Lessor Deemed Additional Insured and Entitled to Coverage

    The Michigan Court of Appeals determined that the lessor of a marina was an additional insured under the lessee's policy and entitled to coverage for a wrongful death claim. Auto-Owners Ins. Co. v. JROC Inc., 2024 Mich. App. LEXIS 7053 (Mich. Ct. App. Sept. 12, 2024).    

    Jill Parrinello and Darrin Gabbard arrived at the Sand Bar Grille after 11 p.m. on August 16, 2019. The bar was located on the premises of the Safe Harbor Marina. The two sat at the bar and had 2-3 beers each. They left a little after 1:00 a.m. Thereafter, they both went missing.

    Approximately one week later, the policy discovered Parrinello's vehicle at the bottom of the waterway channel. Both Parrinello an Gabbard were pronounced dead. Parrinello's estate filed a premises liability claim against JROC, Inc., doing business as the Sand Bar Grill, SHM Toledo Beach LLC and Safe Harbor Marina LLC. Defendants SHM Toledo Beach LLC and Safe Harbor Marinas (collectively the Marina defendants) filing a cross-claim against JROC, alleging breach of a commercial lease and seeking indemnification for any damages arising from the failure to comply with the lease agreement.

    Auto-Owners was JROC's insurer and filed a complaint for declaratory judgment, seeking a declaration that the Marina defendants were not covered by the policy issued to JROC. The Marina defendants moved for summary judgment alleging they were additional insureds under JROC's policy because Parrinello's death arose out of the use of the portion of the premises leased to JROC given that Parrinello's sole purpose for being at the marina was to patronise the Sand Bar Grille. 

    Auto-Owners argued in response that the Marina defendants were not additional insureds because the underlying litigation did not relate to the ownership, maintenance, or use of an part of the premises that had been leased to JROC. Without additional insured status, Auto-Owners requested a summary judgment against the Mariana defendants. The trial court granted summary judgment to the Marina defendants.

    The lease required JROC to name the Marina defendants as additional insureds. The policy identified additional insureds as any person or organization with whom the insured had agreed in a written agreement to name as an additional insured, "but only with respect to liability arising out of the ownership, maintenance, or use of that part of the premises leased to you." 

    The court focused on the phrase "liability arising out of the . . . use of that part of the premises leased to" JROC. Use of the phrase "arising out of" did not require a direct proximate causal connection but instead merely required some causal relation or connection. So the phrase here required a casual connection between Parrinello's death and the use of the Sand Bar Grille that was more than incidental, fortuitous or "but for." 

    Auto-Owenrs argued that but for Parrinello's decision to patronize the Sand Bar Grille, she would not have died when leaving the parking lot. The Marina defendants could show nothing more than an incidental connection between the operation of the Sand Bar Grille and Parrinello's death. The Marina defendants could only speculate as to the reason why Parrinello was at the Marina.

    The record reflected that it was likely that there was a gate attendant, who would have required Parrinello to state that she was going to the Sand Bar Grille before she was admitted into the parking area. This, and additional evidence from the record, presented more than mere speculation in support of the Marina defendants' contention that Parrinello's sole purpose for being at the Marina was to patronize the Sand Bar Grille. Auto-Owners did not come forward with any evidence to refute this evidence. Thus, there was no genuine issue of material fact with respect to Parrinello's purpose for being at the Marina. Given that her sole purpose was to patronize the Sand Bar Grille, the Marina defendants had shown that there was a sufficient causal nexus between her death and her use of the bar.

    The trial court did not err by granting summary judgment to JROC and denying Auto-Owners' motion for summary judgment.