Introduction

Piatt Lake Bible Conference Association (“PLBCA”), a long-standing Michigan nonprofit religious organization, insured roughly 18 buildings under a blanket “replacement cost” policy issued by Church Mutual Insurance Company (“Church Mutual”). Although the policy carried an overall per-occurrence replacement-cost limit (approximately $3.5 million), it also contained a $100,000 sub-limit for costs necessary to comply with ordinances, laws, or building codes (i.e., “code-compliance” or “ordinance or law” costs).

After PLBCA’s “Miracle Building” collapsed in March 2020, PLBCA contended that rebuilding to modern code would exceed the $100,000 sub-limit by about $1.3 million. Rather than suing for breach of contract (PLBCA did not dispute Church Mutual’s performance under the policy as written), PLBCA pursued tort theories—fraud/misrepresentation variants and promissory estoppel—arguing that Church Mutual’s “full coverage” representations effectively made it liable for code-compliance costs beyond the policy cap.

The key issues were:

• Duty: Whether Church Mutual (through its agents) owed PLBCA a duty “separate and distinct” from the insurance contract—especially a duty to advise about the adequacy of code-compliance coverage.
• Reliance: Whether PLBCA could show reasonable and actual reliance on extra-contractual “fully covered” assurances to recover amounts the policy expressly limited.

Summary of the Opinion

The Sixth Circuit affirmed summary judgment for Church Mutual. Applying Michigan law, the court held that PLBCA’s tort claims failed on two independent grounds:

1. No separate-and-distinct duty: PLBCA did not establish a “special relationship” under Harts v. Farmers Ins. Exch. that would impose a duty on the insurer/agent to advise about coverage adequacy beyond the contract.
2. No reasonable (or actual) reliance: Any reliance on representations contradicting the policy’s unambiguous $100,000 code-compliance sub-limit was unreasonable; additionally, the record did not show PLBCA actually relied on the alleged statements in the manner claimed.

Analysis

1) Precedents Cited (and How They Drove the Result)

A. Contract–tort boundary and the “separate-and-distinct duty” requirement

The opinion begins from Michigan’s core premise that insurer–insured relationships are primarily contractual, citing Harts v. Farmers Ins. Exch.. Tort claims can proceed only when the alleged wrong is independent of the contract, anchored in Kewin v. Mass. Mut. Life Ins. Co. and echoed by Harsh v. Sykora. The court operationalized that boundary through Michigan’s “separate-and-distinct-duty test,” citing Smith Living Tr. v. Erickson Ret. Cmtys., and noting the label in Precision Standard, Inc. v. ADP Tax Servs., Inc.. To explain the test’s purpose—policing the “dividing line” between contract and tort—the panel relied on Fraser Engine Rebuilder, Inc. v. Lancaster, which in turn cites Hart v. Ludwig.

For when fraud can be “extraneous to the contract,” the panel used Sixth Circuit and Michigan Court of Appeals authorities: DBI Invs., LLC v. Blavin (quoting Huron Tool & Eng'g Co. v. Precision Consulting Servs., Inc.) and PSP Stores, LLC v. Ford. These cases supported the court’s insistence that PLBCA had to identify a non-contract duty and non-contract harm—something more than an attempt to obtain, via tort, what the policy text did not provide.

The court also confirmed the same framework reaches fraudulent inducement claims via Gen. Motors Corp. v. Alumi-Bunk, Inc. (including the Michigan Supreme Court’s adoption of the dissent’s analysis).

B. Insurance-agent duty to advise and the narrow “special relationship” exceptions

The controlling duty rule came directly from Harts v. Farmers Ins. Exch.: absent a “special relationship,” an agent generally owes no duty to advise a potential insured about coverage adequacy. The opinion treated Harts as the exclusive gateway for PLBCA’s effort to recast this coverage dispute as a tort.

