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Esurance Insurance Co. v. Maxie

United States District Court, E.D. Michigan, Southern Division

November 8, 2017

LAMARR MAXIE, Defendant.


          GERSHWIN A. DRAIN United States District Judge


         Plaintiff Esurance Insurance Company filed this declaratory judgment action on August 2, 2017. Presently before the Court is Defendant Lamarr Maxie's Motion to Dismiss, filed on August 23, 2017. This matter is fully briefed[1] and a hearing was held on November 7, 2017. For the reasons that follow, the Court will GRANT Defendant's Motion to Dismiss.


         The instant dispute stems from Plaintiff's issuance of a homeowners insurance policy to Defendant, which insured his interest in residential premises located at 7288 Canterbury Drive in Romulus, Michigan, as well as the personal property contained therein. The property is secured by a mortgage and note in favor of Seterus Inc. in the amount $260, 000.00. Seterus Inc.'s interest in the subject property is also insured under the standard mortgage clause of the subject policy.

         On April 14, 2016, a fire occurred at the Canterbury premises causing damage to the home and the personal property therein. Defendant notified Plaintiff of the fire and his intent to submit a claim under the subject policy for his losses. He filed a “Sworn Statement in Proof of Loss” on June 2, 2016. Thereafter, Plaintiff commenced an investigation into the circumstances of the fire. In the interim, Plaintiff paid $9, 275.48 in payments for Defendant's additional living expenses as a result of the fire.

         Plaintiff asserts that its investigation uncovered facts which render the subject policy void ab initio. Plaintiff maintains that Defendant's primary residence was not the home on Canterbury Street on the date of the fire. Rather, an individual by the name of Brian Glenn resided at the premises pursuant to a rental agreement with Defendant. Plaintiff argues that it would not have issued the subject policy of insurance had it known Defendant was not going to primarily reside in the home.

         Additionally, Plaintiff alleges that Defendant has intentionally and fraudulently concealed and misrepresented material facts, as well as failed to cooperate during its investigation of his claim.

         Plaintiff ultimately denied Defendant's claim arising from the April 14, 2016 fire based on the results of its investigation and Defendant's purported obstructionist behavior.

         On December 19, 2016, Defendant filed a breach of contract action against Plaintiff in the Wayne County Circuit Court. On January 20, 2017, Plaintiff filed its Answer and Affirmative Defenses in the state court action. Plaintiff's affirmative defenses assert that the subject policy is void because Defendant failed to comply with the policy's terms and conditions, has intentionally concealed and misrepresented material facts relative to the application for insurance as to his primary residence, as well as relative to the loss and his claims and has failed to cooperate. Plaintiff reserved the right to amend or supplement its answer at the conclusion of discovery. Discovery has just been completed as of October 30, 2017, and the state court action is set to go to trial in March of 2018.

         In the action before this Court, Plaintiff requests the Court declare that the subject policy is void ab initio and that Defendant is precluded from recovering any sums for loss and damage stemming from the April 14, 2016 fire. Plaintiff also requests reimbursement for the $9, 275.48 in payments made to Defendant.

         Lastly, Plaintiff requests the Court declare that if it owes any liability to Seturus Inc. under the subject policy, Plaintiff is then subrogated to the rights of Seterus Inc. against any person responsible for the fire, including Brian Glenn and Defendant, and/or that Plaintiff may be entitled to an assignment of the mortgage and note.

         III. LAW & ANALYSIS

         Defendant asserts that this Court lacks jurisdiction over this matter, thus Rule 12(b)(1) requires its dismissal, however Defendant's argument is without merit. The Declaratory Judgment Act “provides courts with discretion to fashion a remedy in cases where federal jurisdiction already exists, ” therefore this Court must possess an independent basis for subject matter jurisdiction. One Beacon Ins. Co. v. Chiusolo, 295 F. App'x 771, 775 (6th Cir. 2008). Here, Plaintiff's Complaint sets forth the basis for this Court's ...

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