Court of Appeals panel rejects an insurer's attempt to cancel coverage after loss

Susan Bailey owned a rental home that she insured with Great Lakes Mutual Insurance Company.  A year and a half after insuring the property, it suffered damage by a water leak while she was preparing for a new tenant.  Great Lakes rejected her damage claim, pointing to the fact that the property had been empty for more than four months, but she had not complied with the insurer's "Statement of Occupancy" that obligated her to inform Great Lakes if the property was "unoccupied" for more than 60 days.  The trial judge and Court of Appeals had both denied the insurer summary disposition of Bailey's coverage claim, but Michigan's insurer-friendly Supreme Court had sent the case back to the appellate court for re-evaluation. 

The Supreme Court had demanded that the judges consider the precedential value of the Ellis v. Farm Bureau Supreme Court case which had previously denied coverage to a similarly-situated insured.  The Judges noted that unlike the Ellis case, in this case the "Statement of Occupancy" executed by Bailey was neither incorporated into the policy nor incorporated into the Application for insurance.  It was executed days after the application was filed and never made a part of the actual insurance policy as an endorsement or a rider.  Therefore, the judges concluded that consistent with past cases that require that the court interpret the facts of the loss consistent with the actual language of the parties' insurance agreement, the mandatory notice of non-occupancy was not part of their "meeting of the minds."