Flat Rock Metal, Inc. et al v. AssuredPartners of Michigan, LLC et al

Filing 52

ORDER Granting in Part and Denying in Part Defendant AssuredPartners of Michigan, LLC's 38 Motion for Summary Judgment. Signed by District Judge Matthew F. Leitman. (HRya)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FLAT ROCK METAL, INC., et al.,
Plaintiffs,
Case No. 23-cv-11063
Hon. Matthew F. Leitman

v.
ASSUREDPARTNERS OF
MICHIGAN, LLC, et al.,

Defendants.
__________________________________________________________________/
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT
ASSURED PARTNERS OF MICHIGAN, LLC’S MOTION FOR
SUMMARY JUDGMENT (ECF No. 38)
In 2019, AssuredPartners of Michigan, LLC (“Assured”) procured for Flat
Rock Metal, Inc. and Bar Processing Corporation (collectively, “Flat Rock”) a
liability insurance policy (the “Policy”) issued by Federal Insurance Company
(“Federal”). According to Flat Rock, Assured promised to help Flat Rock notify
Federal when and if third parties asserted claims against Flat Rock that were covered
under the Policy. In this action, Flat Rock alleges that Assured breached this
contractual obligation and that, as a result, Flat Rock lost out on coverage that should
have been available under the Policy for a covered claim. (See Compl. at ¶¶ 42-43,
ECF No. 1-1, PageID.21.) Flat Rock also brings a negligence claim against Assured.

1

Assured has filed a motion for summary judgment on both of Flat Rock’s
claims. (See Mot., ECF No. 38.) For the reasons explained below, the motion is
GRANTED IN PART and DENIED IN PART.
I
A
Flat Rock is a Michigan steel processing company located in Flat Rock,
Michigan. (See id. at ¶ 1, PageID.15.) Assured is an insurance agent licensed to do
business in Michigan. (See id. at ¶ 8, PageID.16.) For many years, Flat Rock
purchased insurance policies through Assured. (See Dep. of Jennifer Bellard at
125:22-127:6, ECF No. 41-1, PageID.1798-1799.)
Assured’s relationship with Flat Rock was not limited to procuring insurance
policies. In addition to procuring policies, Assured would assist Flat Rock in
notifying Flat’s Rock’s insurance carriers when a covered claim was lodged against
Flat Rock during the term of a policy that Assured had procured for Flat Rock. As
Jennifer Bellard, Flat Rock’s human resources manager, explained, when Flat Rock
received notice of a covered “event,” Flat Rock would “pick up the phone and call”
Assured, and Assured “would then notify the carrier” who issued the policy about
the event. (Id. at 126:15-24, PageID.1799.) Bellard said that this was the “custom
and practice” of the parties throughout their “long-term relationship.” (Id. at 126:11127:2.)

2

Assured employee Cindy Curto, whom Assured designated as its corporate
representative under Rule 30(b)(6) of the Federal Rules of Civil Procedure, echoed
Bellard’s description of the parties’ custom and practice. Curto testified that under
the parties’ usual practice, Flat Rock would inform Assured when a claim had been
made against Flat Rock, and Assured would then “submit” the claim to the carrier
on Flat Rock’s behalf:
The insured would probably call . . . and say, “I have a
claim.” And then there would be instruction from . . . the
claim representative possibly that would say, “Okay, send
us the information,” or we’ll write it down and submit it.
And we do.
(Dep. of Cindy Curto at 45:10-24, ECF No. 41-14, PageID.2230.) She later added
that when an insured “call[s] us and report[s a] claim, then we have a duty to give it
to [the carrier].” (Id. at 90:6-10, PageID.2241.)
B
In April of 2019, Flat Rock engaged Assured to procure a commercial liability
insurance policy from Federal. (See Compl. at ¶¶ 6-10, ECF No. 1-1, PageID.1617.) Assured then procured the Policy. (See id. at ¶ 10.) The term of the Policy ran
from April 22, 2019 through February 1, 2020 (the “Policy Period”). (See Policy,
ECF No. 38-2, PageID.1008.) The Policy provided “claims made” coverage, and it
identified two types of covered claims: “Employment Claims” and “Third Party

3

Claims.” (See id., PageID.1046-1047.) This case concerns an alleged Employment
Claim; the Policy provisions concerning Third Party Claims are not relevant.
“Employment Claim” is a defined term under the Policy. As relevant here,
such a claim includes an:
(e)

administrative, regulatory or tribunal proceeding
commenced by:
(i)

the issuance of a notice of charge, formal
investigative order or other similar
document; or

(ii)

in the event the Insured is not issued notice as
set forth in (e)(i) above, the receipt by an
Insured of the administrative, regulatory or
tribunal proceeding resulting from such
notice of charge, formal investigative order
or other similar document,

