Homeowners insurance coverage dispute; Policy limitations-period; When defendant formally denied liability; MCL 500.2833(1)(q); Motion to compel an appraisal; MCL 500.2833(1)(m); Cantina Enters II Inc v Property-Owners Ins Co

In this homeowners coverage dispute, the court held that there was a question of fact as to whether defendant-insurer’s denial of some of plaintiffs’ claims “was equivocal or even revoked.” But plaintiffs were not entitled to an appraisal as to the disputed claims because a question existed as to whether they were covered at all. Thus, the court affirmed in part and reversed in part the trial court’s order denying their motion to compel an appraisal and granting defendant’s summary disposition motion, and remanded. Plaintiffs filed a claim with defendant for damages after a pipe broke in their second-floor bathroom. Defendant made two payments totaling “about $10,000 to compensate plaintiffs for their loss.” They later submitted a proof of loss seeking approximately $135,000. Defendant “agreed to an independent appraisal for only the damaged property for which it acknowledged liability.” Plaintiffs sued and moved to compel an appraisal of all of their claims, The trial court found that defendant denied their claim on 8/18/22 and thus, the limitations period began running on that date and expired before they filed suit. The issue of whether the policy’s limitations-period provision barred their claims turned “on when defendant formally denied liability.” The court concluded defendant’s 8/18/22 letter denied coverage for plumbing repairs and additional living expenses but “did not formally deny liability for” other claims, such as “for the second-floor bathroom or for other items beyond the kitchen area. Whether this letter was a formal denial of these claims is further called into question by defendant’s subsequent requests that plaintiffs provide documentation in support of their claims related to the bathroom and other kitchen-related losses[.]” But the court found that their argument they were “entitled to an independent appraisal to evaluate the merit [of] their $135,000 claim relies on a strained reading of Cantina that conflates disputes over coverage with the valuation of a claim after liability is acknowledged. Unlike the defendant in Cantina, defendant in this case paid for specific damaged property that it determined were covered losses. Thus, [it] did not make ‘partial payments’ for the disputed claims at issue.” Because it paid “for specific damages that it determined were covered under the policy, while disputing liability for other claims[,]” the issue was “not simply the ‘amount of money owed to plaintiff[s] for the loss[.]’”