United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING MOTIONS TO DISMISS [16,
Honorable Laurie J. Michelson, Judge
the terms of its insurance policy, Klas Apartments, LLC had
two years from the date its apartment complex sustained storm
damage to sue its insurer, Chubb Custom Insurance Company,
for not paying for the damage. But Klas waited two years and
a month to file suit. So, as will be explained in detail
below, Klas sued Chubb for breaching the insurance policy too
has also sued the company that Chubb retained to assess the
damage to the apartment complex, York Risk Services Group,
Inc. Klas says York misrepresented the amount of damage to
the complex (it was far greater than York said it was) which
resulted in Chubb not paying all of Klas' claim. But Klas
has not pled that it took any actions in reliance on
York's alleged undervaluation, so Klas' claim against
York will also be dismissed.
Chubb and York say they should be dismissed even if Klas'
allegations are true, the Court presents Klas'
allegations as fact. See Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009).
Arms is an apartment complex located in Monroe, Michigan.
(PageID.13.) Its 108 apartments are spread across three
buildings. (PageID.13.) A fourth building houses the
complex's management office, community room, and laundry.
2014, Chubb Custom Insurance Company (Chubb) issued a
one-year insurance policy to Klas Apartments, LLC (Klas),
which, apparently, owns or operates the Charlotte Arms
apartments. (To be more accurate, the policy was first issued
to Charlotte Arms, LLC but the named insured was changed to
Klas Apartments, LLC effective the date the policy was
issued. (PageID.514.)) Under the policy, in exchange for a
$14, 000 premium, Chubb would pay Klas “for direct
physical loss of or damage” to the Charlotte Arms
apartment complex “caused by or resulting from any
Covered Cause of Loss.” (PageID.455.)
11, 2015, a summer hailstorm swept through Monroe.
(PageID.12.) “Doppler radar detected that
‘half-dollar' size hail was spotted in and around
Monroe” with some people reporting “hail
measuring two . . . inches, or more.” (PageID.12.) The
storm caused substantial damage to the Charlotte Arms
how substantial is the subject of considerable debate.
September 2015, Klas obtained an estimate from Precise
Construction and Remodeling. (PageID.13.) Precise thought
Charlotte Arms had sustained about $328, 000 in damage.
(PageID.13.) Klas submitted a claim to Chubb, apparently
relying on Precise's estimate. (PageID.13.)
selected York Risk Services Group to be the adjuster on
Klas' claim. (PageID.21.) In October 2015, York submitted
an estimate to Chubb. (PageID.13.) Apparently, York thought
the Precise estimate was anything but that. After factoring
in depreciation (Charlotte Arms was built in the 1970s), York
estimated the loss at about $225, 000. (PageID.13.)
December 2015, Chubb elected to pay the
“undisputed” amount of the loss, $200, 154.55 to
be precise. (PageID.14; see also PageID.17-18.)
January 2016, Klas retained Odawa Development, LLC (and
Design Pinnacle Group, LLC) to do “a thorough
inspection” of Charlotte Arms. (PageID.14.) Odawa found
that siding had been damaged and that there were “dents
and holes from the hail . . . visible throughout.”
(PageID.14.) Odawa also found that there were holes in roof
decks (the part underneath the shingles), that water had
leaked through those holes into attics, and that “all
of the attic spaces contained significant mold growth as a
result.” (PageID.15.) In ...