Michigan Bad Faith Insurance Complaint (Civil Action)

COMPLAINT FOR BREACH OF INSURANCE CONTRACT AND STATUTORY PENALTY INTEREST — MICHIGAN

TABLE OF CONTENTS

1. Caption
2. Parties, Jurisdiction, and Venue
3. Factual Allegations
4. The Policy and Premium Payment
5. The Loss and Proof of Loss
6. Defendant's Wrongful Handling of the Claim
7. Count I — Breach of Insurance Contract
8. Count II — Statutory Penalty Interest under MCL § 500.2006
9. Count III — Declaratory Judgment
10. Count IV — Michigan Consumer Protection Act (Conditional / Pleaded in the Alternative)
11. Damages
12. Prayer for Relief
13. Demand for Trial by Jury
14. Reservation of Rights
15. Verification
16. Signature and Service Blocks
17. Certificate of Service
18. Michigan Practice Notes
19. Sources and References

1. CAPTION

STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR THE COUNTY OF [COUNTY NAME]

Case No. [________________________________]

Hon. [________________________________]

COMPLAINT, JURY DEMAND, AND DEMAND FOR STATUTORY PENALTY INTEREST

There is no other pending or resolved civil action arising out of the transaction or occurrence alleged in this Complaint.

NOW COMES Plaintiff, [PLAINTIFF NAME], by and through undersigned counsel, and for a Complaint against Defendant [INSURER NAME], states as follows:

2. PARTIES, JURISDICTION, AND VENUE

2.1. Plaintiff [PLAINTIFF NAME] ("Plaintiff" or the "Insured") is an individual residing in [COUNTY] County, Michigan, and at all relevant times was the named insured under the policy of insurance described below.

2.2. Defendant [INSURER NAME] ("Defendant" or the "Insurer") is a [STATE] insurance corporation duly authorized by the Department of Insurance and Financial Services ("DIFS") to transact insurance business in the State of Michigan, with a principal place of business at [ADDRESS] and a registered agent for service of process at [REGISTERED AGENT / ADDRESS].

2.3. The amount in controversy, exclusive of interest, costs, and attorney's fees, exceeds Twenty-Five Thousand Dollars ($25,000.00), vesting subject-matter jurisdiction in this Court pursuant to MCL § 600.605 and § 600.8301.

2.4. Venue is proper in this Court under MCL § 600.1621 and § 600.1627 because Defendant conducts business in [COUNTY] County, the insured property is located in [COUNTY] County, and the events giving rise to this Complaint occurred in [COUNTY] County.

3. FACTUAL ALLEGATIONS

3.1. On or about [DATE], Plaintiff and Defendant entered into a written contract of insurance, Policy No. [POLICY NUMBER] (the "Policy"), insuring [DESCRIBE COVERAGE — e.g., the dwelling at [ADDRESS]; the vehicle described as [YEAR/MAKE/MODEL/VIN]; life of the insured].

3.2. At all material times, the Policy was in full force and effect, and Plaintiff had paid all premiums when due and had complied with all conditions precedent to coverage.

3.3. The Policy provides coverage for [DESCRIBE COVERED PERIL — e.g., direct physical loss, fire, theft, accidental death, disability] in an amount up to $[POLICY LIMIT].

4. THE POLICY AND PREMIUM PAYMENT

4.1. A true and correct copy of the Policy is attached as Exhibit A and incorporated by reference. MCR 2.113(C)(1).

4.2. Plaintiff paid the premium of $[AMOUNT] for the policy term running from [DATE] through [DATE].

4.3. Defendant accepted the premium and issued the Policy with full knowledge of the insured risk.

5. THE LOSS AND PROOF OF LOSS

5.1. On or about [DATE OF LOSS], Plaintiff sustained a covered loss when [DESCRIBE LOSS EVENT — e.g., a fire damaged the insured dwelling; a covered theft occurred; the insured became totally disabled] (the "Loss").

5.2. The Loss is a covered cause of loss under the Policy.

5.3. Plaintiff promptly notified Defendant of the Loss on or about [DATE OF NOTICE] and cooperated fully with Defendant's investigation.

5.4. On or about [DATE OF PROOF OF LOSS], Plaintiff submitted a sworn proof of loss and supporting documentation to Defendant, including [ITEMIZE — e.g., contractor estimates; medical records; police reports; photographs; receipts] (the "Proof of Loss").

5.5. The Proof of Loss constitutes "satisfactory proof of loss" within the meaning of MCL § 500.2006(3) and triggers the 60-day payment period.

5.6. Defendant did not, within 30 days of receipt of the claim, specify in writing additional materials needed to constitute satisfactory proof of loss as required by MCL § 500.2006(2). Alternatively, Defendant requested [ITEMIZE REQUESTS], which Plaintiff supplied on [DATE].

