Breach of Material Condition for Monitored Fire Alarm Voids Coverage
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No Monitored Fire Alarm: No Coverage
Post 5191
In Northfield Insurance Co. v. Michigan 32, LLC, No. 24-CV-12822, United States District Court, E.D. Michigan, Southern Division (September 10, 2025) Defendant Michigan 32, LLC’s (MI 32) moved the court for reconsideration of the Court’s Opinion and Order granting summary judgment to Plaintiff Northfield Insurance Company (Northfield).
The matter arose out of a commercial insurance coverage dispute wherein Northfield denied MI 32’s fire loss claim. The Court granted summary judgment in favor of Northfield on its Declaratory Judgment action.
THE ORIGINAL DECISION
The Protective Safeguard Endorsement
The Court held that MI 32’s admitted failure to comply with its Policy’s Protective Safeguard Endorsement (“PSE”), requiring that the insured building be protected by a centrally-monitored fire alarm, which was a condition precedent to coverage, precluded coverage for the fire loss under the PSE terms and fire loss exclusion. Second, the Policy was void ab initio where it was issued in reliance on MI 32’s undisputed material misrepresentations in its application, i.e., that it had an ADT-monitored fire alarm when its principal later admitted it never did. MI 32 now maintains the Court granted Northfield’s motion without addressing MI 32’s waiver and estoppel defenses.
The Motion for Reconsideration
The local rules of this district no longer allow a party to file a motion for reconsideration of final orders or judgments. Motions to alter or amend judgment pursuant to Rule 59(e) may be granted only if there is a clear error of law, newly discovered evidence, an intervening change in controlling law, or to prevent manifest injustice. While Rule 59(e) permits a court to alter or amend a judgment, it may not be used to relitigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment.
Rule 60(b) allows a court to relieve a party from a final judgment, order, or proceeding for the following reasons:
1 mistake, inadvertence, surprise, or excusable neglect;
2 newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
3 fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
4 the judgment is void;
5 the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or
6 any other reason that justifies relief.
In its response to Northfield’s motion for summary judgment, MI 32 argued that Northfield waived, or should be estopped from asserting, coverage preclusion or policy rescission because Northfield knew or should have known that MI 32 did not have an automatic fire alarm system. One basis of Northfield’s alleged knowledge was an August 25, 2022 phone conversation between MI 32’s principal and Traveler’s Risk Control Consultant Melissa Ellison, characterized by MI 32 as an “inspection,” which took place months after the Policy was issued.
ANALYSIS
The Court expressly found that MI 32 produced no evidence to contradict the Northfield underwriter’s affidavit attesting to the fact that Northfield did not know there was no automatic fire alarm system at the subject property when it issued the policies, and that it would not have issued the polices to MI 32 had it known.
The Court did not commit a clear error of law, or a manifest injustice, nor is there any basis to conclude that this an “unusual and extreme situation[] where principles of equity mandate relief.” MI 32 fails to satisfy its burden under Rule 59(e) or 60(b) and merely rehashes arguments contained in its responsive pleading that were already considered by the Court.
Defendant’s motion for reconsideration or rehearing was DENIED.
ZALMA OPINION
The covenant of good faith and fair dealing implied in all insurance contracts applies equally to the insured as it does to the insurer. In this case the insured blatantly lied on its application for insurance that it had a monitored fire alarm system that, after the fire, the insured admitted there was no alarm. The policy could have been rescinded for that lie and the endorsement, a condition precedent to coverage, eliminated the coverage. Therefore there was no coverage either way and the motion for reconsideration was a waste of time.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Anti-Public Adjuster Clause Is Effective in New York
Post number 5301
Read the full article at https://www.linkedin.com/pulse/public-adjusters-attempt-represent-insured-subject-zalma-esq-cfe-rubfc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster
In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.
FACTS
NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...
Anti-Public Adjuster Clause Is Effective in New York
Post number 5301
Read the full article at https://www.linkedin.com/pulse/public-adjusters-attempt-represent-insured-subject-zalma-esq-cfe-rubfc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster
In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.
FACTS
NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...
Proof of Highly Contaminated Water is Required for Extra Payments
Post number 5300
Read the full article at https://www.linkedin.com/pulse/acting-your-own-lawyer-foolish-barry-zalma-esq-cfe-mbg0c, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
Acting as Your Own Lawyer is Foolish
Evidence of Breach of Contract Survives Dismissal of All Other Charges
In Lee Lifeng Hsu and Jane Yuchen Hsu v. State Farm Fire And Casualty Company, C. A. No. N24C-09-020 CLS, Superior Court of Delaware (February 27, 2026) a claim to State Farm who paid approximately $61,000 after assessments but denied coverage for additional items including ceramic tiles, the kitchen floor ceiling, underlayment plywood, and numerous personal property items resulted in suit by the Hsu’s acting in pro per.
Facts
Lee Lifeng Hsu and Jane Yuchen Hsu (“Plaintiffs”) purchased a homeowners’ insurance policy from State Farm Fire...
Insurance Condition Requires Following the Intent of the Parties
Post number 5307
Principles of Contract Interpretation Compels Reading Contract as Written
Read the full article at https://www.linkedin.com/pulse/portable-storage-containers-buildings-barry-zalma-esq-cfe-fkg1c and at https://zalma.com/blog.
In Eastside Floor Supplies, Ltd. v. SCS Agency, Inc., Hanover Insurance Company, et al., No. 2024-01501, Index No. 609883/19, 2026 NY Slip Op 01488, Supreme Court of New York, Second Department (March 18, 2026)
In May 2019, a fire damaged business personal property belonging to the plaintiffs, which was stored in portable storage containers at their Manhattan premises. At the time of the fire, the plaintiffs were insured under a businessowners insurance policy (BOP) issued by the defendant Hanover Insurance Company which provided general coverage for business personal property, and which included a specific extension for “Business Personal Property Temporarily in Portable Storage Units” (the portable storage ...
ERISA Saves Fraudulent Claims Suit
Post number 5306
Read the full article at https://www.linkedin.com/pulse/failure-provide-well-pled-facts-defeats-most-action-zalma-esq-cfe-b4zuc and at https://zalma.com/blog plus more than 5300 posts.
Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity
In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.
FACTUAL BACKGROUND
United and Oxford, who administer both ERISA and ...
ERISA Saves Fraudulent Claims Suit
Post number 5306
Read the full article at https://www.linkedin.com/pulse/failure-provide-well-pled-facts-defeats-most-action-zalma-esq-cfe-b4zuc and at https://zalma.com/blog plus more than 5300 posts.
Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity
In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.
FACTUAL BACKGROUND
United and Oxford, who administer both ERISA and ...
