AXIS Insurance v. Innovation Ventures, LLC

737 F. Supp. 2d 685, 2010 U.S. Dist. LEXIS 78559, 2010 WL 3124160
CourtDistrict Court, E.D. Michigan
DecidedAugust 4, 2010
DocketCivil Action 08-CV-15298
StatusPublished

This text of 737 F. Supp. 2d 685 (AXIS Insurance v. Innovation Ventures, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AXIS Insurance v. Innovation Ventures, LLC, 737 F. Supp. 2d 685, 2010 U.S. Dist. LEXIS 78559, 2010 WL 3124160 (E.D. Mich. 2010).

Opinion

*686 OPINION AND ORDER DENYING CROSS MOTIONS FOR PARTIAL SUMMARY JUDGMENT ON COUNT I OF THE COMPLAINT, DENYING INNOVATION’S MOTION TO STRIKE, DENYING AXIS’s MOTION TO CONTINUE AND STAY BRIEFING, GRANTING THE MOTIONS FOR LEAVE TO FILE OVERSIZED BRIEFS, and REQUIRING AXIS TO RESPOND TO INNOVATION’S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO COUNT II OF THE COMPLAINT

BERNARD A. FRIEDMAN, Senior District Judge.

This matter is presently before the court on (1) the motion of plaintiff AXIS Insurance Company (“AXIS”) for partial summary judgment [docket entry 49]; (2) the motion of defendant Innovation Ventures, LLC (“Innovation”) for partial summary judgment on AXIS’s Count II [docket entry 52]; (3) Innovation’s motion for partial summary judgment on AXIS’s Count I [docket entry 53]; (4) AXIS’s motion to continue and stay briefing [docket entry 55]; (5) Innovation’s motion to strike the affidavit of Mary Schust [docket entry 58]; and three motions for leave to file briefs in excess of the pages limits allowed by the court’s local rules [docket entries 57, 60, 61]. Pursuant to E.D. Mich. LR 7.1(f)(2), the court shall decide these motions without oral argument. For the reasons stated below, the court shall deny the parties’ cross motions for partial summary judgment on Count I, deny Innovation’s motion to strike the Schust affidavit, deny AXIS’s motion to continue and stay briefing, grant the motions to file oversized briefs, and require AXIS to respond to Innovation’s motion for partial summary judgment as to Count II of the complaint.

This case concerns a dispute over insurance coverage. In April 2008 AXIS issued a one-year “multimedia liability” policy to Innovation covering “Damages and Claim Expenses” resulting from “an Occurrence in connection with Scheduled Media ... that gives rise to a Claim.” 1 The policy defines “damages” as “costs the Insured is legally obligated to pay because of liability imposed by law or Assumed Under Contract”; and “claim expenses,” essentially, as court costs and attorney fees. An “occurrence” is defined as “publication, broadcast or other dissemination of Matter,” “acts committed in the process of researching, investigating, gathering, acquiring, obtaining, preparing, compiling or producing Matter,” or “the licensing syndication, serialization, distribution, sale or lease of Matter,” “by or with the permission of the Insured.” “Matter,” in turn, is defined as “communicative or information content ... including content disseminated electronically and/or digitally ... (e.g. via websites, chat rooms, bulletin boards, databases and blogs).” “Scheduled Media” is defined in the policy declarations as “All Advertising performed by or on behalf of the Named Insured” and also “content of www.chaserplus.com and www.5 hourenergy.com.” Finally, “Claim” is defined as “any of the following against the Insured: 1. a demand or assertion of a legal right ...; 2. a suit seeking injunctive relief relating to the types of Claims specified in the Coverage Agreements; 3. any written request to toll or waive a statute of limitations relating to a potential Claim; 4. any arbitration or mediation proceeding; or 5. a written demand for a retraction or correction.” The policy identifies in detail *687 the types of claims which are covered 2 and those which are excluded from coverage. 3

*688 The policy took effect on April 26, 2008. Shortly thereafter, and during the policy period, Innovation filed a number of claims under the policy. 4 AXIS has declined coverage and, moreover, has returned the policy premium to Innovation. In the instant lawsuit, AXIS seeks rescission of the policy on the grounds that it is void ab initio due to material misrepresentations made by Innovation in the policy application (Count I). Alternatively, AXIS seeks to avoid coverage based on certain enumerated defenses (Count II).

