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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JOHN R. SPRINGS, INC.,
Plaintiff, Case No. 20-11536
v. Honorable Nancy G. Edmunds
AFFILIATED FM INSURANCE
COMPANY, Defendant.
__________________ ___________/
ORDER DENYING PLAINTIFF’S MOTION TO COMPEL APPRAISAL [12],
DENYING PLAINTIFF’S MOTION FO R A PROTECTIVE ORDER [17],
DENYING DEFENDANT’S MOTION TO COMPEL [24], AND GRANTING
DEFENDANT’S MOTION TO ADJOURN SCHEDULING ORDER [30]
This is an insurance coverage dispute. The matter is before the Court on four
motions filed by the parties: (1) Plaintiff’ s motion for judgment on the pleadings or,
alternatively, motion for a partial summary judgment to compel appraisal (ECF No. 12);
(2) Plaintiff’s motion for a protective order (ECF No. 17); (3) Defendant’s motion to
compel answers to interrogatories and respon ses to requests for the production of
documents (ECF No. 24); and (4) Defendant’ s motion to adjourn the scheduling order
(ECF No. 30). The Court finds that the decision process would not be significantly
aided by oral argument. Theref ore, pursuant to Eastern Distr ict of Michigan Local Rule
7.1(f)(2), the motions befor e the Court will be decided on t he briefs and without oral
argument. For the reasons set forth bel ow, the Court DENIES WITHOUT PREJUDICE
Plaintiff’s motion to compel appraisal, DENIES Plaintiff’s motion for a protective order,
DENIES WITHOUT PREJUDICE Defendant ’s motion to compel, and GRANTS
Defendant’s motion to adj ourn the scheduling order. Case 2:20-cv-11536-NGE-RSW ECF No. 31, PageID.1366 Filed 01/22/21 Page 1 of 7
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I. Background
Plaintiff first submitted its insurance clai m to Defendant in October 2016 after five
underground pipes broke under Arena 2 at Plaint iff’s four ice rink facility in Troy,
Michigan. In a letter dated November 10, 2016, Defendant acknowledged that the
2015-2016 policy it had issued to Plaintiff was in effect at the time. (ECF. No. 1-6.) The
letter noted that the policy provides coverage on an occurrence basis—more
specifically, “occurrence means the sum total of all loss or damage of the type insured .
. . arising out of or caused by one discrete event of physical loss or damage.” The letter
further stated that each pipe break would be considered a separate occurrence, subject
to a $10,000 deductible, and that “[a]dditional comments on coverage will be made at a
later date as necessary.” The breaks were believed to have occurred as a result of
“forces exerted by adjacent froz en soil likely due to a low hot water flow rate.” The letter
noted that the cost of the repairs was r eported to be approximately $40,000 at the time.
Additional loss or damage, how ever, later took place under all four of the rinks,
including damage to the piping in all rinks, the mechanical room, and the rink floors.
And in September 2019, Plaintiff submitted a proposal to replace all four ice rinks and
other equipment with a total cost of close to $7.5 million. Plaintiff claims that all of this
damage is “arising out of or caused by” t he five breaks because all four rinks are
housed in the same building and share a common “hot water” return system, or “loop.”
Defendant, however, disputes this assertion. Pl aintiff submitted a proof of loss in March
2020, and it was acknowledged by Defendant. Defendant was still investigating the claim when Plaintiff filed this suit on June 11,
2020. (ECF No. 1.) On August 3, 2020, th e Court issued a scheduling order, setting Case 2:20-cv-11536-NGE-RSW ECF No. 31, PageID.1367 Filed 01/22/21 Page 2 of 7
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the discovery cut-off on January 15, 2021, and the dispositive motion deadline on
February 26, 2021. (ECF No. 10.) Less than one month after this order was entered
and before any discovery was conducted, Plainti ff filed its motion to compel appraisal.
