                         STATE OF MICHIGAN

                          COURT OF APPEALS



MURAD MANAGEMENT, INC.,                                           UNPUBLISHED
                                                                  December 18, 2018
              Plaintiff-Appellant,

v                                                                 No. 339206
                                                                  Oakland Circuit Court
HASTINGS MUTUAL INSURANCE                                         LC No. 2016-150935-CB
COMPANY,

              Defendant-Appellee.


Before: O’BRIEN, P.J., and TUKEL and LETICA, JJ.

PER CURIAM.

        Plaintiff, Murad Management, Inc., appeals by right a trial court order granting summary
disposition in favor of defendant, Hastings Mutual Insurance Company, pursuant to MCR
2.116(C)(10) and dismissing plaintiff’s complaint. We affirm in part, reverse in part, and
remand for further proceedings consistent with this opinion.

                                     I. BACKGROUND

       Plaintiff manages a commercial office building and obtained an insurance policy for the
premises from defendant. On or about March 11, 2015, a tenant of the building reported a water
leak coming from the ceiling. Upon inspection, it was discovered that one or more of the trusses
near the east end of the building failed, causing a portion of the roof surrounding an air-
conditioning unit to visibly sag. The displacement of the roof also caused two water pipes to
break and begin pouring water into a tenant’s unit.

        Plaintiff filed a claim with defendant and retained Edward Boryn, P.E., a structural
engineer, to inspect the damage. After inspecting the roof on March 13 and 14, 2015, Boryn
issued a brief letter stating:

               During this special structural inspection, it was confirmed that the East
       portion of the main roof had sagged approximately 8” at mid-span. Temporary
       wood shoring had already been installed to prevent this portion of the roof to sag
       any further. The other roof areas appeared to be unaffected by this recent event.

               The main roof was being supported by flat, prefabricated wood roof
       trusses with a clear span of approximately 35 feet. In the area of the excessive

                                              -1-
       sagging, several failed truss connections were found. Steel truss plates (bottom
       chord) were ripped and tension web members had become detached. All these are
       classic signs of the trusses being overloaded.

                Based on this special structural inspection, it is my opinion that the
       excessive roof sag was caused by heavy snows which concentrated at the area
       under investigation. All of the main roof trusses are essentially the same, and
       have been in place for several years. Since the remaining main roof trusses are
       still intact, a reasonable conclusion would be that an abnormal event had
       occurred.

        On March 30, 2015, Richard Serbowicz, P.E., inspected the building on defendant’s
behalf. Serbowicz prepared a detailed report documenting his observations, including evidence
of prior truss repairs, “moisture staining, efflorescence, and corrosion of the metal plate
connectors at the failed bottom chord truss panel points,” and moisture-saturated areas that could
be penetrated with a utility blade using “normal hand pressure.” He also referred to a “historic
aerial view of the building roof from Google Earth,” dated May 9, 2010, that reflected dark
staining on the damaged area of the roof caused by bio growth and sediment in areas of chronic
ponding. Based on his inspection, Serbowicz reached the following conclusions:

       [I]t is our opinion that the failure and subsequent downward displacement of the
       roof structure in the easterly portion of the building was due to a loss of strength
       of a number of truss panel point connections from long-term, chronic, moisture
       exposure and related deterioration. This led to an overload of the moisture-
       compromised bottom chord metal place connections at one or more trusses
       leading to load sharing and failure of additional trusses. The presentation of the
       failed trusses, as well as evidence of long-term chronic moisture intrusion and
       prior bottom chord damage, indicates the failure likely initiated at the vicinity of
       the bottom chord of the sixth to seventh truss from the east wall which resulted in
       load sharing to adjacent trusses and progressive failure of additional trusses to the
       east of these trusses.

                It is our opinion that there is no proximate causal relationship between the
       roof failure and any specific weather-related event or occurrence. A review of the
       NOAA [National Oceanic and Atmospheric Administration] Interactive Snow
       Records on and about the reported date of loss indicates a maximum of 2” of
       modeled snow water equivalent. This equates to only 10.2 pounds per square foot
       of ground snow load. The maximum modeled snow water equivalent this past
       2014-2015 winter season per the NOAA Interactive Snow Records in this
       geographic locale was maximum 3” of water on or about March 3, 2015. This
       equates to 15.6 pounds per square foot of ground snow load. These are not
       considered an extreme or damaging amount of snow for this geographic locale,
       where the design ground snow load is 20 pounds per square foot. We would
       expect an otherwise non-moisture-deteriorated and compromised roof structure to
       resist the expected service loads on the roof on the date of loss without failure.