Count I of the complaint focuses on Innovation’s answers to the following three questions on AXIS’s Multimedia Liability Coverage application:

I. GENERAL INFORMATION—

3.B. Geographic area in which applicant operates: __ Local _ Regional (multi-state) _ National _ International

V. CLAIM EXPERIENCE—

24.A. Have any claims, suits or proceedings been made during the past five years against the applicant or any of the applicant’s predecessors in business, subsidiaries or affiliates or against any of their past or present partners, owners, officers or employees? _Yes_No

If yes, provide complete details. Include type of claims, gist of offending matter, name of claimant, amount of defense costs, judgment or settlement, status or final disposition of the claim.

B. Is the applicant aware of any actual or alleged fact, circumstance, situation or error or omission arising out of the activities described in this application that may reasonably be expected to result in a claim being made against the applicant or any of the person[s] or entities described

in 24.A. above? _ Yes _ No

If yes, please explain and provide details:

Pl.’s Mot. for Partial Summ. J., Ex. B. On April 4, 2008, Innovation answered Question 3.B. by checking the “Regional (multistate)” box and indicating “MI, IN, SC, GA, TX.” Innovation answered Questions 24.A. and 24.B. by checking the “No” boxes. Id.

AXIS argues that these answers were misrepresentations. Regarding Question 3.B., AXIS argues that, in fact, Innovation does not operate in only the five states indicated, but rather nationally and also internationally. Regarding Question 24.A., AXIS argues that, in fact, a number of “claims, suits or proceedings” had been made against Innovation during the five years preceding submission of the application. And regarding Question 24.B., AXIS argues that, in fact, Innovation was aware *689 of circumstances (i.e., a brewing business dispute with a competitor) which reasonably could be expected to result in claims being asserted against it. AXIS further argues that these misrepresentations were material and entitle it to rescind the policy. Innovation takes the opposite position, arguing that its answers to these questions were neither misrepresentations nor material. Innovation has filed a counterclaim alleging that AXIS breached the insurance policy by denying coverage and, further, that it did so in bad faith.

AXIS’s Motion for Partial Summary Judgment [docket entry 49] and Innovation’s Motion for Partial Summary Judgment as to Count I [docket entry 53]

In these motions, each of the parties seeks summary judgment on AXIS’s claim that the policy is void ab initio due to Innovation having made material misrepresentations in its application. The parties largely agree on the legal standards applicable to this claim, but interpret the facts differently.

Under Fed.R.Civ.P.

Related

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477 U.S. 242 (Supreme Court, 1986)
Harley Vollrath v. Georgia-Pacific Corporation
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Terry Summers v. Simon Leis, Sheriff
368 F.3d 881 (Sixth Circuit, 2004)
Oade v. Jackson National Life Insurance
632 N.W.2d 126 (Michigan Supreme Court, 2001)
Egerer v. Woodland Realty, Inc.
556 F.3d 415 (Sixth Circuit, 2009)
Montgomery v. Fidelity & Guaranty Life Insurance
713 N.W.2d 801 (Michigan Court of Appeals, 2006)
Keys v. Pace
99 N.W.2d 547 (Michigan Supreme Court, 1959)
Runions v. Auto-Owners Insurance
495 N.W.2d 166 (Michigan Court of Appeals, 1992)
Kewin v. Massachusetts Mutual Life Insurance Company
295 N.W.2d 50 (Michigan Supreme Court, 1980)
Jimkoski v. State Farm Mutual Automobile Insurance
247 F. App'x 654 (Sixth Circuit, 2007)

Cite This Page — Counsel Stack

Bluebook (online)
737 F. Supp. 2d 685, 2010 U.S. Dist. LEXIS 78559, 2010 WL 3124160, Counsel Stack Legal Research, https://law.counselstack.com/opinion/axis-insurance-v-innovation-ventures-llc-mied-2010.