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Salleh v. Travelers Casualty Insurance Co.

Superior Court of Maine, Cumberland

November 23, 2016


          Thomas D. Warren Justice

         This case concerns an insurance claim made by plaintiff Kherallah Salleh with respect to fire damage at the location where Salleh maintained an auto repair business.

         Before the court are four motions: (1) a motion for summary judgment by defendant Travelers Casualty Insurance Co.; (2) a motion for summary judgment by defendant Michals Insurance Agency Inc.; (3) a motion by Salleh to strike an expert witness designated by Travelers; and (4) a motion in limine by the Michals Agency to exclude a recorded out of court statement by Nick Lotfey, an employee of the Michals Agency.

         Summary Judgment

         Summary judgment should be granted if there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. In considering a motion for summary judgment, the court is required to consider only the portions of the record referred to and the material facts set forth in the parties' Rule 56(h) statements. E.g., Johnson v. McNeil, 2002 ME 99 ¶ 8, 800 A.2d 702. The facts must be considered in the light most favorable to the non-moving party. Id. Thus, for purposes of summary judgment, any factual disputes must be resolved against the movant. Nevertheless, when the facts offered by a party in opposition to summary judgment would not, if offered at trial, be sufficient to withstand a motion for judgment as a matter of law, summary judgment should be granted. Rodrigue v. Rodrigue, 1997 ME 99 ¶ 8, 694 A.2d 924.

         Travelers Summary Judgment Motion Based on Alleged Misrepresentations

         In its motion Travelers has assembled a lengthy list of alleged misrepresentations that it contends void Salleh's insurance policy. Salleh argues that misrepresentations, under the policy, have to be "intentional" or "willful." He acknowledges one misrepresentation but contends that it was innocent because he was advised to make the misrepresentation by Nick Lotfey, the insurance agent from the Michals Agency who sold him the policy. Salleh contends that under 24-A M.R.S. §§ 2422(1) and (2) Lotfey was an agent of Travelers and that any information known to Lotfey (including the information that Omar Martinez was the actual owner of the two car lifts that Salleh originally claimed were owned by Salleh) is regarded as having been known by Travelers.

         Salleh has also submitted an affidavit disputing all of the other allegedly willful misrepresentations relied upon by Travelers. On all of the alleged misrepresentation issues the court concludes that Salleh has submitted sufficient evidence to raise disputed issues for trial.

         Travelers Summary Judgment Motion relating to Coverage for Damage to Building

         In addition to seeking reimbursement for alleged losses to his tools, office furniture and equipment, an allegedly expensive painting, and car parts (batteries, tires, radios and car computers), Salleh contends that he is entitled to reimbursement for damage to the portion of the building which he leased for his auto repair business. However, the Declarations to the policy for "property damage" do not cover damage to the building but only "business personal property, " business interruption, accounts receivable, and valuable papers.[1] The policy also provides that property only qualifies as "covered property" if a limit on coverage is shown in the Declarations. No such limit is shown for any buildings.

         Salleh argues that he is entitled to coverage under a provision applicable to "newly acquired" property including "buildings you acquire by purchase or lease at any premises including those premises shown on the Declarations." This provision, however, applies to the future purchase or lease of additional premises. It is undisputed that Salleh had already leased the property where the fire occurred and had done so six weeks before the policy was issued. Travelers SMF ¶ 54.[2]

         It makes no sense to construe coverage for "buildings you acquire" to mean coverage for "buildings you have already leased at the time the policy was issued." Moreover, the language that the "buildings you acquire" can be at the premises shown on the Declarations as well as at other premises demonstrates that this provision is intended to apply to new premises and not to the insured's existing premises.

         The court concludes that even under the principle that ambiguities are to be construed in favor of the insured, there is no ambiguity here and coverage is not available for Salleh's claim of damage to the building. Travelers is entitled to summary judgment on Salleh's claim for damage to the building.

         Michals Summary ...

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