Including any such proceeding brought by or in
association with the Equal Employment
Opportunity Commission or any similar
governmental agency located anywhere in the world
with jurisdiction over the Organization’s
employment practices[.]
(Id., PageID.1048.)
The Policy also has a notice provision that specifically applies to an
Employment Claim “that is brought as a formal administrative or regulatory
proceeding commenced by the filing of a notice of charges[.]” (Id. at § IV(B),
PageID.1055.) When such a claim arises, the “Insured” (Flat Rock) must provide
“written notice” of the claim to Federal in order to exercise its right to coverage for
4

the claim. (Id.) The written notice must include certain basic information about the
Employment Claim, including:
[S]uch information, assistance and cooperation as the
Company may reasonably require and shall include in any
notice [of Claim, Employment Claim, or Potential Claim]
a description of the Claim, request or Potential Claim, the
nature of any alleged Wrongful Act, the nature of the
alleged or potential damage, the names of all actual or
potential claimants, the names of all actual or potential
defendants, [and] the manner in which such Insured first
became aware of the Claim, Potential Claim, or alleged
Wrongful Act[.]
(the “Required Written Notice”). (Id. at § IV(D), PageID.1056.) The Required
Written Notice must be provided within a limited time period: either “during the
Policy Period,” or, if the Policy “is renewed,” then not more than “365 days after the
end of the Policy Period.” (Id. at § IV(B), PageID.1055; Endorsement/Rider No. 10,
ECF No. 38-5, PageID.1388.)
One last Policy provision concerning notice of an Employment Claim is
relevant to this action. That provision states that notice of an Employment Claim by
an insured made to a licensed agent of Federal in the State of Michigan is deemed
notice to Federal “provided that such notice is given in accordance with the terms
and conditions” of the Policy’s reporting provisions. (Endorsement/Rider No. 7,
ECF No. 38-5, PageID.1382.) It is undisputed that Assured was a licensed agent for
Federal in Michigan. (See Coverage Denial, ECF No. 38-9, PageID.1716.)

5

C
In “late May” 2019, Bellard received a call from the Michigan Department of
Civil Rights (the “MDCR”) notifying her that Flat Rock should “be expecting a
notification in the mail for a claim of discrimination from Adel Aridi,” one of Flat
Rock’s employees (the “Aridi Charge”). (Bellard Dep. at 34:9-35:4, ECF No. 41-1,
PageID.1776.) After receiving the call from the MDCR, Bellard emailed Jeff
Ferguson, an Assured employee, to tell him about the call. She wrote: “I received a
phone call today, we have a complaint from the [MDCR] opened against us for the
BPC Monroe facility, the complaint is being mailed to us today.” (05/28/2019
Bellard Email, ECF No. 38-6, PageID.1520.)
The parties offer sharply differing accounts of what happened next. Bellard
says that she called Ferguson and orally provided him with additional information
about the MDCR complaint. (Bellard Dep. at 40:19-42:18, PageID.1777-1778.) She
reports that during that call, she told Ferguson that “Adel Aridi was claiming . . .
harassment and discrimination in the workplace,” and she says that she gave
Ferguson “the names of all the actual claimants and defendants[.]” (Id.) Bellard also
told Ferguson that Flat Rock was expecting to receive a written copy of the Aridi
Charge “in the mail.” (Id. at 40:20-25.)
Ferguson denies that the call described by Bellard ever occurred, and he insists
that neither Bellard nor anyone else from Flat Rock ever provided any details about

6

the MDCR charge beyond those in Bellard’s email. In Ferguson’s words: “Neither
Jennifer Bellard nor any other Flat Rock representative provided me or
AssuredPartners, either verbally or in writing, any additional information or details
about the complaint concerning [Flat Rock’s] BPC Monroe facility that Jennifer
Bellard referenced in her May 28, 2019 email.” (Ferguson Aff. at ¶ 9, ECF No. 382, PageID.992.)
But it is undisputed that on June 5, 2019, Bellard emailed Ferguson to ask for
a list of attorneys Flat Rock could hire for “the employment issue.” (06/05/2019
Bellard Email, ECF No. 38-6, PageID.1535.) Ferguson responded the same day and
forwarded a list of Federal-approved attorneys. (See 06/05/2019 Ferguson Email,
ECF No. 38-6, PageID.1534.) In the same email, Ferguson asked Bellard to send
him a copy of the Aridi Charge “so that [Assured could] get it filed” with Federal.
(Id.) Ferguson also said: “Remember, we can file for ‘Records Only’ too.”1 (Id.)
Even though Ferguson told Bellard that Flat Rock and Assured could file a
“Records Only” notice concerning the Aridi Charge with Federal, Ferguson now
says that he was “unable” to do so because Bellard had not given him “any
information” about the Aridi Charge. (Ferguson Aff. at ¶ 12, ECF 38-2,
PageID.993.) However, as noted above, Bellard insists that she gave Ferguson
several details concerning the Aridi Charge.

