United States District Court, E.D. Michigan, Southern Division
ORDER DENYING DEFENDANT'S MOTION TO DISMISS [DOC.
CARAM STEEH, UNITED STATES DISTRICT JUDGE.
a first-party property insurance dispute in which plaintiff
ID Ventures alleges that defendant Chubb Custom Insurance
Company (“Chubb”) breached the Commercial
Property Insurance Policy it issued by failing to pay a claim
for damage to the plumbing in an apartment building owned and
operated by ID Ventures and covered under the subject
insurance policy. Plaintiff filed its complaint in state
court on November 3, 2017, asserting two causes of action,
one for breach of contract and the other asking the court to
declare the respective rights and obligations of the parties
under the insurance policy. Defendant removed the case,
invoking this court's diversity jurisdiction. The matter
is before the court on defendant's motion to dismiss
pursuant to Fed.R.Civ.P. 12(b)(6). Defendant argues that both
of plaintiff's causes of actions are time-barred, along
with its assertion that penalty interest should be imposed
under Michigan's Uniform Trade Practices Act, M.C.L.
§ 500.2006. Oral argument on the motion was held April
owns and operates an apartment building located at 1141
Holcomb Street in Detroit, Michigan (“Subject
Property”). Plaintiff obtained insurance for the
Subject Property through Charles Walker & Associates
(“Walker”) in Southfield, Michigan. Walker
procured an insurance policy with Chubb (“Subject
Policy”) and plaintiff made payments directly to
Walker. Walker did not provide plaintiff with a policy number
or the actual insurance policy. Walker is not a party to this
lawsuit, but plaintiff indicates it may seek to amend to add
January 8, 2015, Detroit Water and Sewerage Department
(“DWSD”) repaired a water main break on Holcomb
Street immediately outside the Subject Property. Before the
repair, the monthly bill for water and sewer services at the
Subject Property averaged $1, 500 to $2, 000. Following the
repair, the monthly invoice increased exponentially: on
January 15, 2015, the monthly bill was for $13, 380.51; on
February 15, 2015, the bill was for $55, 005.33; and on March
14, 2015, the bill was for $39, 773.26. Plaintiff determined
that the typical number of units of water consumed in a month
before the repair was 100-200, with the highest amount in
five years being 514 units. Since the fix done by DWSD,
monthly usage was in excess of 8, 000 units.
plaintiff determined that stones, sand and other debris used
by DWSD to repair the water main break had flowed into the
pipes and plumbing at the Subject Property. Plaintiff alleges
that it was foreseeable by DWSD that “these materials
would enter and infiltrate the plumbing system of the Subject
Property, ” constituting negligence by DWSW “and
for which actions Plaintiff has sustained damages.”
(Complaint ¶14). In order to fix the problem, plaintiff
had the plumbing cleaned out and replaced the Sloan flush
valves. Plaintiff also pursued an administrative appeal of
the water bills through DWSD.
engaged in discussions with Walker to obtain a copy of the
insurance policy and to file a claim with Chubb. Plaintiff
asserts that after a lengthy delay, Walker ultimately
produced the policy and filed a claim which was denied.
(Complaint ¶¶ 20, 21). Plaintiff does not dispute
that it had a copy of the policy on November 16, 2016. The
claim is dated December 21, 2016 and it identifies the date
of loss as January 8, 2015. (Property Loss Notice, attached
to Complaint). A synopsis accompanying the claim describes
the damages caused by the manner in which DWSW undertook to
repair the water main.
Policy contains a two-year limitations on actions provision:
D. LEGAL ACTION AGAINST US
No one may bring a legal action against us under this
Coverage Part unless:
1. There has been full compliance with all of the terms of
this Coverage Part; and
2. The action is brought within 2 years after the date on
which the direct physical loss or damage occurred.
water main repair occurred on January 8, 2015. Plaintiff
maintains that damage to its plumbing and water fixtures
“commenced on January 8, 2015 and continued on through
and including the present.” (Complaint ¶ 16).
Plaintiff submits a plumbing proposal for $94, 360.00, dated
September 20, 2016, to support its position that damage was
still being done to the plumbing on that date. Plaintiff also
asserts that its obligation to pay the water bill did not
occur until his appeal became final on April 12, 2016.
filed its action against defendant on November 3, 2017
alleging breach of contract and declaratory relief. Defendant
asserts that the contractual limitations period for filing
lawsuits expired on January 8, 2017. Plaintiff maintains that
its lawsuit is not barred because the limitations period is
tolled while its claim is ...