the mechanical breakdown of the North Furnace.” Dkt. No. 53 at 24. Plaintiff also argues that the Defendant “wants to play Monday-morning quarterback” with respect to this unfortunate situation. Id. However, Defendant is not playing “Monday-morning quarterback” by noting that it was never afforded an opportunity to perform the following tasks, including: repairing the furnace before the total destruction of the roof; analyzing whether the purported broken furnace affected the roof; analyzing if the roof, in fact, could have been repaired; or recommending measures to mitigate any potential loss from the alleged broken furnace.
Plaintiff argues that “once the roof was breached on December 29th, there was nothing anyone could do to save it given the extreme weather conditions.” Dkt. No. 53 at 24. Plaintiffs position that the furnace could not have been repaired and the roofs destruction was a fait accompli is speculative. More importantly, it is not relevant because the Defendant need not prove that it could have fixed the damage to the roof. The Court reiterates that Defendant is only required to demonstrate that it was prejudiced by Plaintiffs late notice; not that the roof could have been re-inflated or repaired. See West Bay Exploration Co.,
After reviewing the arguments and the undisputed facts, it is clear that “one conclusion only is reasonably possible[:]” Defendant was prejudiced as a matter of law. See, e.g., West Bay Exploration Co.,
2. The Evidence Shows That The Purported Fortuitous Event Was Not Solely Attributable to the Mechanical Breakdown of the North Furnace.
Additionally, even if a reasonable jury could conclude that Plaintiff gave Defendant prompt notice, the Court would still find that Plaintiff cannot show that the roofs destruction was “solely attributable” to an accident involving the North Furnace. The first page of the Equipment Breakdown Coverage Form indicates that the Policy “provides insurance for a Covered Cause оf Loss[.j” Dkt. No. 50 at 25 (Ex. A at HSB000025). According to the Policy, the “Covered Cause of Loss for this Equipment Breakdown Coverage is an ‘accident.’ ” Id. The policy specifically states that coverage applies “only to the direct result of an ‘accident,’ ” and Defendant “will pay only for that portion of the loss, damage or expense that is solely attributable to the ‘accident.’ ” Id. (emphases added). The Policy further states that “[wjithout an ‘áceident,’ there is no Equipment Breakdown Coverage.” Id.
The term “accident” is defined as “a fortuitous event that causes direct physical damage to ‘covered equipment.’ ” Id. (emphasis added). The Policy explicitly notes that “covered equipment” does not include, amongst other things, “[structure, including but not limited to the structural portions of buildings and towers, scaffolding, and any air supported enclosure.” Id. at 39 (Ex. A. at HSB000039). The fortuitous event “must be one of the listed events, which .include circumstances such as a “mechanical breakdown” and “artificially generated electric current.” Id. at 25 (Ex. A. at HSB000025).”
Plaintiff argues that “the destruction of the roof was caused by the ‘fortuitous event’ of the breaking of 3 vanes of the combustion blower wheel of the North Furnace on or before December 24, 2012.” Dkt. No. 53 at 26. Plaintiff further argues that this mechanical breakdown rendered the North Furnace inoperable, and that “the inability of the North Furnace to heat the roof in the area of thе North Furnace directly led to ice tearing a hole in the roof directly over the area of the inoperable North Furnace.” Id. (emphasis in original).
The Parties dispute whether the hole was, in fact, located directly over the North Furnace. The Parties further dispute whether the North Furnace was even the cause of the hole. For purposes of this Summary Judgment Motion, the Court will assume that the hole was directly over the area of the North Furnace. The Court will also assume that the hole was caused by an inoperable North Furnace as Plaintiff asserts. As such, looking at the evidence in a light most favorable to the non-moving party, the Court finds, for purрoses of this Motion, that there was a fortuitous accident as defined by the Policy covering the North Furnace.
In this case, the accidental mechanical breakdown of the North Furnace caused the ice to accumulate DIRECTLY OVER the North Furnace, and to ultimately tear a hole through the roof within 50 feet of the North Furnace. Onсe the hole formed, the wind tore the roof and there was no repair which could have been performed to prevent the roofs deflation and ultimate destruction. Had the North Furnace not had an accidental mechanical breakdown, the hole in the roof would not have formed. The claim is actually that simple. Therefore, the destruction of the roof was the direct result of the initial accident. According to the plain language of the HSB Policy, all of the accidents flowing from the initial mechanical breakdown of the North Furnace are one accident under the Policy and coverage apрlies.
