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Mike Guss and William Clos Obtain Summary Disposition On A Homeowners Policy For Additional Loss Based Upon The Mend The Hold Doctrine And Faulty Workmanship Exclusion

Charles and Dianne McSwain v. Pioneer State Mutual Insurance Company, Macomb county Circuit Court. Plaintiffs filed suit seeking to obtain additional coverage after a water loss in their residence on a homeowner policy issued by Pioneer State Mutual Insurance Company. The Plaintiffs hired a third-party, Select Restorations, to repair their kitchen after the loss. Pioneer covered all expenses for the initial repair of the kitchen along with related Alternative Living Expenses. Unknown to Pioneer and plaintiffs, Select Restoration cut into the flooring of plaintiffs’ kitchen that contained asbestos without taking proper precautions to limit disbursement of asbestos throughout the house. After receiving full payment of their claim, plaintiffs subsequently brought suit against Pioneer and Select Restoration for asbestos abatement through the entire house, ultimately seeking over $80,000. Plaintiffs settled their case with Select Restoration leaving Pioneer as the sole defendant. Plaintiffs and Pioneer filed for Summary Disposition. Plaintiffs argued that Pioneer was liable for the whole house remediation based upon the “Mend the Hold Doctrine,” arguing that since Pioneer agreed to repair the property by removing the asbestos flooring, it was subsequently estopped from denying coverage for whole house remediation. Pioneer argued that the Mend the Hold Doctrine was in-applicable and the claim was excluded by the faulty workmanship exception in the policy. The Court granted Pioneers motion holding that the Mend the Hold Doctrine was inapplicable to this loss, the loss was excluded by the faulty workmanship exclusion and that plaintiffs violated the policy condition by settling with Select Restoration destroying Pioneer’s right to subrogate this claim.