1

Ferguson never explained what he meant by a “Records Only” filing.
7

D
On June 17, 2019, Bellard emailed Ferguson and told him that Flat Rock
would like to use the law firm of Clark Hill to handle the Aridi matter. (See Bellard
Email, ECF No. 38-6, PageID.1534.) That same day, Ferguson responded and
reminded Bellard that Assured still “d[id] not have” a copy of the Aridi Charge.
(06/17/2019 Ferguson Email, ECF No. 38-6, PageID.1534.) He asked her to
“forward” the Aridi Charge to him “so that [Assured] can notify [Federal] and [Clark
Hill].” (Id.) Bellard responded that she had not yet received the Aridi Charge. (See
06/17/2019 Bellard Email, ECF No. 38-6, PageID.1532.)
Also on June 17, 2019, Bellard received an email from Clark Hill attorney
David Cessante informing Bellard that Clark Hill would be representing Flat Rock
in connection with the Aridi Charge. (See 06/17/2019 Cessante Email, ECF No. 386, PageID.1504.)
E
Bellard finally received the Aridi Charge on July 18, 2019. (See Bellard Dep.
at 42:23-24, ECF No. 41-1, PageID.1778; see also 07/19/2019 Bellard Email, ECF
No. 38-6, PageID.1503.) Bellard did not send the Aridi Charge to Assured. (See
Bellard Dep. at 108:24-109:20, PageID.1794.) She believed that she did not need to
do so because, as described above, it had been the past practice between the parties
that Assured would “notify” a carrier of a claim once Flat Rock provided oral notice

8

of the claim by phone – as she believed she had done. (See id. at 126:20-24,
PageID.1799.)
Instead of sending the Aridi Charge to Assured or Federal, Bellard sent it to
Cessante. (See 07/19/2019 Bellard Email, ECF No. 38-6, PageID.1503.) Cessante
thereafter prepared and sent Flat Rock’s position statement and response to the
MDCR. (See MDCR Response, ECF No. 41-2, PageID.1908-1917.)
F
On February 4, 2020, Flat Rock renewed the Policy and extended its coverage
through February 1, 2021. (See Policy Renewal, ECF No. 38-8, PageID.1552.)
Because Flat Rock renewed the Policy, the Required Written Notice with respect to
the Aridi Charge was due not later than February 1, 2021 – 365 days after the
expiration of the Policy Period. (See Policy, ECF No. 38-2, PageID.998.)
Flat Rock did not send that Required Written Notice directly to Federal by
that deadline. Assured likewise did not send the Required Written Notice to Federal
on Flat Rock’s behalf by the deadline.
G
Aridi eventually filed an employment discrimination action against Flat Rock
in a Michigan state court (the “Aridi Lawsuit”). (See Aridi Lawsuit, ECF No. 38-7.)
On January 20, 2022 – 353 days after the expiration of the period to report an
Employment Claim under the Policy – Bellard emailed to Assured a copy of the

9

Complaint in the Aridi Lawsuit along with a request that Assured “push” the matter
“through” to Federal and “file an extension immediately.” (01/20/2022 Bellard
Email, ECF No. 41-7, PageID.2124.) The next day, Bellard sent the Aridi Charge
to Assured. (See 01/21/2022 Bellard Email, ECF No. 38-6, PageID.1503.) Assured
thereafter sent the Aridi Charge and the Complaint in the Aridi Lawsuit to Federal.
(See Notice of Claim, ECF No. 38-6, PageID.1497; Aridi Complaint, ECF No. 387; Mot. for Summ. J., ECF No. 38, PageID.969.)
On February 14, 2022, Federal denied Flat Rock coverage for the Aridi
Lawsuit on the basis that Assured had failed to timely provide the Required Written
Notice:
This Claim was first made on July 2, 2019 upon issuance
of the Notice of Charge of Discrimination. The Company
has reviewed correspondence between Flat Rock Metal,
Inc. and AssuredPa[r]tners from May and June 2019
referring to a complaint from the dept. of civil rights and
requesting a list of panel attorneys. Unfortunately, the
correspondence does not include information sufficient to
satisfy [the Required Written Notice provision] and the
Company is unable to accept the correspondence with
AssuredPartners as notice of a Claim to a licensed agent
of the Company. Consequently, notice of this Claim was
not provided to the Company until January 24, 2022,
nearly two years after the expiration of the applicable
Policy Period, and nearly one year after the end of the 365
day period following the expiration of the applicable
Policy Period. Accordingly, as the condition precedent to
coverage of notice to the Company during the Policy
Period, or, in no event later than 365 days after the end of
the Policy Period has not been met, we must deny
coverage for this matter, in its entirety, under the
10