Dkt. No. 53 at 27 (emphasis in original).
The claim is not actually as simple as Plaintiff asserts. Plaintiffs conclusion that “all of the accidents flowing from the initial mechanical breakdown of the North Furnace are one .accident under the Policy” can neither be squared with the Policy’s direct and solely attributable requirements, nor previous positions taken by Plaintiff.
Plaintiff relies on the Policy’s definition of “One Accident” to reach its conclusion that that “all of the accidents flowing from the initial mechanical breakdown of the North Furnace are one accident under the Policy.” The Policy defines “One Accident” as “all ‘accidents’ occurring at the same time frоm the same event. If an ‘accident’ causes other ‘accidents,’ all will be considered ‘one accident.’ ” Dkt. No. 50 at 40 (Ex. A. at HSB000040).
The Defendant aptly notes that Plaintiffs interpretation of “One Accident” in this context is incorrect because “there is one and only one alleged covered ‘accident’ here, the one Plaintiff claims occurred to the north direct furnace on December 24, 2012. This is not a case about multiple covered ‘accidents.’ ” Dkt. No. 62 at 9 n. 3 (emphasis added). Plaintiff has not identified another covered accident under the policy that flowed from the purported mechanical breakdown of the North Furnace.
Plaintiffs argument would be more compelling if the destruction of the Silver-dome’s roof was an accident as defined in the Policy. However, this is simply not the case. Wind damaged roofs are not one of the events that are enumerated under the Policy. See Dkt. No. 25 at 50 (listing the events that can be deemed accidents). Plaintiffs misunderstanding of the Policy is detrimental to its case. Nothing illustrates this fact more than Plaintiffs failure to put forth an argument rebutting Defendant’s contention that the North Furnace
Plaintiff has taken the position throughout this litigation that a winter storm was a cause of the Silverdome roofs destruction. See, e.g., Dkt. No. 1 at ¶ 30 (“On or about January 20, 2013, the Pontiac area suffered a strong winter storm with winds measuring upwards of 60 mph ... the storm completely shredded and destroyed the fabric of the roof[.]”); Dkt. No. 53 at 24 (“The roof was destroyed by gale force winds between January 3rd and January 20th.”). Furthermore, Plaintiff has indicated that it intentionally deflated the roof. Dkt. No. 53 at 13 (“TIG therefore deflated the roof on January 2, 2013 for public safety conсerns.”).
Defendant argues that Plaintiffs deliberate deflation of the roof is just one of many examples demonstrating that the destruction of the roof was not the direct result of the North Furnace’s purported mechanical breakdown. However, the Court need not delve into whether the Plaintiffs decision to deflate the roof was an intervening cause.. The - Court finds that the destruction of the Silverdome roof was not solely attributable to the purported mechanical malfunction of the North Furnace. Consequently, Defendant’s coverage under the Policy does not apply.
IV. Conclusion
For the reasons discussed herein, the Court will GRANT Defendant’s Motion for Summary Judgment. The Complaint is HEREBY DISMISSED in its entirety, and judgment will be entered for the Defendant.
SO ORDERED.
Notes
. Furthermore, the Court notes that several cases cited by the Defendant supports its position. See, e.g., Cont’l Studios v. Am. Auto. Ins. Co.,
. The Court finds it curious that, in less than one page, Plaintiff changes its position regarding the location of the hole that was purportedly caused by the inoperable North Furnace. Initially, the Plaintiff stated that the hole was directly over the North Furnace. A page later, however, Plaintiff stated that the hole was within fifty feet of the furnace. Compare Dkt. No. 26 at 26 ("[T]he North Furnace directly led to ice tearing a hole in the roof directly over the area of the inoperable North Furnace.”) (emphasis in original), with id. at 27 ("the North Furnace caused the ice to accumulate DIRECTLY OVER the North Furnace, and to ultimately tear a hole through the roof within 50 feet of the North Furnace.”) (bold emphasis added).