(ECF Nos. 12, 14, 16, 29.) Defendant filed a response opposi ng Plaintiff’s motion, (ECF
No. 15), and later issued discovery requests to Plaintiff. In respons e, Plaintiff filed a
motion for entry of a protective order stay ing all discovery pending the Court’s resolution
of the motion to compel appr aisal. (ECF Nos. 17, 22. ) Defendant filed a response
opposing this motion, (ECF No. 18), and later filed a motion to compel answers to its
interrogatories and responses to its requests for the production of documents, (ECF
Nos. 24, 28). Defendant stat ed that despite the pending mo tions before the Court, it
was attempting to comply with the scheduling order in effect at the time . Plaintiff filed a
response opposing Defendant’s motion to co mpel, arguing in part that its pending
motion for a protective order excuses its failure to respond to Defendant’s discovery
requests. (ECF No. 25.) One day before the deadline for discovery passed, Defendant
filed a motion to adjourn the scheduling order by sixty days. (ECF No. 30.)
II. Plaintiff’s Motion to Compel Appraisal
A. Standard of Review Plaintiff’s motion is titled as one for a j udgment on the pleadings or, alternatively,
partial summary judgment to co mpel appraisal. A review of the briefing, however,
reveals that it is a motion for a judgment on the pleadings pursuant to Federal Rule of
Civil Procedure 12(c). “[W]hen the plaintiff moves for judgm ent on the pleadings, the
motion should be granted if, on the undenied facts alleg ed in the complaint and
assuming as true all the material allegations of fact in the ans wer, the plaintiff is entitled Case 2:20-cv-11536-NGE-RSW ECF No. 31, PageID.1368 Filed 01/22/21 Page 3 of 7
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to judgment as a matter of law.” Lowden v. County of Clare , 709 F. Supp. 2d 540, 546
(E.D. Mich. 2010).
B. Analysis
Plaintiff seeks an order requiring Def endant to proceed to appraisal with respect
to the amount of loss due to the 2016 breaks and stayi ng the entire case until
completion of the appraisal process. Def endant argues that appraisa l is premature at
this time. Under Michigan law, if an insurer and the insured disagree on the amount of a
loss of a claim, “either party may make a wr itten demand that the am ount of loss . . . be
set by appraisal.” Mich. Comp. Laws § 500.2833( 1)(m). At that point, once the “insurer
admits that a loss is covered under its policy, a court is statutorily mandated to order the
parties to participate in Michigan’s statutor y appraisal process, as the parties do not
dispute liability and only are at odds about the amount of loss.” The D Boys, L.L.C. v.
Mid-Century Ins. Co. , 644 F. App’x 574, 578 (6th Cir. 2016). However, if “if liability is
not admitted by an insurer, the trial court must first dete rmine the issue of ‘coverage’
before ordering appraisal.” Id.; see also Auto-Owners Ins. Co. v. Kwaiser , 476 N.W.2d
467, 469-70 (Mich. Ct. App. 1991). Plaintiff argues that because Defendant has admitted coverage with respect to the
loss “arising out of or caused by” the fi ve 2016 breaks and Plaintiff has submitted a
proof of loss, Defendant is required to pr oceed with Michigan’s statutory appraisal
process. Defendant responds by arguing that there are a number of coverage issues
and affirmative defenses that require resolution by the Court before appraisal can occur.