[Employment Practices Liability Coverage] Part of the
Policy.
(Coverage Denial, ECF No. 38-9, PageID.1716.)
After Federal denied coverage, Brent Everingham, an Assured employee who
was then handling Flat Rock’s account, wrote to Federal in an effort to persuade
Federal to reconsider. (02/16/2022 Everingham Email, ECF No. 41-11,
PageID.2213.) Everingham highlighted, among other things, that there had been
communication between Flat Rock and Assured before the deadline for submitting
the Required Written Notice:
We understand the reasoning behind the denial given
[Federal] is citing late reporting (over 365 days[)];
however, we do feel that there was communication
between the insured and our Agency on the claim and it
appears this communication was done in a timely manner.
Now, I understand the position being taken is that the
insured was not clear in the communication in stating a
claimant[’]s name and I also understand that there was no
EEOC complaint provided to us (at least to my
knowledge). I would also ask Chubb that we look at the
client[’]s past history when it comes to claim reporting and
based on my experience and from what I can gather in our
agency notes, they have complied with the reporting terms
on all claims. Again, I am not sure what happened on this
particular claim but based on what we have provided in
terms of communication and the attached communication,
we feel this should be enough to revisit the claim for the
insured.
(Id.) Notwithstanding Everingham’s efforts on Assured’s behalf, Federal stood by
its denial.

11

H
Flat Rock ultimately settled with Aridi. (See 11/04/2024 Mot. Hr’g Tr., ECF
No. 47, PageID.2353.) The total amount of the settlement plus the legal fees that
Flat Rock paid to Clark Hill is somewhere between $150,000.00 to $275,000.00 (See
id.; see also Pl.’s Supp. Br., ECF No. 46, PageID.2309.)
I
On April 5, 2023, Flat Rock filed a Complaint against Assured and Federal in
the Wayne County Circuit Court. (See Compl., ECF No. 1-1, PageID.15.) The
Complaint asserted three claims. (See id.)
In the first claim, Flat Rock alleged that Federal breached the Policy by
declining to defend and indemnify Flat Rock in connection with the Aridi Lawsuit.
(See id. at ¶ 28, PageID.19.)
In the second claim, Flat Rock alleged that Assured breached an express or
implied-in-fact contract under which Assured had agreed to “provide [Federal] with
all information . . . it received from [Flat Rock] concerning” the Aridi Charge. (Id.
at ¶ 39, PageID.21.) According to Flat Rock, when Ferguson received Bellard’s oral
telephonic report about the Aridi Charge, Assured was obligated to “complete[] a
claim form” concerning the Charge and to “submit[]” that form to Federal on Flat
Rock’s behalf. (Pl.’s Supp. Br., ECF No. 46, PageID.2310.) Flat Rock says that

12

Assured’s failure to do so caused Flat Rock to lose out on coverage for the Aridi
Charge that was available under the Policy. (See id.)
Finally, in the third claim, Flat Rock alleged that Assured negligently
breached its duty to report the Aridi Charge to Federal. (Id. at ¶ 34, PageID.19-20.)2
Flat Rock says that the breach of that duty caused Flat Rock to miss out on coverage
under the Policy. (See id. at ¶ 36.)
On May 5, 2023, Assured removed the action to this Court. (See Notice of
Removal, ECF No. 1.) After the close of discovery, Federal and Assured both
moved for summary judgment. (See Mots. for Summ. J., ECF Nos. 37, 38.)
Federal argued that it was entitled to summary judgment on Flat Rock’s
breach of contract claim because Flat Rock failed to timely provide the Required
Written Notice of the Aridi Charge to Federal or to Assured and, therefore, Flat Rock
was not entitled to a defense or indemnification under the Policy. (See Mot., ECF
No. 37.) In making that argument, Federal emphasized that Bellard’s emails to
Assured did not contain the Required Written Notice. (See id., PageID.690.) Federal
added that while Bellard may have orally provided additional information in her
phone calls with Ferguson, the calls were insufficient because the Policy “require[d]
2

In the Complaint, Flat Rock identified additional duties that it said Assured
breached. But in its response to Assured’s motion for summary judgment, Flat Rock
defended its negligence claim solely to the extent that the claim was based on
Assured’s alleged duty to report the Aridi Charge to Federal. (See Am. Resp., ECF
No. 41, PageID.1759-60.)
13

