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155811 - Song Yu Farm Bureau General Ins Co

Song Yu and Sang Chung,

 

John L. Noud

 

Plaintiffs-Appellees,

 

v

(Appeal from Ct of Appeals)

 

 

(Ingham – Jamo, J.)

 

Farm Bureau General Insurance Company of Michigan,

 

Kimberly A. Hillock

 

Defendant-Appellant.

 

Summary

Plaintiffs are a married couple who purchased a homeowner’s policy to insure property that initially was their full-time residence. They later moved to another residence and treated the insured property as a vacation home. After making a claim under the policy for water damage, one of the plaintiffs informed defendant’s adjuster that they were in the process of moving. Defendant paid the water damage claim, but it did not follow up to determine whether plaintiffs had completed their move. In December 2013, soon after the policy had automatically renewed, defendant terminated the policy effective January 18, 2014, because the property was no longer plaintiffs’ “residence premises” covered under the policy. However, before plaintiffs received notice of the termination, the property incurred more water damage. Plaintiffs made a new claim for coverage, which defendant denied. Plaintiffs filed this lawsuit against defendant, alleging breach of contract and asserting that defendant should be equitably estopped from denying coverage in light of defendant’s payment on the earlier water damage claim and automatic renewal of the policy, which led plaintiffs to believe that they had coverage. The trial court granted judgment in favor of defendant. In an unpublished opinion, the Court of Appeals reversed, holding that defendant is equitably estopped from denying coverage. One judge dissented. The Supreme Court has granted leave to appeal to address whether the plain language of the insurance policy precluded coverage, and, if so, whether and under what circumstances the doctrine of equitable estoppel may be applied to require an insurer to expand coverage that is contrary to the express terms of an insurance contract and the elements of an estoppel claim.​