                                               -2-
                The progressive sagging of the roof was also hastened by the approximate
        500 pound to 600 pound rooftop unit located in the area of the roof failure. This
        added point loading on the roof structure contributed to long-term deflection of
        the roof and associated ponding of water on the roof. There was no indication
        that the roof structure had any special reinforcing provisions in the location for
        the [rooftop unit] on the roof above, which is coincident with the area of
        significant sag and failure of the roof structure.

        Relying on Serbowicz’s report, defendant denied plaintiff’s claim with respect to the roof
damage, reasoning that the claim was precluded by policy exclusions disallowing coverage for
damage caused by “[w]ear and tear”; “[r]ust, or other corrosion, decay, deterioration, hidden or
latent defect or any quality in property that causes it to damage or destroy itself”; or
“[c]ontinuous or repeated seepage or leakage of water, or the presence or condensation of
humidity, moisture or vapor, that occurs over a period of 14 days or more.” However, to the
extent that plaintiff sought coverage for interior water damage stemming from the broken water
pipes, defendant issued payment to plaintiff in the amount of $38,221.59.

         Despite the partial denial of its claim, plaintiff replaced the entire roof, all of the trusses,
and the roof-top air-conditioning unit. On January 8, 2016, plaintiff filed a two-count complaint
against defendant. In Count I, plaintiff alleged that defendant breached the terms of the
insurance policy when it denied coverage for the damaged roof. In Count II, plaintiff alleged
that it was entitled to an appraisal to determine the extent of loss. After completion of discovery,
the trial court granted defendant’s motion for summary disposition. According to the trial court,
there was no genuine issue of material fact that plaintiff’s roof damage claim fell within the
“exclusion for deterioration and continuous or repeated seepage or leakage of water . . . .” The
trial court also rejected plaintiff’s alternative reliance on an additional coverage provision
applicable to “collapse,” finding that there was no evidence of a collapse, as defined by the
policy.

                                   II. STANDARD OF REVIEW

        “We review de novo a trial court’s decision on a motion for summary disposition to
determine whether the moving party is entitled to judgment as a matter of law.” Cuddington v
United Health Servs, Inc, 298 Mich App 264, 270; 826 NW2d 519 (2012). “In reviewing a
motion brought under MCR 2.116(C)(10), we review the evidence submitted by the parties in a
light most favorable to the nonmoving party to determine whether there is a genuine issue
regarding any material fact.” Id. “A genuine issue of material fact exists when the record leaves
open an issue on which reasonable minds could differ.” Id. at 270-271 (quotation marks and
citation omitted). Preliminary issues involving the interpretation and construction of an
insurance contract involve questions of law that this Court reviews de novo. Allstate Ins Co v
Muszynski, 253 Mich App 138, 140-141; 655 NW2d 260 (2002).

        Resolution of the issues in this case requires that this Court interpret the relevant
provisions of the insurance policy. Similar to other contracts, “[a]n insurance policy must be
enforced in accordance with its terms.” Frankenmuth Mut Ins Co v Masters, 460 Mich 105, 111;
595 NW2d 832 (1999). “While [i]t is the insured’s burden to establish that his claim falls within
the terms of the policy, [t]he insurer should bear the burden of proving an absence of coverage.”

                                                  -3-
Hunt v Drielick, 496 Mich 366, 373; 852 NW2d 562 (2014) (quotation marks and citations
omitted; alterations in original). “Exclusionary clauses in insurance policies are strictly
construed in favor of the insured.” Auto-Owners Ins Co v Churchman, 440 Mich 560, 567; 489
NW2d 431 (1992). “However, [i]t is impossible to hold an insurance company liable for a risk it
did not assume, and, thus, [c]lear and specific exclusions must be enforced.” Hunt, 496 Mich at
373 (quotation marks and citations omitted; alterations in original).

                                         III. ANALYSIS

                                  A. CLAIM FOR APPRAISAL

        Plaintiff argues that the trial court erred in granting summary disposition as to Count II of
its complaint requesting an appraisal of damages because plaintiff was entitled to an appraisal in
light of defendant’s admission of liability for interior water damage. We agree.

        Section E.2 of the policy provides, “If we and you disagree on the value of the property
or the amount of loss, either may make written demand for an appraisal of the loss.” The March
2015 loss resulted in damage to the building’s roof, as well as interior water damage.
Defendant’s claims adjuster conceded at his deposition that the water damage was a covered loss
and that it was not excluded under the policy. In addition, defendant conceded coverage when it
sent a claim letter and check for $38,221.59 to plaintiff acknowledging that the policy covered
the water damages. Plaintiff disputed the amount of damages. A public adjuster who prepared
an estimate of damages also disagreed with the amount that defendant agreed to reimburse
plaintiff.