More specifically, Defendant notes that wh ile it concedes coverage for the cost of Case 2:20-cv-11536-NGE-RSW ECF No. 31, PageID.1369 Filed 01/22/21 Page 4 of 7
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repairing the five 2016 pipe breaks under Arena 2, it denies there is a connection
between those breaks and the re mainder of Plaintiff’s in surance claim. Defendant
argues that the Court may need to address whether Plaintiff is entitled to the
replacement of undamaged property because the pol icy covers “risks of physical loss or
damage.” Defendant also notes that particular losses may fall within categories of
excluded perils under the policy—wear and t ear, deterioration, or corrosion; faulty
workmanship; changes of tem perature; and settling, cracki ng, shrinking, bulging, or
expansion of floors. Having considered the pleadings and t he arguments made by the parties, the
Court agrees with Defendant that appraisal is pr emature at this early juncture of the
case. While the Court may ultimately find that the only genuine disputes between the
parties relate to scope-of-loss issues that should be decided by appraisers, rather than
coverage issues that should be decided by the Court, it cannot do so based on the
pleadings alone. Defendant is entitled to firs t conduct discovery to explore the issues it
asserts may limit coverage. See Cox v. State Farm Fire & Cas. Co. , No. 19-12235,
2019 U.S. Dist. LEXIS 225171, at *8-11 (E.D. Mich . Nov. 20, 2019). Then, if the parties
agree on any remaining disputes or Plaintiff successfully contests those issues in a
future motion for summary judgm ent, the Court may order the pa rties to submit the case
to appraisal at that point. See id. at *10. Accordingly, Pl aintiff’s motion to compel
appraisal is denied wi thout prejudice.
III. Plaintiff’s Motion for Protective Order
Plaintiff seeks a protecti ve order staying discover y pending the Court’s ruling on
its motion to compel appraisal. In so doing, Plaintiff argues that Defendant’s discovery Case 2:20-cv-11536-NGE-RSW ECF No. 31, PageID.1370 Filed 01/22/21 Page 5 of 7
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requests are unwarranted because they relate to questions that are more appropriately
decided by appraisers. However, this is simi lar to the argument Plaintiff makes in its
motion to compel appraisal, which is pendi ng before the Court. Notwithstanding,
because the Court is now denying Plaintiff’s motion to compel appraisal, Plaintiff’s
motion for a protective order is moot. A ccordingly, the Court denies this motion.
IV. Defendant’s Motion to Compel
Defendant moves for an order compelli ng answers to its interrogatories and
responses to its requests for the production of documents. Becaus e the propriety of
Defendant’s discovery requests was placed be fore the Court when Plaintiff filed its
motion for a protective order, the Court finds Defendant’s moti on to compel premature.
Accordingly, the Court denies this motion wit hout prejudice to refiling if the need to do
so arises. V. Defendant’s Motion to Adjourn Scheduling Order
Defendant requests the Court enter an order adjourning all dates in the current
scheduling order by a period of si xty days. In light of this case’s procedural history, the
Court finds there is good cause to modify the scheduling order. The Court will adjourn
all dates by sixty days. VI. Conclusion For the foregoing reasons,
IT IS HEREBY ORDERED that Plaintiff’ s motion to compel appraisal is DENIED
WITHOUT PREJUDICE. IT IS FURTHER ORDERED that Plaintiff’s motion for a protective order is DENIED
as moot. Case 2:20-cv-11536-NGE-RSW ECF No. 31, PageID.1371 Filed 01/22/21 Page 6 of 7
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IT IS FURTHER ORDERED that Def endant’s motion to compel is DENIED
WITHOUT PREJUDICE. FINALLY, IT IS ORDERED that Defendant ’s motion to adjourn the scheduling
order is GRANTED. Discovery shall be re-opened, and the scheduling order shall be
adjourned by sixty days as follows: Discovery cut-off: March 15, 2021 Dispositive motions fil ed by: April 26, 2021
Final Pretrial Order Due: August 9, 2021 Final Pretrial Conference: August 16, 2021 Trial Date: (Trailing) September 7, 2021 SO ORDERED. s/Nancy G. Edmunds
Nancy G. Edmunds
United States District Judge
Dated: January 22, 2021 I hereby certify that a copy of the foregoing document was served upon counsel of record
on January 22, 2021, by electr onic and/or ordinary mail.
s/Lisa Bartlett
Case Manager
Case 2:20-cv-11536-NGE-RSW ECF No. 31, PageID.1372 Filed 01/22/21 Page 7 of 7