written notice.” (Id., PageID.691; emphasis in original.) At the hearing on Federal’s
motion, Flat Rock’s counsel conceded that under controlling Michigan precedent,3
Federal was entitled to judgment as a matter of law on the grounds advanced in its
motion. (See 11/04/2024 Mot. Hr’g Tr., ECF No. 47, PageID.2318-2319.) For that
reason, and for the reasons stated in Federal’s motion, the Court granted Federal’s
motion for summary judgment. (See Order, ECF No. 45.)
Assured argued that it was entitled to summary judgment on Flat Rock’s
breach of contract claim because its only contractual obligation was to send the Aridi
Charge to Federal once it received the Aridi Charge from Flat Rock, and Assured
contended that it fulfilled that obligation in January of 2022 when it first received
the Aridi Charge from Bellard. (See Mot., ECF No. 38, PageID.985.) Assured made
another argument in an additional round of briefing requested by the Court. It
contended that even if, as Flat Rock alleged, it (Assured) was obligated to tell
Federal about Bellard’s May 2019 oral report to Ferguson, its alleged breach of that
obligation did not injure Flat Rock because Federal would not have been obligated
to defend and indemnify Flat Rock even if Assured had passed along Bellard’s oral
report. (See Def.’s Supp. Br., ECF No. 48, PageID.2400-2401.) The Court is now
ready to rule on Assured’s motion.

3

See Defrain v. State Farm Mut. Auto Ins. Co., 817 N.W.2d 504 (Mich. 2012).
14

II
Assured seeks summary judgment under Rule 56 of the Federal Rules of Civil
Procedure. Under that rule, a movant is entitled to summary judgment when it
“shows that there is no genuine dispute as to any material fact.” SEC v. Sierra
Brokerage Servs., Inc., 712 F.3d 321, 326-27 (6th Cir. 2013) (quoting Fed. R. Civ.
P. 56). When reviewing the record, “the court must view the evidence in the light
most favorable to the non-moving party and draw all reasonable inferences in its
favor.” Id. But “the mere existence of a scintilla of evidence in support of the [nonmoving party’s] position will be insufficient; there must be evidence on which the
jury could reasonably find for [that party].” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 252 (1986). Summary judgment is not appropriate when “the evidence
presents a sufficient disagreement to require submission to a jury.” Id. at 251–52.
III
A
The Court begins with Flat Rock’s breach of contract claim. “Under Michigan
law, the elements of a breach of contract claim are the following: (1) a contract
existed between the parties, (2) the terms of the contract required performance of
certain actions, (3) a party breached the contract, and (4) the breach caused the other
party injury.” Green Leaf Nursery, Inc. v. Kmart Corp., 485 F.Supp.2d 815, 818
(E.D. Mich. 2007).

15

In order to resolve Flat Rock’s contract claim, the Court must interpret and
apply two separate contracts: the Policy and the alleged implied-in-fact contract
between Assured and Flat Rock. When interpreting the Policy, the Court must
follow “the same contract construction principles that apply to any other species of
contract.” Rory v. Cont’l Ins. Co., 703 N.W.2d 23, 26 (Mich. 2005).

Those

principles require the Court to “apply unambiguous contract provisions as written.”
Id.
As to Flat Rock’s contract with Assured, Flat Rock contends that that contract
was implied-in-fact. (See Resp., ECF No. 41, PageID.1757-1758.) Such a contract
“arises between parties when those parties show a mutual intention to contract.”
Kingsley Assocs., Inc. v. Moll PlastiCrafters, Inc., 65 F.3d 498, 504 (6th Cir. 1995).
And “the terms of [an implied] agreement will be determined by [the parties’]
conduct or other pertinent circumstances surrounding the transaction.” Id.
B
As noted above, Flat Rock alleges that Assured breached an implied-in-fact
contract that required Assured to “provide [Federal] with all information . . . it
received from [Flat Rock] concerning” the Aridi Charge. (Compl. at ¶ 39, ECF No.
1-1, PageID.21.) More specifically, Flat Rock contends that Assured breached the
parties’ contract when it (Assured) failed to give Federal written notice of the
information about the Aridi Charge that Bellard orally reported to Ferguson during

16

their telephone conversation in May of 2019. (See Pl.’s Supp. Br., ECF No. 46,
PageID.2309-2310.)
Assured contends that it is entitled to summary judgment on this claim
because Flat Rock cannot show that (1) the terms of the contract are those alleged
by Flat Rock or (2) Flat Rock suffered an injury as a result of Assured’s alleged
breach. For the reasons explained below, the Court disagrees.
1
Assured first argues that Flat Rock has the terms of the alleged contract wrong.
According to Assured, any alleged agreement between itself and Flat Rock was
necessarily “qualified by the terms of the Policy.” (Mot., ECF No. 38, PageID.984.)
And Assured insists that, as “qualified” by the Policy, the agreement between itself
and Flat Rock could only have been “that if and when [Flat Rock] forwarded the
written Aridi Charge, [Assured] would report the Employment Claim to [Federal].”
(Id., PageID.985; emphasis in original.) In other words, Assured says that it had no
obligation to report anything to Federal about the Aridi Charge unless and until it
received the actual written charge from Flat Rock.
But there is evidence to the contrary in the record. As noted above, Bellard
testified that Assured would provide notice to Flat Rock’s insurance carriers based
only on a phone call from Flat Rock. (See Bellard Dep. at 126:11-24, ECF No. 411, PageID.1799.) And Curto likewise testified on Assured’s behalf that under the