         The trial court erred by failing to address this issue in its opinion and order summarily
dismissing plaintiff’s complaint. The plain terms of the insurance policy provided that plaintiff
is entitled to an appraisal regarding the interior water damage if the parties are unable to reach an
agreement as to the value of the loss, as is the case here. Plaintiff filed a complaint containing a
written demand for an appraisal of the loss. Accordingly, plaintiff was entitled to an appraisal to
determine the value of the interior water damage attributable to the cause of loss for which
defendant conceded liability, i.e., water damage caused by the broken water pipes. On remand,
the trial court is directed to order an appraisal in accordance with the terms of the policy.

        For the first time on appeal, defendant argues that plaintiff is not entitled to an appraisal
of the interior water damage because it was not covered under the insurance policy. But after
plaintiff submitted its claim, defendant admitted that “a water event” like that at issue here was
not excluded. Defendant’s adjuster testified that the policy provided coverage for the interior
damage caused by the broken water pipes, which was why defendant issued the partial payment
to plaintiff. Accordingly, defendant waived any argument that the water damage was excluded
under the policy. “[A] waiver is a voluntary and intentional abandonment of a known right.”
Quality Prod Concepts Co v Nagel Precision, Inc, 469 Mich 362, 374; 666 NW2d 251 (2003).
Defendant is presumed to know its own insurance policy. By agreeing with plaintiff that the




                                                -4-
water damage constituted a covered loss, defendant voluntarily and intentionally abandoned any
argument that this water damage was excluded under the policy.1

                                     B. ROOF DAMAGES

       Next, plaintiff argues that the trial court erred in granting summary disposition as to its
claim for roof damages that occurred in March 2015.

        Preliminarily, the parties dispute whether evidence concerning the opinion of Dr. David
J. Eby, Ph.D., P.E., should have been considered by the trial court in the context of defendant’s
dispositive motion. In addressing a motion for summary disposition under MCR 2.116(C)(10),
“[a]ffidavits, depositions, admissions, and documentary evidence offered . . . shall only be
considered to the extent that the content or substance would be admissible as evidence to
establish or deny the grounds stated in the motion.” MCR 2.116(G)(6). At the summary
disposition stage, the proffered evidence must be plausibly admissible in substance. See 1300
LaFayette East Coop, Inc v Savoy, 284 Mich App 522, 526; 773 NW2d 57 (2009). However, the
evidence need not be admissible in form, and all foundation for admission need not be laid at the
summary disposition stage. Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285
Mich App 362, 373; 775 NW2d 618 (2009).

        Dr. Eby authored two written opinions. The first opinion, issued on December 9, 2015,
agreed with Serbowicz’s conclusion that the roof caved in “due to a loss of strength of a number
of truss panel point connections from long-term, chronic, moisture exposure and related
deterioration.” Although we agree with plaintiff’s contention that the December 9, 2015 letter
amounted to hearsay, the content of the letter was plausibly admissible as an expert opinion
under MRE 702. Neither party appears to dispute Dr. Eby’s qualification as an expert. His
opinion regarding Serbowicz’s report and the cause of the roof damage, if presented in an
admissible form, involved technical or specialized knowledge that would have assisted the trier
of fact to understand the cause of the roof damage. Furthermore, on the existing record, it
appears that Dr. Eby’s opinion was based on sufficient facts or data, as well as proper application
of reliable principles and methods. See MRE 702. Accordingly, the trial court did not err in
considering Dr. Eby’s letter in addressing the motion for summary disposition.

        For similar reasons, Dr. Eby’s subsequent retraction of his opinion should also have been
considered by the trial court. In a letter dated June 15, 2017, Dr. Eby explained that, having
reviewed additional information regarding the structure and loss, he no longer agreed with
Serbowicz’s opinion. Instead, he was unable to opine regarding the cause of the loss. It does not
appear that the trial court considered Dr. Eby’s second letter, and defendant argues that the
omission was proper because plaintiff failed to produce the second letter in connection with the
dispositive motion. We disagree.



1
 To the extent that defendant contends that some of the internal water damage was caused by
water leaking through the roof rather than the water flowing from the broken pipes, it is a
question of fact that remains unresolved at this time.


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         In considering a dispositive motion, a trial court “reviews the entire record” to determine
whether the moving party is entitled to summary disposition. Maiden v Rozwood, 461 Mich 109,
118; 597 NW2d 817 (1999) (emphasis added). In this case, plaintiff attached Dr. Eby’s second
letter to a reply in support of its motion in limine; the trial court heard the motion in limine and
the motion for summary disposition at the same time.2 Thus, the second letter was part of the
record at the time the trial court decided the motion for summary disposition and the trial court
erred in failing to consider the letter. See id.

