Coverage confusion impairs child's recovery of damages after fall

Laurie Korte, a minor, suffered serious injuries in a fall at Blondie's Entertainment in Wayne County.    The Plaintiff's mother sued FGR Enterprises, LLC, which disclosed in Interrogatory Answers a single insurance policy of $500,000.00 through North Pointe Insurance Company.  NPIC, however, denied the coverage and the Plaintiffs agreed to resolve their claims against FGR in return for an assignment of FGR's claim against the insurer, NPIC.  Later, however, the parties learned that there was coverage applicable to the premises under a policy issued by Grange Insurance Company to "The Realty Company."  The injured child's attorney asked the Court to rescind the agreement dismissing FGR from the lawsuit, since it was based on a material misrepresentation by FGR of the applicable coverage.

The trial judge agreed and rescinded the parties' assignment agreement.  The Court of Appeals overturned the decision, however, and held that since it was true that "the defendant" [FGR] had only the one policy, it was not guilty of any misrepresentation.  The attorney for the girl had asked the wrong question, according to the Court:  it should have asked whether there was any other coverage for the incident.  Since the Plaintiff didn't ask the right question, the Defendant was free to enforce the agreement--even though it precluded the injured girl from making a claim against the existing insurance coverage.