17

parties’ custom and practice, Flat Rock would at times call to orally report a claim,
and Assured would then “write it down and submit it.” (Curto Dep. at 45:18-24, ECF
No. 41-14, PageID.2230.) Moreover, Curto’s testimony is in tension with Assured’s
current contention that it had no obligation to tell Federal about the Aridi Charge
until it received the actual charge from Flat Rock. Curto testified that Assured was
obligated to report a claim on Flat Rock’s behalf when Assured had been given
“enough information” about the claim (id. at 90:7-12, PageID.2241), and she
explained that Assured did not tell Federal about the Aridi Charge in 2019 “[b]ecause
[Assured] never got all the information to file the official claim in 2019.” (Id. at
103:7-12, PageID.2244; emphasis added.) Notably, Curto did not say, as Assured
says now, that Assured was only obligated to notify Federal of a claim against Flat
Rock if and when Assured received a copy of the Aridi Charge from Flat Rock.
Further, there is nothing in the Policy that says an Insured (or a representative
of an Insured) must wait to notify Federal of an Employment Claim until it actually
receives a written copy of the administrative order or notice underlying the claim.
The language of the Policy actually indicates the opposite. Under the Policy, an
Employment Claim arises when an administrative order or notice relating to a charge
of discrimination is “issu[ed]” – not when it is received by an Insured. (Policy, ECF
No. 38-2, PageID.1048.) Since the Policy plainly permits an Insured to report an
Employment Claim that has come into existence, it follows that an Insured (or its

18

representative) may report such claim at any time after an administrative order or
notice charging discrimination is issued – even if the Insured (or its representative)
does not yet have a copy of the order or notice.
For all of these reasons, the Court concludes that there is, at a minimum, a
factual dispute as to whether the parties’ contract required Assured to report the Aridi
Charge to Federal before Assured received a written copy of the charge.
2
Assured next argues that Flat Rock could not have suffered an injury as a
result of Assured’s failure to inform Federal about Bellard’s oral report to Ferguson.
Assured’s argument proceeds in the following steps:
Step 1: Federal’s obligations under the Policy are triggered only
if Flat Rock provides written timely notice of an Employment Claim.
Step 2: Under the Policy, an Employment Claim does not come
into existence unless and until an administrative agency has
commenced proceedings by issuing a document such as a notice or
order.
Step 3: When Bellard made her oral report to Ferguson in May
or June of 2019, no administrative agency had yet issued any notice or
order commencing proceedings related to the Aridi Charge. (The
Notice of Discrimination related to the Aridi Charge was issued on July
2, 2019.) Thus, there was no existing Employment Claim related to the
Aridi Charge at the time of Bellard’s oral report to Ferguson.
Step 4: Since there was no existing Employment Claim at the
time of Bellard’s oral report, even if Ferguson had communicated
Bellard’s report to Federal in writing, that written communication to
Federal could not have been notice of an Employment Claim.

19

Step 5: Therefore, Federal’s coverage obligations under the
Policy would not have been triggered even if Ferguson had sent a
written communication to Federal conveying the information provided
by Bellard.
Step 6: Thus, Ferguson’s failure to communicate Bellard’s oral
report to Federal did not cause Flat Rock to lose out on coverage that
otherwise would have been available to Flat Rock under the Policy.
(Def.’s Supp. Br., ECF No. 48, PageID.2387-2395.)
This is a serious argument. But it appears to be in tension with Federal’s own
application of the Policy’s notice provisions. Indeed, the denial letter issued by
Federal can reasonably be read to imply that that written notice of the Aridi Charge
could have been sufficient to trigger its coverage obligations even if the notice had
been provided before an administrative agency issued a notice or order commencing
proceedings related to the charge – i.e., before an Employment Claim technically
arose under the Policy. In the denial letter, Federal recognized that the Employment
Claim related to the Aridi Charge was “made on July 2, 2019 upon the Notice of
Charge of Discrimination.” (Coverage Denial, ECF No. 38-9, PageID.1716.)
Federal then addressed whether Bellard’s emails “from May and June 2019”
constituted sufficient notice of that claim under the Policy. (Id.) Federal said that
those emails collectively did not constitute sufficient notice because they did not
contain “information sufficient to satisfy” the Required Written Notice provision of
the Policy. But Federal did not say that the emails were insufficient because they
were sent before the Employment Claim was first made. And that omission could
20