        With respect to the issue of coverage for the roof damage, the policy provides coverage
for direct physical loss unless the loss is excluded under section B of the “CAUSES OF LOSS –
SPECIAL FORM” or subject to other limitations. In pertinent part, section B.2 provides:

               2. We will not pay for loss or damage caused by or resulting from any of
       the following:

                                              * * *

               d. (1) Wear and tear;

              (2) Rust, or other corrosion, decay, deterioration, hidden or latent defect or
       any quality in property that causes it to damage or destroy itself;

                                              * * *

               But if an excluded cause of loss that is listed in 2.d.(1) through (7) results
       in a “specified cause of loss” . . . we will pay for the loss or damage caused by
       that “specified cause of loss” . . . .

As used in this provision, the policy defines a “specified cause of loss” as including “weight of
snow, ice or sleet; [or] water damage.” In addition, “water damage” is defined to mean
“accidental discharge or leakage of water or steam as the direct result of the breaking apart or
cracking of a plumbing, heating, air conditioning or other system or appliance . . . that is located
on the described premises and contains water or steam.” As a separate exclusion, section B.2.f
precludes coverage caused by or resulting from “[c]ontinuous or repeated seepage or leakage of
water, or the presence or condensation of humidity, moisture or vapor, that occurs over a period
of 14 days or more.” The trial court cited Exclusions B.2.d(1) and (2), and B.2.f in granting
defendant’s motion for summary disposition.

       “Exclusionary clauses in insurance policies are strictly construed in favor of the insured.”
Churchman, 440 Mich at 567. An “insurance company has the burden to prove that one of the
policy’s exclusions applies.” Auto-Owners Ins Co v Seils, 310 Mich App 132, 146; 871 NW2d


2
  Although the trial court did not directly address the motion in limine at the hearing, we note
that the motion was scheduled for hearing on the same day as defendant’s motion for summary
disposition.


                                                -6-
530 (2015). Therefore, at the summary disposition stage, the insurer must show that there is no
genuine issue of material fact that the exclusion applies. “A genuine issue of material fact exists
when the record leaves open an issue on which reasonable minds could differ.” Cuddington, 298
Mich App at 270-271 (quotation marks and citation omitted).

        Both plaintiff and defendant submitted evidence of expert opinions in support of their
respective positions regarding the cause of the roof damage. However, the opinions of both
parties’ experts were undermined to some extent when they were deposed. For instance,
Serbowicz acknowledged that he did not inspect the property until approximately two or three
weeks after the roof was damaged, during which time water had been flowing into the building.
He was also unable to say with certainty whether some of the conditions he considered indicative
of chronic moisture exposure and related deterioration existed before the loss, and he did not
believe it was possible to predict the amount of ice or pooled water present on the depressed
portion of the roof just before the loss. Boryn likewise agreed that he did not know how much
weight accumulated on the roof before the damage occurred. Furthermore, Boryn did not
consider weather reports before he arrived at his opinion. Nonetheless, his opinion remained the
same after having reviewed those records. Boryn also conceded that photographs of the property
reflected earlier water intrusion of unknown duration, though it must have been long enough for
the wood to become saturated and then dry out. And, as discussed above, Dr. Eby’s later opinion
was inconclusive and, thus, did not lend weight to either party’s position.

        The record clearly consists of conflicting evidence as to the cause of the roof damage.
The first two witnesses to observe the damaged roof testified that they saw snow and ice
accumulation on the roof above the damaged area. As previously noted, the parties’ experts
disagreed about whether the damage was caused by overloading from the weight of snow and ice
or deterioration in the trusses resulting from long-term moisture exposure. While both parties
point to the inconsistencies and weakness of the opposing party’s evidence, this goes to the
weight of the evidence and the credibility of witnesses. Bouverette v Westinghouse Electric
Corp, 245 Mich App 391, 401; 628 NW2d 86 (2001) (“[A]n opposing party’s disagreement with
an expert’s opinion or interpretation of facts . . . are matters of the weight to be accorded to the
testimony, not its admissibility.”). Importantly, a trial court ruling on a motion for summary
disposition is not permitted to assess witness credibility or determine disputed facts. Lima Twp v
Bateson, 302 Mich App 483, 492; 838 NW2d 898 (2013). Viewing the evidence in the light
most favorable to plaintiff, the nonmoving party, we conclude that there was a genuine issue of
material fact as to the cause of the roof damage.

