Commercial property insurance policy coverage dispute; Whether the policy language was ambiguous; Distinguishing Westfield Ins Co v Enterprise 522, LLC (ED MI); Whether the policy’s Protective Safeguards Endorsement (PSE) prevented defendant-insurer from denying coverage when it had notice plaintiff-insured did not have an automatic extinguishing system (AES); Equitable estoppel; Distinguishing Gordon v St Paul Fire & Marine Ins Co; Whether the policy should be reformed due to mutual mistake; Wolf v Mahar; Whether a genuine issue of material fact existed as to the sufficiency of plaintiff’s existing fire prevention equipment under the policy

The court held that the commercial property insurance policy at issue was not ambiguous on the basis it did not define an AES. Further, defendant-insurer was not precluded from denying coverage because it had notice there was no AES on the property and based on equitable estoppel. The court also rejected plaintiff-insured’s claim that the policy should be reformed due to mutual mistake, and concluded there was no genuine issue of material fact as to “whether plaintiff’s fire prevention equipment was sufficient to satisfy the requirements of the” policy’s PSE. Thus, it affirmed summary disposition for defendant. Defendant denied plaintiff’s claim after a fire because the property did not have an ASE. Plaintiff sued for breach of contract and the equitable relief of policy reformation. On appeal, it contended the policy language was ambiguous and “should be construed against defendant and in favor of coverage because an AES is not defined in the PSE.” The court disagreed, noting the “PSE refers to a P-9 system as ‘the protective system described in the Schedule,’ and the schedule itself refers to the P-9 as an AES. Additionally, § A(2) of the PSE provides a definition of an ‘automatic sprinkler system[.]’” As to plaintiff’s reliance on Westfield, the court found that case factually distinguishable. There, “the exclusion did not actually list a required protective device or service in the schedule, despite directing its insured to ‘maintain the protective devices or services listed in the schedule above.’ In this case, the PSE clearly indicates that plaintiff was required to maintain a ‘P-9’ system as a condition of insurance, and . . . defines both a P-9 and an AES with sufficient clarity to avoid confusion—at least in this case, in which it is undisputed that plaintiff did not have any sort of automatic sprinkler or fire extinguishing device in place.” As to plaintiff’s notice argument, its reliance on PSE § B(1) was misplaced. Defendant did not rely on § B(1) in denying coverage – it did so “under § A(1), which expressly provides that the presence of an AES on the property is a ‘condition of this insurance.’” As to equitable estoppel, the case on which plaintiff relied, Gordon, did not help it. And there was “no evidence of a mutually shared factual mistake by the parties regarding the impact of not having an AES at the property on the availability of coverage.”