Michigan Millers Mutual Insurance v. Lancer Insurance

23 F. Supp. 3d 850, 2014 U.S. Dist. LEXIS 73513, 2014 WL 2440268
CourtDistrict Court, E.D. Michigan
DecidedMay 30, 2014
DocketCase No. 13-12892
StatusPublished
Cited by3 cases

This text of 23 F. Supp. 3d 850 (Michigan Millers Mutual Insurance v. Lancer Insurance) 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
Michigan Millers Mutual Insurance v. Lancer Insurance, 23 F. Supp. 3d 850, 2014 U.S. Dist. LEXIS 73513, 2014 WL 2440268 (E.D. Mich. 2014).

Opinion

OPINION AND ORDER

PATRICK J. DUGGAN, District Judge.

This case involves an insurance coverage dispute between Plaintiff Michigan Millers Mutual Insurance Company and Defendant Lancer Insurance Company in connection with a vehicle fire éausing property damage. On December 29, 2012, a fire originated in the engine compartment of a motor vehicle covered by a no fault insurance policy issued by Lancer. The fire occurred while the vehicle, a white limousine, was parked inside of commercial space owned by a Michigan Millers’ insured and leased by a Lancer insured. The property sustained smoke and water damage from the fire. After the fire and the subsequent submission of an insurance claim by its insured, Michigan Millers paid for the property damage. Michigan Millers then instituted this suit as subrogee of its insured, seeking to recover property protection benefits from Lancer pursuant to provisions of Michigan’s No Fault Act, specifically, Michigan Compiled Laws § 500.3121 and § 500.3125.

The matter is presently before the Court on the parties’ cross motions for summary judgment filed pursuant to Federal Rule of Civil Procedure 56. Each motion has been fully briefed and the Court held oral argument on May 8, 2014. For the reasons stated herein, the Court grants Michigan Millers’ Motion for Summary Judgment in part and denies Lancer’s Motion for Summary Judgment on the issue of liability. Because the amount of damages has not been adequately proven, the Court denies Michigan Millers’ Motion for Summary Judgment on the issue of damages and will schedule a hearing to determine the amount of damages Lancer must remit to Michigan Millers.

I. FACTUAL AND PROCEDURAL BACKGROUND

Avon Star/59 Avon LLC owns commercial property located at 2231-2245 Star [852]*852Court in Rochester Hills, Michigan. This property consists of a single-story structure covering 20,000 square feet, and, at the time of the events giving rise to this action, this property had multiple tenants. Michigan Millers issued Avon a commercial insurance policy for property and liability coverage for the entire structure. (Policy, PL’s Reply Ex. 11.)

Pete’s Limousine, Inc. and Metro Party Bus jointly leased the unit with the address of 2239-2241 Star Court. (Lease, PL’s Mot. Ex. 2.) The leased space included an office area and a large garage for vehicle storage. Sometime before 11:10 AM on December 29, 2012, a fire broke out in the garage area. (Murray Dep. 11, Def.’s Mot. Ex. 2 (testifying at deposition that the fire department received notice of the fire at 11:10 AM).) Several vehicles were parked therein. (Fire Dep’t Report, PL’s Mot. Ex. 3.) Among those vehicles was a white 1996 Lincoln Towncar limousine owned by Pete’s Limousine and insured pursuant to a no fault policy issued by Lancer. (Lazareanu Aff. ¶ 2, Def.’s Mot. Ex. 1; Certificate of Ins., PL’s Mot. Ex. 4.) By all accounts, the fire originated in the engine compartment of this limousine. (See, e.g., Murray Dep. 21-22, 23, 24, 35, Def.’s Mot. Ex. 2; Fire Dep’t Report 9, PL’s Mot. Ex. 3.) The limousine’s owner replaced the vehicle’s battery “approximately two weeks prior to December 29, 2012.” (Lazareanu Aff. ¶ 6, Def.’s Mot. Ex. 1.) However, no problems occurred during the battery installation and the vehicle’s owner asserts that “there was no problem with the ... operation of the” limousine between the time the battery was installed and the date of the fire. (Id.)

The Rochester Hills Fire Department responded to the fire. Lieutenant Jason Murray, the incident commander on the scene, testified during his deposition that by using a thermal imaging camera, he was able to observe the fire in the engine compartment and could see the fire spreading from the engine compartment into the passenger compartment. (Murray Dep. 23, Def.’s Mot. Ex. 2.) Based on this observation, as well as the fact that the fire itself was confined to the engine and passenger compartments of the limousine, Lieutenant Murray testified that “it was very obvious that the fire had originated from the area of the engine compartment.” (Id. at 18, 21-22, 35.) Lieutenant Murray has never been certified for arson or fire investigation. (Id. at 36.)

Lieutenant Murray testified that the fire chief, who was also at the scene, made the call not to conduct further formal investigation into the fire by calling in arson investigators. (Id. at 9.) He explained that “because of the damage we were unable to tell what caused the fire itself, but as far as where it was confined to and the origin of the fire[, it] was pretty cut and dry in our minds so we didn’t think we needed an inspector to come out and to investigate to determine any more than that.” (Id.)

Subsequently, Michigan Millers (Avon’s property insurer) and Lancer (Pete’s Limousine’s no fault insurer) jointly hired Gery Victor, a certified fire investigator from EFI Global, to conduct a fire origin and cause investigation. (Victor Aff. ¶¶ 8-9, PL’s Mot. Ex. 6.) In conducting the investigation, Mr. Victor inspected the vehicle (which had been towed elsewhere), spoke with the owner of Pete’s Limousine and with Lieutenant Murray, and viewed surveillance footage of the garage space captured by video cameras located therein. (Id. at ¶ 17.) Upon completion of the investigation, Mr. Victor produced a Fire Investigation Report. This report states that “[t]he cause of this fire is undetermined.” (Fire Investigation Report 8, [853]*853Pl.’s Mot. Ex. 7.) However, the report explains:

Fire pattern analysis indicates that the fire originated in the engine compartment of the vehicle. Evidence indicates ignition result from an undetermined electrical failure. Evidence indicated first fuel ignited consisted of undetermined combustibles. Events bringing ignition and fuel together include combustible too close to heat source.

(Id.) A surveillance camera located inside of the garage area corroborated the fire’s origin. (Id. at 7 (explaining images from video footage and indicating that “The video displayed the reflection of a fire developing slowly under the hood. The video initially showed light smoke, then concentrated smoke at the driver’s side rear corner of the hood.... ”).)

■ Although the fire was mostly confined to the white limousine, the rest of the building, including an adjacent unit, sustained smoke and water damage. (Id. at 8; Murray Dep. 24, Def.’s Mot. Ex. 2.) Ultimately, Michigan Millers paid out in excess of $200,000 to its insured, Avon, for the losses occasioned by the fire.1 Thereafter, Michigan Millers filed the instant subrogation action against Lancer in the Circuit Court for the County of Oakland, Michigan.2 (Compl. attach. Notice of Removal, ECF No. 1.)

On July 2, 2013, Lancer removed the action to this Court on the basis of diversity jurisdiction. 28 U.S.C. §§ 1332, 1441, 1446. On December 19, 2013, after engaging in discovery, Michigan Millers filed a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. (ECF No. 8.) Lancer responded to the motion on January 9, 2014, (ECF No. 10), and Michigan Millers replied on January 23, 2014, (ECF No. 11).

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23 F. Supp. 3d 850, 2014 U.S. Dist. LEXIS 73513, 2014 WL 2440268, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michigan-millers-mutual-insurance-v-lancer-insurance-mied-2014.