United States District Court, W.D. Michigan, Southern Division
JANET T. NEFF, Judge
a diversity action for breach of contract brought by
Plaintiff Allied Mechanical Services, Inc.
(“Allied”) against Defendant National Fire and
Marine Insurance Company (“NFMIC”). Allied sues
NFMIC for breach of an insurance contract. Count I of the
complaint seeks an order compelling NFMIC to participate in
the appraisal process described in the contract. NFMIC has
filed a counterclaim alleging that appraisal is premature,
and asking the Court to find that a particular clause in the
insurance contract applies to the appraisal process. (ECF No.
4, Page ID.84.) Before the Court are motions for summary
judgment filed by the parties. (ECF Nos. 13, 15.) For the
reasons discussed herein, Allied's motion will be granted
and NFMIC's motion will be denied.
of the Federal Rules of Civil Procedure requires the Court to
grant summary judgment “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). In evaluating a motion for summary
judgment the Court must look beyond the pleadings and assess
the proof to determine whether there is a genuine need for
trial. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986). “[T]he district
court must construe the evidence and draw all reasonable
inferences in favor of the nonmoving party.” Martin
v. Cincinnati Gas & Elec. Co., 561 F.3d 439, 443
(6th Cir. 2009). The proper inquiry is whether the evidence
is such that a reasonable jury could return a verdict for the
non-moving party. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 252 (1986); see generally Street v. J.C.
Bradford & Co., 886 F.2d 1472, 1476-80 (6th Cir.
issued Allied an insurance policy (the “Policy”)
covering a vacant building located at 2211 Miller Road,
Kalamazoo, Michigan. The building was destroyed in a fire.
The Policy provides that NFMIC will pay the “actual
cash value” for damaged or lost property, which is
defined as follows in paragraph E.6:
d. Actual Cash Value . . .
(1) when damage to property is economically repairable,
“actual cash value” means the cost of repairing
the damage, less reasonable deduction for wear and tear,
deterioration, and obsolescence;
(2) when the loss or damage to property creates a total loss,
actual cash value means the market value of the property in a
condition equal to that of the destroyed property, if
reasonably available on the used market or
(3) otherwise actual cash value means the market value of new
property of like kind and quality, less reasonable reduction
for wear and tear, deterioration, and obsolescence.
(Policy, ECF No. 12-1, PageID.136.) The parties agree that
paragraph (1) does not apply because the damage to
Allied's property created a “total loss.”
However, the parties disagree about whether paragraph (2) or
paragraph (3) applies.
Allied submitted a claim for coverage, NFMIC hired an
appraiser who determined that the market value of the
property was $279, 000. The appraiser determined this value
by comparing the property to “actual sales of similar
properties, ” and then making adjustments based on
“time, location, physical characteristics, and any
other factors affecting value[.]” (Brown Letter, ECF
12-4, PageID.208.) After further research, the appraiser also
determined that other properties “in a condition
equal” to the destroyed property were available for
sale on April 6, 2015, the date of Allied's loss. (Brown
Aff. ¶¶ 10-11, ECF No. 16-1, PageID.371-72.)
disagreed with NFMIC's valuation of the property. It
maintained that there were no properties “in a
condition equal to that of the destroyed property . . .
reasonably available on the used market, ” so it relied
on paragraph (3), and came up with an actual cash value of
approximately $598, 000. (Ex. A to Pl's Sworn Statement
in Proof of Loss, ECF No. 12-7, PageID.231.) Because of its
disagreement with NFMIC, Allied submitted a demand for
appraisal under the Policy, which states:
If we and you disagree on the value of the property or the
amount of loss, either may make written demand for an
appraisal of the loss. In this event, each party will select
a competent and impartial appraiser. The two appraisers will
select a competent and impartial umpire. If they cannot agree
either may request that selection be made by a judge of a
court having jurisdiction. The appraisers will state
separately the value of the property and amount of loss. If
they fail to ...