United States District Court, E.D. Michigan, Southern Division
NATIONWIDE PROPERTY & CASUALTY INSURANCE COMPANY, Plaintiff and Counter-Defendant,
JAMES BROWN, et al., Defendants and Counter-Plaintiffs.
OPINION AND ORDER GRANTING SUMMARY JUDGMENT AND
TERMINATING MOTION TO DISMISS AS MOOT
H. CLELAND UNITED STATES DISTRICT JUDGE.
an insurance dispute. Plaintiff Nationwide Property &
Casualty Insurance Company seeks declaratory relief holding
that the property insurance policy held by Defendant James
Brown is void and does not cover water damage sustained at
Defendants James and Tamara Brown's Detroit
home. (Dkt. # 19.) Defendants have
counterclaimed for breach of contract and seek appointment of
an umpire. (Dkt. # 23.)
the court are two motions filed by Plaintiff on January 27,
2017: a motion for summary judgment on all claims under
Federal Rule of Civil Procedure 56 (Dkt. # 33) and a motion
to dismiss under Federal Rule of Civil Procedure 37 (Dkt. #
34), asking the court to dismiss the counterclaims and enter
a default judgment against Defendants on the primary claims.
The motions are fully briefed and a hearing was held on April
17, 2017. Because the court will grant Plaintiff's motion
for summary judgment, it will terminate the Rule 37 motion as
following facts are undisputed unless otherwise noted. On
November 6, 2013, Defendant James Brown completed and an
application for insurance with Nationwide for the residential
property located at 13947 Bramell St., Detroit, Michigan.
(Dkt. # 33-2.) The application contained the following
I HAVE RECEIEVED AND READ A COPY OF THE “NATIONWIDE
INSURANCE PRIVACY STATEMENT”. [sic] BY SUBMITTING THIS
APPLICATION, I AM APPLYING FOR ISSUANCE OF A POLICY OF
INSURANCE AND, AT ITS EXPIRATION, FOR APPROPRIATE RENEWAL
POLICIES ISSUED BY NATIONWIDE INSURANCE COMPANY . . . . I
HEREBY DECLARE THAT THE FACTS STATED IN THE ABOVE APPLICATION
ARE TRUE AND REQUEST THE COMPANY TO ISSUE THE INSURANCE AND
ANY RENEWALS THEREOF IN RELIANCE THEREON.
(Dkt. # 33-2 (emphasis in original).) James signed under this
provision. (Id.) The same day, James also completed
and signed a Michigan Supplemental Application, which stated
that the supplemental application “becomes a part of
the application[.]” (Dkt. # 33-3.) The supplemental
application included a similar attestation provision,
I have read and understand all of the above questions. I
confirm that the facts stated in this supplemental
application are true and request the company to issue the
Insurance, and any renewals, based on these facts. I
understand that misrepresentation of information in the
supplemental application could void some or all of my
(Dkt. # 33-3, Pg. ID 671.) James signed under this provision
as well. (Id.)
supplemental application contained a series of questions
about the “covered residence” and the
“insured location, ” both referring to 13947
Bramell St. The first question asked, “Do you own the
covered residence and is this residence occupied by
you?” In response, James marked “yes.” He
also marked “yes” in response to question three,
which asked “Have you listed all owners of this
property on the application?” To question six, which
asked, “Are the property taxes, for the insured
location, delinquent by two or more years?” James
responded “no.” Finally, question seven asked,
“Are any business operations being conducted from the
insured location?” and left a space for the applicant
to describe the type of business. James checked
“no” and left this space blank. (Dkt. # 33-3, Pg.
on his application, Nationwide issued James a standard
homeowners' insurance policy, Policy No. 91 21 HP 345848,
for the property at 13947 Bramell. (Dkt. # 33-4.) The policy
period ran from October 30, 2013, to October 30, 2014.
policy is amended by a Michigan Amendatory Endorsement (Dkt.
# 33-5), which contains a concealment, fraud, or
misrepresentation provision. The provision states:
2. Concealment, fraud, or misrepresentation
a) this policy was issued or renewed in reliance with the
information you provided at the time of your application for
or renewal of this insurance coverage. We may void this
policy, deny coverage under this policy, or at our election,
assert any other remedy available under applicable law, if
you, or any other insured person seeking coverage under this
policy, knowingly or unknowingly concealed, misrepresented or
omitted any material fact or engaged in fraudulent conduct at
the time the application was made or at any time during the
b) we may void this policy, deny coverage for a loss, or at
our election, assert any other remedy available under
applicable law, if any insured person or any other person
seeking coverage under this policy has knowingly or
unknowingly concealed or misrepresented any material fact or
engaged in fraudulent conduct in connection with the filing
or settlement of any claim.
c) if we void this policy, you must reimburse us if a claim
payment was made
d) no person or organization who engaged in fraudulent
conduct in connection with the applicable process or filing a
claim, or engages in any material misrepresentation regarding
the issuance or renewal of this policy shall be entitled to
receive any payment under this policy at any time.
(Id. at Pg. ID 714 (emphases removed).) The
amendatory endorsement also includes a provision requiring
that the insured notify Nationwide of changes in
circumstances, stating: “you have a
duty to notify us as soon as possible of any
change which may affect the premium risk under the policy.
This may include, but is not limited to, changes . . . (2) in
the occupancy or use of the residence
premises.” (Dkt. # 33-5, Pg. ID 713 (emphases
policy contains several coverage exclusions. In particular,
the policy contains an exclusion for neglect that bars
coverage of losses caused by neglect even if other covered
perils also contributed to the loss. The neglect exclusion
1. We do not cover loss to any property
resulting directly or indirectly from any of the following.
Such a loss is excluded even if another peril or event
contributed concurrently or in any sequence to cause the
. . . c. neglect, meaning neglect of the
insured to use all reasonable means to save
and preserve property at the time of and after a loss, or
when property is endangered by a covered peril.
(Dkt. # 33-6, Pg. ID 715 (emphases in original).)
policy also contains conditions precedent to coverage in the
form of duties that must be met by the insured after a loss.
The relevant section of the policy, as amended by the
3. Your duties after loss. In case of loss, you must:
a) give immediate notice to us or our agent. . . .
b) protect the property from further damage. You must make
repairs required to protect the property and keep a record of
c) as often as we reasonably require:
(1) show us the damaged property; and
(2) provide records and documents we request and permit us to
(3) submit to examinations under oath and sign same. At your
or our request, the exams will be conducted separately and
not in the presence of any other persons except legal
e) assist us with any claim or suit . . . .
(Dkt. # 33-7, Pg. ID 720; Dkt. # 33-5, Pg. ID 713.) The
policy also contains a provision stating “No action can
be brought against us unless there has been
full compliance with the policy provisions. Any action must
be started within one year after ...