United States District Court, E.D. Michigan, Southern Division
K. Majzoub Mag. Judge
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
E. LEVY United States District Judge
March 26, 2018, defendants Seattle Specialty Insurance
Services, Inc. and Underwriters at Lloyd's, London timely
removed this case from Macomb County Circuit Court. (Dkt. 1.)
On April 2, 2018, defendants filed a motion to dismiss this
case. (Dkt. 3.) Plaintiff Chalfonte Properties, Inc. has not
responded to the motion.
reasons set forth below, this case will be dismissed, as it
is time barred by the plain language of the contract between
August 27, 2014, plaintiff entered into a residential and
commercial property insurance contract with defendants. (Dkt.
1-2 at 5, 9-32.) The contract insured the subject property
from September 8, 2014, to September 8, 2015. (Id.
at 5.) On March 9, 2014, theft and vandalism occurred at one
of the insured properties. (Id.) On August 22, 2014,
plaintiff filed a claim for damages related to the theft and
vandalism, as well as a long-term leak in the plumbing.
(Id. at 6.) On January 21, 2016, defendants issued a
check to plaintiff in the amount of $20, 397.04.
contract states in a section entitled “Suit Against
Us” that “[n]o action shall be brought unless
there has been compliance with the Certificate provisions and
the action is started within one year after the loss.”
(Id. at 27.) On February 9, 2018, plaintiff filed
suit in Macomb County Circuit Court, asserting a single claim
for breach of contract. (Dkt. 1-2.) Plaintiff alleges that
defendants breached the insurance contract by failing to pay
the actual cash value of its losses, which totaled more than
$20, 397.04. (Id. at 6.) On March 26, 2018,
defendants timely removed this case to federal court. (Dkt.
pending is defendants' motion to dismiss. (Dkt. 3.) The
Court determines that oral argument is not necessary. E.D.
Mich. Local R. 7.1(f)(2).
deciding a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the
Court must “construe the complaint in the light most
favorable to the plaintiff and accept all allegations as
true.” Keys v. Humana, Inc., 684 F.3d 605, 608
(6th Cir. 2012). “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). A plausible claim need not contain “detailed
factual allegations, ” but it must contain more than
“labels and conclusions” or “a formulaic
recitation of the elements of a cause of action[.]”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
Michigan law, parties may contract around the six-year period
of limitations applicable to breach of contract claims.
See Wineman v. Durkee Lakes Hunting & Fishing Club,
Inc., 352 F.Supp.2d 815, 820 (E.D. Mich. 2005)
(collecting cases). “[A]n unambiguous contractual
provision providing for a shortened period of limitations is
to be enforced as written unless the provision would violate
law or public policy.” Rory v. Continental Ins.
Co., 473 Mich. 457, 470 (2005). “Michigan has no
general policy or statutory enactment which would prohibit
private parties from contracting for shorter limitations
periods than those specified by general statutes.”
Id. at 471. Express limitations periods in optional
insurance contracts such as the one at issue here are
enforceable, and the filing of a claim does not automatically
toll the limitations period. McDonald v. Farm Bureau Ins.
Co., 480 Mich. 191, 200-01 (2008).
plaintiff experienced a loss on March 19, 2014. The claim was
submitted on August 22, 2014, and the claim was paid on
January 21, 2016. The insurance contract required plaintiff
to file suit within one year after the loss. Suit was filed
on February 5, 2018.
the unambiguous terms of the contract, plaintiff was required
to file suit on March 19, 2015, regarding defendants'
breach of contract. However, plaintiff could not have filed
suit regarding underpayment of a claim nearly a year before
the claim was paid. There may be a colorable public policy
argument that plaintiff should not be made to abide by a
contractual period of limitations that would require it to
file suit before it had a cause of action (although plaintiff
could have asserted a claim for non-payment rather than
underpayment). However, the provision would be enforceable
even if the Court ...