Hartford unit not obligated to pay meat retailer’s claims

A Hartford Financial Insurance Group unit is not obligated to pay claims submitted by a financially troubled Detroit meat retailer that suffered robbery, vandalism then a fire that destroyed its remaining property because it misrepresented its losses, says a federal district court.

Before the winter of 2015, Meat Town had been in business for more than 20 years, according to Thursday’s ruling by the U.S. District Court in Detroit in Meat Town v. Sentinel Insurance Co. Ltd. Then it began facing financial difficulties, including owing a $3,000 electricity bill, which resulted in the electric company shutting off its power on Nov. 10, 2015.

The next day, the store was vandalized and robbed, and a claims consultant estimated it had suffered $307,000 in losses. “Things went from bad to worse for Meat Town,” said the ruling. It did not reopen for business and on Dec. 19, 2015, there was a break-in and fire that destroyed its remaining property. An insurance investigator later concluded the fire was arson.

After Hartford unit Sentinel failed to pay either the vandalism and robbery or fire claims, Meat Town filed suit against the insurer, which sought summary judgment in the case. The court ruled in Sentinel’s favor, on the basis it had intentionally misrepresented the facts underlying its vandalism and robbery claim.

If “presented with the summary-judgment record, every reasonable jury would find that Meat Town intentionally, or at least recklessly, made material misrepresentations on its Summary of Loss with the expectation that Sentinel would pay the claimed amount. Sentinel is thus, as a matter of law, permitted to declare that the insurance policy it issued to Meat Town void,” said the District Court in granting the insurer’s motion for summary judgment.

Attorneys in the case could not be reached for comment.

Last year, a federal appeals court reversed a lower court ruling and held an insurer is obligated to compensate a trucking company for meat stolen while a truck driver was engaged in a “liaison.”