United States District Court, E.D. Michigan, Northern Division
ORDER GRANTING DECLARATORY JUDGMENT IN PART,
DISMISSING THE REMAINDER OF DECLARATORY JUDGMENT, GRANTING
MOTION TO DISMISS IN PART, AND DIRECTING IMPLEMENTATION OF
THE APPRAISAL PROVISION OF THE POLICY
L. LUDINGTON UNITED STATES DISTRICT JUDGE
10, 2019, Plaintiff Scottsdale Insurance Company
(“Scottsdale”) filed a complaint against
Defendant Altman Management Company (“Altman”).
ECF No. 1. The complaint seeks a declaratory judgment
addressing a policy of commercial insurance issued by
Scottsdale to Altman, its insured. Id. at PageID.2.
More specifically, Scottsdale seeks a judicial determination
that Altman's period of recovery under the policy is a
legal question for the Court and thus not to be determined by
an appraiser under the policy. Id. at PageID.7.
8, 2019, Altman filed a Motion to Dismiss the Complaint. ECF
No. 4 at PageID.98. For the following reasons, the motion
will be granted in part and denied in part.
Management Company is a Florida corporation and manager of an
apartment complex located at 1010 Eastlawn Drive, Midland,
Michigan, 48642 (“Building”). ECF No. 1 at
PageID.1. Altman purchased a commercial property insurance
policy for excess coverage from Scottsdale effective February
1, 2017 to February 1, 2018 (“Policy”).
Id. at PageID.2.
Policy provided coverage for business interruptions. It
11. Business Interruption
A. Gross Earnings
1. Loss due to the necessary interruption of business
conducted by the Insured, whether total or partial, including
all interdependencies between or among companies owned or
operated by the Insured, resulting from physical loss or
damage insured herein and occurring during the term of this
policy to real and/or personal property insured herein.
Id. at PageID.52.
policy also provides for coverage for Altman's loss of
rental value or rental income, providing as follows:
14. Rental Value and Rental Income
1. This policy provides coverage for Loss of Rental Income
and/or Loss of Rental Value of the Insured caused by physical
loss or damage insured herein occurring during the term of
this policy to property and/or premises rented, leased or
occupied by the Insured and/or rented or leased by the
Insured to others.
2. Rental Income shall include the following:
(a) The total anticipated gross rental income from tenant(s)
of the Insured's building(s) and structure(s), and
(b) The amount of all charges assumed by tenant(s) except
those charges which do not continue, which would otherwise be
obligations of the Insured, and
(c) The fair rental for that portion occupied by the Insured.
5. Period of Recovery: the length of time for which a loss
may be claimed under this provisions shall be in accordance
with the loss provisions applicable under the Period of
Recovery clause [sic]
Id. at PageID.55-56.
Policy limited Altman's Period of Recovery for a claim,
providing as follows:
16. Loss Provisions Applicable to Business Interruption -
Gross Earnings, Extra Expense, Rental Value)
A. Period of Recovery
The length of time for which a loss be claimed is referred to
as the period of recovery and:
1. shall commence with the date of such loss or damage and
shall not be limited by the date of expiration of this
2. shall not exceed such length of time as would be required
with the exercise of due diligence and dispatch to rebuild,
repair, or replace the property that has been destroyed or
3. such additional length of time to restore the
Insured's business to the condition that would have
existed had no loss occurred, commencing with ...