Michael F. Schmidt Pursuades The Michigan Court Of Appeals To Affirm Arbitrators’ Rejection Of Coverage And Defense Costs Arising Out Of A $10 Million Recall Claim

Machining Enterprises, Inc. a/k/a Enterprise Auto Systems v Wausau Business Insurance Company, Michigan Court of Appeals, we recently obtained affirmance by the Michigan Court of Appeals of an arbitration award that our client, Wausau Business Insurance Company, had no duty to provide coverage or a defense for underlying claims made against Machining Enterprises, Inc. based on a General Motors recall in which MEI sought in excess of $10,000,000 from Wausau for indemnification and defense costs.  MEI argued on appeal that the arbitrators had committed an error of law in refusing to follow the Supreme Court decision in American Bumper v Hartford Fire Insurance, 452 Mich 440 (1996), that the arbitrator refused to hear evidence and that the defense arbitrator and judge should have been disqualified.  We successfully argued that the arbitrators committed no error of law and correctly applied every rule of Michigan insurance law including these set forth by the Supreme Court in the American Bumper case, that the arbitrators did not exclude any evidence, and that there was no basis to disqualify the trial judge or the defense arbitrator.