The owner of a building that housed a marijuana growing operation that was damaged by fire is not entitled to coverage because the structure did not have an automatic extinguishing system as required by its policy, a Michigan appeals court has ruled.
The fire policy in the case was issued by Birmingham, Michigan-based Conifer Insurance Co. to Jenison, Michigan-based 23771 Blackstone LLC, according to last week’s ruling by the Michigan Court of Appeals in Grand Rapids in 23771 Blackstone LLC v. Conifer Insurance Co.
The business argued it was entitled to coverage because the insurer was aware that the property did not have such a system, as indicated in multiple inspection reports that it had received.
A trial court ruled, however, that the insurer was nevertheless not obligated to provide coverage, and a three-judge appeals court panel agreed.
The “mere fact that defendant and plaintiff may have been aware that the property did not have an AES does not establish that parties mutually understood and agreed that an AES was not required as a condition of coverage,” the ruling said.
“As stated, the policy unambiguously required that the property have an AES as a condition of coverage, and there is no evidence that defendant ever intended or agreed that an AES was not necessary,” it said, in affirming the lower court.