reasonably be regarded as significant because the general rule under Michigan law
is that “once an insurance company has denied coverage to an insured and stated its
defenses, the company has waived or is estopped from raising new defenses.”
Haddock v. State Farm Fire & Cas. Co., 638 F. Supp. 3d 748, 762, n.7 (E.D. Mich.
2022) (quoting South Macomb Disposal Auth. v. American Ins. Co., 572 N.W.2d
686, 712-713 (Mich. Ct. App. 1997)). As a sophisticated insurance company,
Federal was presumably well aware of this general rule and could reasonably be
expected to have drafted its denial letter with the rule in mind. Under these
circumstances, it would be reasonable to infer from the denial letter that Federal
would have accepted written notice from Flat Rock even if it had been provided
before the Employment Claim formally arose.
Moreover, Ferguson seems to acknowledge in his affidavit that he could have
provided what he calls “Records Only” notice to Federal even before the
administrative proceedings relating to the Aridi Charge formally began. (Ferguson
Aff. at ¶ 12, ECF No. 38-2, PageID.993.) It is not clear to the Court that such notice
would have been insufficient as a matter of law to trigger Federal’s coverage
obligations under the Policy.
Finally, Curto, as Assured’s designated representative, never suggested during
her deposition that notice by Assured to Federal of Bellard’s oral report would have
been insufficient under the Policy because no Employment Claim was yet in

21

existence. (See Curto Dep., ECF No. 41-14.) Instead, as described above, she
seemed to implicitly acknowledge that Assured would have and could have given
effective notice to Federal in May or June of 2019 – before the Employment Claim
arose – if only Bellard had provided sufficient information about the Aridi Charge.
For all of these reasons, the Court cannot conclude, as a matter of law, that
Assured’s failure to give Federal written notice of Bellard’s oral report could not
have injured Flat Rock because Bellard made her report before the Employment
Claim arose.
3
Assured offers one additional argument as to why Flat Rock could not have
suffered any injury as a result of its (Assured’s) failure to inform Federal of Bellard’s
oral report. Assured insists that that failure could not have harmed Flat Rock
because, as a matter of law, written notice from Assured to Federal could not satisfy
the Policy’s notice provision. Assured highlights the Policy provision requiring the
“Insured” – Flat Rock here – to provide the Required Written Notice. (See Policy at
§ IV(D), ECF No. 38-2, PageID.1056.) Assured notes that it is obviously not Flat
Rock, and it further insists that it cannot be considered Flat Rock’s agent for the
notice provisions of the Policy. (See Def.’s Supp. Br., ECF No. 48, PageID.2398.)
Assured concludes that since it is neither Flat Rock nor Flat Rock’s representative
for purposes of notice under the Policy, as a matter of law, any written notice that it

22

provided to Federal could not have been effective. (See id.) The Court cannot accept
Assured’s argument because Assured has failed to persuade the Court that it could
not have been Flat Rock’s agent for purposes of notice under the Policy.
Assured offers two arguments as to why it could not have been Flat Rock’s
agent for notice purposes. Both fall short. First, Assured invokes the general rule
under Michigan law that an independent insurance agent like Assured is “a limited
agent for the purpose of procuring the insurance coverage requested,” and for no
other purpose. (See id. at PageID.2396.) But the record in this case contains
evidence that Assured and Flat Rock had an implied-in-fact contract under which
Assured agreed to assist Flat Rock in providing notice to Flat Rock’s insurance
carriers. So, even if an independent insurance agent is generally an agent of an
insured for the sole purpose of procuring coverage, a jury could reasonably find here
that Assured and Flat Rock agreed that Assured’s agency would expand beyond that
task.
Second, Assured argues that the terms of the Policy preclude a finding that
Assured is Flat Rock’s agent for purposes of notice.

Assured highlights the

provision of the Policy stating that notice to Assured (as a licensed agent of Federal
in Michigan) is notice to Federal. Assured says that this provision “appoints”
Assured as Federal’s agent for purposes of reporting claims under the Policy, and

23

Assured insists that it cannot possibly be an agent of Flat Rock for that same purpose.
(See id. at PageID.2396-2398.)
This argument admittedly has some logical force, but Assured has not
persuaded the Court that, as a matter of law, it could not have been an agent for both
Flat Rock and Federal with respect to notice under the Policy. A decision on which
Assured relies, Remar v. Trumbley, No. 242779, 2003 WL 21278905 (Mich. Ct.
App. June 3, 2003), seems to suggest that Assured could have been an agent for both
parties. Remar involved an insured named Catherine Trumbley who had utilized the
services of an independent insurance agent, the Madigan-Pingatore Agency, to
procure a liability policy from Citizens Insurance Company of America. See id. at
*1. The policy in that case, like the Policy here, provided that if the insured gave
notice of a claim to an “authorized agent” of Citizens, that would be deemed notice
to Citizens. Id. The “first issue” in the case was “whether Madigan-Pingatore was
the ‘authorized agent’ of Citizens for purposes of receiving notice of a claim and
notice of a lawsuit.” Id. The Michigan Court of Appeals held that there was “a
genuine issue of material fact as to whether Madigan-Pingatore was an agent of
[Trumbley], Citizens, or possibly a dual agent.” Id. at *2 (emphasis added). That
holding suggests that even where an insurance policy designates an independent
insurance agent as an agent of the carrier for the notice provisions of a policy, the
independent agent may also be an agent of the insured for that same purpose. As in

