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No. 131546
| Hastings Mutual Insurance Company, |
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Constantine N. Kallas |
Plaintiff-Appellant-Cross-Appellee, |
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Michele L. Riker-Semon |
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(Appeal from Ct of Appeals) |
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(Oakland - Grant, N.) |
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| Mosher, Dolan, Cataldo & Kelly, Inc., |
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Paul C. Smith |
Defendant-Appellee-Cross-Appellant, |
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| Lisa Feinbloom and David Feinbloom, |
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| Defendants. |
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| __________________________________________ |
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Click to view briefs in Adobe format:
Plaintiff-Appellant-Cross-Appellee's Brief on Appeal>>
Defendant-Appellee-Cross-Appellant's Brief on Appeal>>
Defendant-Appellee-Cross-Appellant's Reply Brief>>
Amerisure Mutual Insurance Company's Amicus Curiae Brief>>
Complex Insurance Claims Litigation Association's Amicus Curiae Brief>>
Insurance Institute of Michigan, National Association of Mutual Insurance Companies, and
Property Casualty Insurers Association of America's Amici Curiae Brief>>
National Association of Home Builders and Michigan Association of Home Builders' Amici Curiae Brief>>
Background
Hastings Mutual Insurance Company issued Comprehensive General Liability (CGL) policies to Mosher, Dolan, Cataldo & Kelly, Inc. for 2001, 2002 and 2003. Mosher Dolan, acting as the general contractor, built a $5 million custom home for Lisa and David Feinbloom. The Feinblooms later sought damages in arbitration for various defects in building materials and workmanship, including claims concerning the presence of mold and other toxins in building materials. Mosher Dolan sought coverage from Hastings under the CGL policies. Hastings provided a defense under a reservation of rights letter, but also brought a declaratory action against Mosher Dolan and the Feinblooms, asking the court to rule that Hastings had no duty to defend or indemnify any defendant in the arbitration. The arbitrator found for the Feinblooms and against Mosher Dolan on some claims, especially those involving visible mold on installed sub-flooring materials. But the arbitrator denied the bulk of the Feinblooms’ claims, including ones that the house was unlivable and that spores affected the Feinblooms’ asthmatic children, finding that Mosher Dolan was not responsible. Hastings and Mosher Dolan both sought summary disposition in the declaratory action; the key issues were whether the property damage was an “occurrence” under the policies and whether exclusions to coverage applied, most prominently the “Damage to Your Own Work” and “Fungi” exclusions in the CGL policies. The circuit court ruled in favor of Mosher Dolan, finding that Hastings had a duty to indemnify Mosher Dolan. Hastings appealed. The Court of Appeals held that the circuit court erred in finding that Hastings had a duty to indemnify, but found that Hastings’ duty to defend was “broader” and might obligate it to defend Mosher Dolan. The Court of Appeals remanded the case to the circuit court for it to determine: (1) at what point in the arbitration proceedings, if any, could Hastings confine the Feinblooms’ claims to theories not covered by the policy, and (2) the extent of Hastings’ liability for Mosher Dolan’s defense costs until that point. Both Hastings and Mosher Dolan appeal.
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