PLBCA tried to fit its evidence into the second and third Harts triggers (ambiguous request requiring clarification; or an inquiry that leads to inaccurate advice). The court rejected that attempt by invoking fact-pattern analogues:

• Pressey Enters., Inc. v. Barnett-France Ins. Agency — a mere comment/hope for elaboration is not an “inquiry” demanding clarification under Harts; this undermined PLBCA’s brochure-based and generalized “fully covered” narrative.
• Akers v. Bankers Life and Cas. Co. — where there is no identifiable representation in the record, there can be no “inaccurate information” to trigger a special relationship; applied to Welty’s inability to recall what Kroeger actually said.
• Five Waters Properties, LLC v. Bone — similarly, where the request/response cannot be recalled, courts resist finding ambiguity requiring clarification or actionable advice.
• Bamal Corp. v. Chassis Powder Coating, Inc. — if the statement is understood by both parties, it is not “ambiguous”; and misunderstanding that could be cured by reading the written terms does not create an advisory duty.
• Opera Block Props., Inc. v. Auto-Owners Ins. Co. — reinforces the insured’s obligation to read the policy and ask questions, supporting the refusal to transform an insured’s assumption into an agent’s tort duty.

C. Reliance doctrines: unambiguous policy terms defeat “reasonable reliance,” and the record also lacked “actual reliance”

Reliance was an element across PLBCA’s fraud/misrepresentation variants and promissory estoppel. For promissory estoppel, the panel cited Cnty. of Ingham v. Mich. Cnty. Rd. Comm'n Self-Ins. Pool. For fraud/misrepresentation, the court relied on Titan Ins. Co. v. Hyten (and its description of these theories under the “fraud” umbrella), plus examples including DBD Kazoo LLC v. W. Mich. LLC, Johnson v. Johnson, Winthrop v. Deck, Barclae v. Zarb, and Zaremba Equip., Inc. v. Harco Nat'l Ins. Co. (“Zaremba I”).

The “reasonable reliance” conclusion rested on a consistent Michigan rule: it is unreasonable to rely on representations that contradict unambiguous policy language. The panel cited Hohensee v. Nasser Ins. Agency, Inc. (citing Zaremba I), and supplemented with Sixth Circuit authority Ram Int'l, Inc. v. ADT Sec. Servs., Inc. (integration clause / express contradiction defeats reasonable reliance). The panel further invoked DBD Kazoo LLC v. W. Mich. LLC for the principle that there is no fraud when a party has the means to determine the truth. Cooper v. Auto Club Ins. Ass'n supplied a particularly insurance-specific formulation: insureds are presumed to have read their policy; if a statement conflicts with the policy, reliance without questioning it is not reasonable. McDowell v. Moore Ins. Servs., Inc. supported summary judgment where insureds did not read the policy and thus could not reasonably rely on contrary coverage understandings.

Separately, the court found a lack of “actual reliance” in the evidence, citing Timmons v. DeVoll for the requirement of actual reliance and Drake v. Auto Club Ins. Ass'n for rejecting claims where reliance is not evidenced. On PLBCA’s three asserted sources of misrepresentation:

• Brochure: No evidence PLBCA received or read it; thus no reliance. The court cited VanStelle v. Macaskill (later overruled on other grounds by Markel v. William Beaumont Hosp.) and also Dupuis v. Utica Mut. Ins. Co. (brochure descriptions cannot override the policy itself).
• 2014 Lintemuth–Loos exchange: The record showed the discussion concerned blanket-limit adequacy (not code compliance), and Lintemuth himself understood “replacement” as reproducing what existed, not upgrading to current code—undercutting reliance. The court’s reasoning aligns with its reliance discussion and cited Groulx v. Iqbal as an example of no reliance where the plaintiff did not understand the statement to communicate the alleged misrepresentation.
• 2019 Welty–Kroeger exchange: Welty could not recall what was said; “feeling comfortable” is not a representation. The court cited Sherman v. Singh for the proposition that a statement must make an assertion on which reliance is possible.

D. Summary judgment framework

The panel applied federal summary judgment standards: de novo review per Standard Ins. Co. v. Guy; the nonmovant’s burden to identify specific triable facts per Anderson v. Liberty Lobby, Inc.; and viewing evidence in the nonmovant’s favor per Matsushita Elec. Indus. Co. v. Zenith Radio Corp.. The reliance and duty failures were treated as dispositive element failures suitable for summary judgment.

