Insurer prevails in coverage dispute with contractor

Citizens issues a commercial policy to Merlo Construction in Wayne County.  The policy provided for coverage of all pieces of equipment listed in the schedule.  After several years, Merlo replaced a 2000 Caterpillar 950-G wheel loacder with a 2002 model.  Whoever filled out the renewal changed the value of the loader from $125,000.00 to $105,000.00 but did not change the year or the serial number. It was stolen several months later.  Citizens argued that it did not owe coverage for the loss.  The contractor argued that the simple error in identification of the two machines of comparable value (in fact of lesser value for the replacement) should not invalidate the coverage on the stolen front-end loader because the risk assumed and underwritten by Citizens was identical. 

The trial court ruled as a matter of equity that there had been a simple mistake in description which did not invalidate coverage on the 950 G.  The Court of Appeals reversed and applied the modern Republican analysis to insurance coverage:  regardless of what the parties intended or the insured paid for, the fine print did not include coverage on this particular vehicle:  therefore there was no coverage.  Instead there was coverage on a vehicle the plaintiff no longer owned....

The Court also concluded that the replacement 950-G was not "newly acquired" under the policy, as by contract newly-acquired replacements must be added to the schedule within 60 days.