Frankenmuth Mutual Ins. Co. v. Fun F/X II, Inc.

Dist. Ct. did not err in granting plaintiff-insurance company’s motion for summary judgment in action seeking declaration that it did not owe coverage to defendant-insured for 2019 fire damages to its warehouse based upon exclusion in relevant insurance policy. Record showed that defendant learned on two occasions in 2017 that its sprinkler system in warehouse lacked working water supply, and that problem with sprinkler system was never fixed. Moreover, policy stated that it would not pay for losses resulting from fire under circumstances, where: (1) insured knows of any “suspension or impairment” to its automatic sprinkler system; and (2) insured failed to notify plaintiff of said suspension or impairment. As such, Dist. Ct. could properly find that instant exclusion applied, where it was undisputed that defendant was aware of sprinkler system impairment and never notified defendant of said impairment. Ct. rejected defendant’s contention that exclusion should not apply because impairment at issue was sealed water line that was located outside warehouse.