24

Remar, on this record, there is a material dispute of fact as to whether Assured was
an agent for both Flat Rock and Federal with respect to notice under the Policy. See
also Estate of Morse ex rel. Morse v. Titan Ins. Co., No. 309837, 2014 WL 3971438,
at *5 (Mich. Ct. App. Aug. 14, 2014) (explaining that “whether an agent was acting
as an agent for both the insured and the insurer has occasionally been deemed a
question of fact.”).
Furthermore, Assured has not yet persuaded the Court that it is impossible to
reconcile its (Assured’s) role as Federal’s agent for purposes of notice with the
notion that it could also be Flat Rock’s agent for that same purpose. Simply put, it
seems that two things could be true at the same time: (1) Assured could accept
written notice from Flat Rock under the Policy on behalf of Federal and (2) Assured
could alternatively act on behalf of Flat Rock and provide written notice of claim to
Federal after Flat Rock provided oral notice of a claim to Assured. In short, it is not
necessarily illogical to conclude that there could be two routes to effective notice
under the Policy: route one is written notice from Flat Rock to Assured and route
two is written notice from Assured, acting on behalf of Flat Rock, directly to
Federal.4

4

While the Policy does provide that notice must be given by the Insured, the Court
sees no reason why such notice could not come from someone designated to act on
behalf of the Insured. For instance, it would seem obvious that an attorney for an
Insured could provide effective written notice on behalf of the Insured under the
25

4
Assured’s final argument is that the Court must grant its motion for summary
judgment because the Court granted Federal’s motion for summary judgment. (See
Def.’s Supp. Br., ECF No. 48, PageID.2400-2401.) The Court disagrees. Federal’s
motion presented a different and narrower issue: whether Bellard’s oral report to
Ferguson constituted sufficient notice to Federal. It did not. But the questions here
include (1) whether, after Ferguson received Bellard’s oral report, Assured was
obligated to reduce that report to writing and submit it to Federal as written notice
of the Aridi Charge and (2) whether Assured’s failure to do so injured Flat Rock.
The Court’s decision on Federal’s motion does not compel an answer either way on
these questions.
C
For all of the reasons explained above, Assured is not entitled to summary
judgment on Flat Rock’s breach of contract claim.
IV
In the alternative to its breach of contract claim, Flat Rock also brought a
negligence claim in which it alleges that Assured negligently breached its duty to
report the Aridi Charge to Federal. (See Compl., ECF No. 1-1.) “Under Michigan

Policy. It seems that a duly designated agent other than an attorney should similarly
be able to provide notice on the Insured’s behalf.
26

law, there are four elements of a claim for negligence: duty, breach, causation, and
damages.” Cleveland Indians Baseball Co., L.P. v. New Hampshire Ins. Co., 727
F.3d 633, 642 (6th Cir. 2013).
Flat Rock’s negligence claim fails as a matter of law because Flat Rock cannot
satisfy the duty element of its claim. As Flat Rock’s counsel properly acknowledged
during the hearing before the Court on Assured’s motion, where a plaintiff and a
defendant are parties to a contract, the plaintiff may maintain a negligence action
against the defendant only if the plaintiff alleges that the defendant breached a duty
independent of duties owed by the defendant under the parties’ contract.5 (See
11/04/2024 Hr’g Tr., ECF No. 47, PageID.2355-2356.) And during the hearing, Flat
Rock’s counsel could not identify any duty of Assured to report the Aridi Charge
that was independent of the duties that Assured allegedly owed under the parties’
implied-in-fact contract. (See id.) Therefore, Flat Rock may not proceed with its
negligence claim.
For these reasons, Assured is entitled to summary judgment on Flat Rock’s
negligence claim.

5

See Hart v. Ludwig, 79 N.W.2d 895, 897 (Mich. 1956) (explaining that for there
to be a viable negligence claim, “[t]here must be some breach of duty distinct from
breach of contract.”).
27

V
For all of the reasons explained above, Assured’s motion for summary
judgment (ECF No. 38) is GRANTED IN PART AND DENIED IN PART. The
motion is GRANTED with respect to Flat Rock’s negligence claim. That claim is
DISMISSED. The motion is DENIED in all other respects.
IT IS SO ORDERED.
s/Matthew F. Leitman
MATTHEW F. LEITMAN
UNITED STATES DISTRICT JUDGE
Dated: January 29, 2025
I hereby certify that a copy of the foregoing document was served upon the
parties and/or counsel of record on January 29, 2025, by electronic means and/or
ordinary mail.
s/Holly A. Ryan
Case Manager
[phone]

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