E. Choice-of-law anchor in diversity

Because the case was in federal court on state-law claims, the panel cited SHH Holdings, LLC v. Allied World Specialty Ins. Co. for applying the forum state’s substantive law (Michigan).

2) Legal Reasoning

The court’s reasoning proceeds in a disciplined sequence typical of Michigan contract–tort disputes involving insurance coverage:

1. Identify the true nature of the dispute: PLBCA sought recovery for costs the policy “explicitly excluded” via a sub-limit, while conceding no breach of the contract as written.
2. Apply the separate-and-distinct-duty rule: Without a duty independent of the contract, tort claims cannot be used to rewrite coverage.
3. Test for a duty to advise under Harts: The court scrutinized whether PLBCA’s communications constituted an ambiguous request or an inquiry triggering inaccurate advice. It found the evidence too general, too unrecallable, or expressly about something else (blanket limits).
4. Independently reject claims for lack of reasonable and actual reliance: Even assuming arguendo that a representation was made, the policy’s unambiguous $100,000 code-compliance cap made reliance unreasonable; and the record did not show PLBCA actually relied on the alleged statements in the relevant way.

3) Impact

Although unpublished, the opinion consolidates several practical lessons for Michigan insurance litigation (and for Sixth Circuit diversity cases applying Michigan law):

• Tort cannot function as “coverage expansion”: Plaintiffs cannot use misrepresentation, fraud variants, or promissory estoppel to obtain benefits that contradict unambiguous policy sub-limits—especially where no special relationship duty is established.
• Harts remains a high bar: General “are we fully covered?” conversations, comfort-inducing meetings, or marketing materials will rarely trigger the narrow special-relationship categories without a concrete, recalled inquiry-and-advice exchange tied to the disputed coverage.
• Reliance is both legal and factual: The decision treats reliance as (i) legally unreasonable when contrary to unambiguous terms, and (ii) factually absent where the insured never received the statement, cannot recall it, or understood it differently (e.g., as “replication,” not “code upgrades”).
• Ordinance-or-law sub-limits are enforceable as written: The presence of blanket replacement cost limits does not imply unlimited code-upgrade coverage; sub-limits will be applied unless contractually altered.

Complex Concepts Simplified

• Blanket replacement cost coverage: A single pot of coverage (here, about $3.5 million) applying across multiple buildings per occurrence, rather than separate limits per building.
• Code-compliance (ordinance or law) sub-limit: Even if the policy pays to “replace” a building, it may cap what it will pay for upgrades required only because modern codes changed since the building was originally built (sprinklers, elevators, ramps, septic/pump systems, etc.).
• Separate-and-distinct-duty test: When a contract exists, you generally cannot sue in tort unless the defendant violated a duty that exists independently of the contract (not merely “you should have paid more under the deal”).
• Harts special relationship: Michigan’s narrow exceptions where an insurance agent can owe an advisory duty—typically requiring a concrete misrepresentation about coverage, an ambiguous request needing clarification, inaccurate advice given in response to an inquiry, or an expressly assumed additional duty.
• Reasonable vs. actual reliance: “Actual reliance” asks whether the plaintiff truly acted because of the statement; “reasonable reliance” asks whether it was sensible/legally permissible to do so—especially when the written policy says the opposite.
• Integration clause: A contract provision stating the written agreement is the complete agreement—often used (as in the reliance discussion) to defeat claims based on outside promises that contradict the writing.

Conclusion

The Sixth Circuit’s decision reinforces a strict, text-centered approach to insurance coverage disputes under Michigan law: where a policy unambiguously caps a category of coverage (here, code-compliance costs), an insured cannot repackage dissatisfaction with that cap as tort claims unless it can (1) identify a Harts-recognized special relationship creating a separate duty to advise, and (2) prove reasonable and actual reliance on a concrete misrepresentation. General assurances of being “fully covered,” marketing materials not shown to have been received, and meetings remembered only as “comforting” do not suffice—particularly when the insured did not read the policy that plainly disclosed the limiting term.