        Specifically, there was an issue of fact as to whether the loss was excluded under the
insurance policy. To the extent that defendant introduced evidence that the damage was caused
by “wear and tear,” rust, corrosion, decay, deterioration or defects in the property for purposes of
Exclusions B.2.d(1) and (2), there was evidence that these excluded causes of loss resulted in a
“specified cause of loss”—i.e., water damage or damage caused by weight of snow or ice.
Similarly, while there was evidence that the damage was caused by “[c]ontinuous or repeated
seepage or leakage of water, or the presence or condensation of humidity, moisture or vapor, that
occurs over a period of 14 days or more,” the conflicting evidence concerning causation left a
genuine issue of material fact as to whether the loss was excluded under Exclusion B.2.f. The
trial court, therefore, erred by granting defendant’s motion for summary disposition with respect
to plaintiff’s roof damage claim.

                                                -7-
                                   C. COLLAPSE COVERAGE

       Next, plaintiff argues that the trial court erred in granting summary disposition as to its
claim for coverage under the policy’s collapse coverage provision.

       The policy provides, in relevant part, as follows:

               D. Additional Coverage – Collapse

              The term Covered Cause of Loss includes the Additional Coverage –
       Collapse as described and limited in D.1. through D.5. below.

               1. With respect to buildings:

               a. Collapse means an abrupt falling down or caving in of a building or any
       part of a building with the result that the building or part of the building cannot be
       occupied for its intended purpose;

              b. A building or any part of a building that is in danger of falling down or
       caving in is not considered to be in a state of collapse;

              c. A part of a building that is standing is not considered to be in a state of
       collapse even if it has separated from another part of the building;

              d. A building that is standing or any part of a building that is standing is
       not considered to be in a state of collapse even if it shows evidence of cracking,
       bulging, sagging, bending, leaning, settling, shrinkage or expansion.

The trial court held that there was no evidence to show that a collapse occurred. We agree.

        The evidence showed that a portion of the roof abruptly “caved in” for purposes of D.1.a.
The verb “caved” is defined in relevant part as “to fall in or down esp. from being undermined
— usu. used with in[.]” Merriam-Webster’s Collegiate Dictionary (11th ed). The evidence
showed that a portion of the roof abruptly fell in or down at the subject property. However, the
policy further provides that a part of the building is not considered to have collapsed if that part
of the building “is standing . . . even if it has separated from another part of the building.” The
policy also provides that a building is not considered to have collapsed “even if it shows
evidence of . . . sagging . . . .” Reading these provisions together as a harmonious whole
indicates that a “cave in” of the type at issue in this case—that is, a displaced or sagging roof that
remains connected to the standing building—is not considered a “collapse” under the terms of
the policy. Therefore, the trial court did not err in granting summary disposition in favor of
defendant as to the issue of collapse coverage.




                                                 -8-
                           D. ORDINANCE OR LAW COVERAGE

       Finally, plaintiff argues that the trial court erred in granting summary disposition and
dismissing its claim for coverage for removal and replacement of the entire roof under the
insurance policy’s “Ordinance or Law” coverage.

       Plaintiff’s insurance policy included a “DELUXE PROPERTY COVERAGE
EXTENSION” form containing a provision entitled “Ordinance or Law Coverage,” which
provided, in relevant part, as follows:

              Coverage for Loss to the Undamaged Portion of the Building – If a
       Covered Cause of Loss occurs to covered Building Property shown in the
       Declarations, we will pay for loss to the undamaged portion of the building
       caused by enforcement of any ordinance or law that requires the demolition of the
       undamaged portion. The ordinance must be in force at the time of loss.

         The trial court failed to address whether replacement of the undamaged portion of the
roof fell within the scope of this coverage. This omission was presumably a result of the plain
language of the provision, which conditions the ordinance or law coverage upon the occurrence
of a covered cause of loss, coupled with the trial court’s conclusion that there was no genuine
issue of material fact as to the issue of coverage for the roof damage. Because we conclude that
the trial court erred by ruling that there was no coverage for the roof damage as a matter of law,
we decline to address this issue for the first time on appeal. Instead, on remand, the trial court
should determine whether a genuine issue of material fact exists concerning whether plaintiff is
entitled to coverage for the full roof replacement under the terms of the ordinance or law
coverage. See Wells Fargo Bank, NA v Null, 304 Mich App 508, 540; 847 NW2d 657 (2014)
(remanding issue to trial court for first determination where the issue was not addressed because
of erroneous predicate ruling).

        Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.




                                                            /s/ Colleen A. O'Brien
                                                            /s/ Jonathan Tukel
                                                            /s/ Anica Letica




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