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Michael F. Schmidt Wins Collapsing Wall Insurance Coverage Litigation

Northstar Petroleum, Inc. v L & M Masonry Enterprises and Allied Insurance, Oakland County Circuit Court. The plaintiffs, Northstar Petroleum, Inc., Atlantis Development Corporation and Atlantis Management Co., brought suit against L & M Masonry Enterprises, Inc. and Allied Insurance seeking to recover approximately $300,000 in damages for the collapse of a wall which was part of a construction project for a shopping center. The wall collapsed due to high winds and as a result adjacent walls also had to be torn down and replaced. The plaintiffs were the owners and general contractor for the project and brought suit against L & M, the masonry subcontractor, and Allied Insurance. The claims against Allied were based on the contract documents which required L & M to obtain a policy of insurance naming the plaintiffs as insureds and also to obtain insurance providing liability coverage for L & M. We filed a motion for summary disposition on behalf of Allied arguing that the plaintiffs were not insureds under the policy issued by Allied to L & M, and even if they were insureds, the policy was a commercial general liability policy which did not provide any first party coverage. We also argued that there was no coverage available to L & M for any of the claims made by the plaintiffs because all of the damage was to L & M’s own work or was incurred in repair and replacement of L & M’s work, and thus there was no “occurrence”, no “property damage” and coverage was also excluded by the business risk exclusions. The plaintiffs entered a default against L & M in the amount of $288,000 and we obtained an order of dismissal as to any and all claims against Allied determining that Allied provided no coverage to the plaintiffs, and also had no duty to provide any coverage or defense to L & M for any of the claims made by the plaintiffs.