Michael F. Schmidt Obtains Summary Judgment in Declaratory Judgment Action Enforcing Business Exclusion to Exclude Coverage and Defense to the Insured in An Underlying Wrongful Death Suit

Depositors Insurance Company v William Sammut and Yvonne Brown, as Personal Representative of the Estate of James Brown III, Deceased, 2023 U.S. Dist. LEXIS 151298; 2023 WL 55341898 (ED Mich, 2023). Filed a declaratory complaint in U.S. District Court to enforce the Business Exclusion in the policy issued to the insured in regard to claims made against the insured in an underlying wrongful death suit pending in Macomb County Circuit Court, Yvonne Brown, as Personal Representative of the Estate of James Brown III, Deceased, v King Custom Design, Inc., Emad Kahmo, William J. Sammut, Sammut Properties, LLC and Circle Engineering, Inc., Macomb County Circuit Court Civil Action No. 21-004032-NO. Following discovery including the deposition of the insured William J. Sammut, filed a motion for summary judgment on the basis that discovery had determined that at the time of the alleged incident, William J. Sammut was engaged in a business involving cleaning out a building owned by Sammut Properties, LLC in which Circle Engineering, Inc. had conducted a tool and die business. The insured filed a cross-motion for summary judgment arguing that the exclusion did not apply. The Court issued a written opinion agreeing with all of our arguments and rejecting the arguments made by the insured holding that the language of the policy presented no ambiguity and no concern for public policy, that the arguments by the insured regarding other policy provisions were “mistaken” and that the coverage exclusion of the policy “must be honored.” The Court further held that the Business exclusion pursuant to the policy definitions of “Business” applied based upon the undisputed facts and William J. Sammut’s own testimony as to the activities going on at the time of the accident. The Court concluded that Depositors was entitled to summary judgment that there was no duty to provide coverage or a defense to the insured in the underlying action.