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Theater group wins appeal after arbitration award against Secura Insurance Co.

After the Theater Group 3, LLC suffered water damage in its basement, it presented a claim o its insurer, Secura.  It was ordered to arbitration, where it prevailed against an argument that the water damage wasn't covered under the policy.  The trial judge upheld the arbitration award when Secura refused to pay, and Secura appealed to the Court of Appeals.  This week, the Court of Appeals upheld the four year old damage claim award.

Secura's argument was that there was no evidence to contadict its defense that water seeped into the basement, and therefore the damage was excluded under the Theater Group's insurance policy.  The high court pointed out, however, that "it was clear" that the water originated with a broken drain line from the icemaker in a storage room.  Although workers had to "dig down" under the floor to repair the pipe, that did constitute unimpeachable proof that the water originated from beneath the ground outside the building.  The insurer also raised several other arguments to the effect that the arbitrator exceeded her authority, that she misinterpreted the law, and that a tenant's lease should not have been admitted into evidence.  The Court found none of these arguments to have merit.  Judge Wilder issued a separate opinion, stressing the insurer's stipulation to transfer the case to arbitration and rejecting the insurer's attempt to set aside the result.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
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