The Court of Appeals of Michigan affirmed a judgment in favor of an insurer that denied a commercial property claim based on the absence of an automatic extinguishing system (AES) on the insured property. The case is 23771 Blackstone, LLC v. Conifer Ins. Co., 2023 Mich. App. LEXIS 8292 (Mich. Ct. App. 2023). Please note that this opinion is unpublished and therefore has limited precedential value. 

A fire damaged a building owned by 23771 Blackstone, LLC (Blackstone) and insured through a commercial property policy with Conifer. The original policy had been purchased several years before the fire and was renewed annually. A "Protective Safeguards Endorsement" (PSE) was attached to the policy that required Blackstone to maintain a specific type of AES in the building as a condition of coverage. There was no AES installed in the building at the time of the fire. 

Conifer denied Blackstone's subsequent claim for the fire damage based on the lack of an AES, referring to the policy condition stated in the endorsement. Blackstone then filed suit for breach of contract and equitable relief. In the complaint, Blackstone alleged the multiple inspections Conifer had conducted before the loss meant Conifer was or should have been aware there was no AES in the building, and allowing the denial to stand would be inequitable. Conifer argued Blackstone had had constructive knowledge that an AES was a required policy condition for coverage.