6. DEFENDANT'S WRONGFUL HANDLING OF THE CLAIM

6.1. Notwithstanding receipt of the Proof of Loss on or about [DATE], Defendant failed to pay the Loss within sixty (60) days as required by MCL § 500.2006(4).

6.2. On or about [DATE OF DENIAL / PARTIAL PAYMENT], Defendant [denied the claim in its entirety / paid only $[AMOUNT] of a loss exceeding $[AMOUNT] / continues to delay payment], citing [STATED REASON].

6.3. Defendant's stated reason is pretextual and unsupported by the Policy language, the facts of the Loss, or applicable Michigan law.

6.4. In handling the claim, Defendant engaged in one or more of the following acts which, while not independently actionable as a tort under Kewin v. Massachusetts Mut. Life Ins. Co., 409 Mich. 401 (1980), constitute breaches of Defendant's contractual and statutory duties and evidence of unfair settlement practices under MCL § 500.2026 and § 500.2027:

• (a) Failing to acknowledge and act reasonably promptly upon communications with respect to the claim;
• (b) Failing to adopt and implement reasonable standards for prompt investigation of claims;
• (c) Refusing to pay claims without conducting a reasonable investigation based upon all available information;
• (d) Failing to affirm or deny coverage of claims within a reasonable time after Proof of Loss had been completed;
• (e) Compelling the insured to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered;
• (f) Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for the denial of the claim;
• (g) [ADD CASE-SPECIFIC CONDUCT].

6.5. As of the filing of this Complaint, more than sixty (60) days have elapsed since Defendant's receipt of satisfactory Proof of Loss, and Defendant has not paid the amount due.

7. COUNT I — BREACH OF INSURANCE CONTRACT

7.1. Plaintiff incorporates by reference Paragraphs 1.1 through 6.5.

7.2. The Policy is a valid and enforceable written contract between Plaintiff and Defendant.

7.3. Plaintiff has fully performed all conditions precedent to recovery under the Policy, or such conditions have been waived or excused.

7.4. Defendant has materially breached the Policy by failing and refusing to pay the amounts due to Plaintiff for the covered Loss.

7.5. As a direct and proximate result of Defendant's breach, Plaintiff has sustained damages in an amount to be proven at trial, but in no event less than $[AMOUNT], plus consequential damages reasonably foreseeable at the time of contracting.

8. COUNT II — STATUTORY PENALTY INTEREST UNDER MCL § 500.2006

8.1. Plaintiff incorporates by reference Paragraphs 1.1 through 7.5.

8.2. Plaintiff is "the insured or a person directly entitled to benefits under [an] insured's insurance contract" within the meaning of MCL § 500.2006(4) and is therefore entitled to penalty interest "irrespective of whether the claim is reasonably in dispute." See Estate of Nickola v. MIC Gen. Ins. Co., 500 Mich. 115, 894 N.W.2d 552 (2017).

8.3. Defendant received satisfactory Proof of Loss on or about [DATE]. The 60-day timely-payment period expired on or about [DATE + 60 DAYS].

8.4. Defendant failed to pay the benefits due within the 60-day period.

8.5. Plaintiff is entitled to simple interest at the rate of twelve percent (12%) per annum on all unpaid benefits, running from sixty (60) days after Defendant's receipt of Proof of Loss until paid in full, in addition to the underlying contract damages.

9. COUNT III — DECLARATORY JUDGMENT

9.1. Plaintiff incorporates by reference Paragraphs 1.1 through 8.5.

9.2. An actual and justiciable controversy exists between Plaintiff and Defendant concerning Defendant's obligations under the Policy with respect to the Loss.

9.3. Pursuant to MCR 2.605, Plaintiff requests a declaratory judgment that:

• (a) The Loss is a covered cause of loss under the Policy;
• (b) Defendant is obligated to indemnify Plaintiff for the full amount of the Loss, subject only to the Policy's limits and applicable deductible;
• (c) Defendant's purported denial / partial payment is a breach of the Policy and is void as to Plaintiff; and
• (d) Defendant is liable for statutory penalty interest under MCL § 500.2006(4).

10. COUNT IV — MICHIGAN CONSUMER PROTECTION ACT (CONDITIONAL / PLEADED IN THE ALTERNATIVE)

10.1. Plaintiff incorporates by reference Paragraphs 1.1 through 9.3.

10.2. Defendant engaged in unfair, unconscionable, and deceptive acts in the conduct of trade or commerce in violation of MCL § 445.903(1), specifically: [IDENTIFY CONDUCT NOT WITHIN THE "SPECIFICALLY AUTHORIZED" REGULATORY FRAMEWORK — e.g., independent fraud regarding non-policy services; deceptive collection of premium for coverage Defendant knew was void].

10.3. The challenged conduct is not "specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States" within the meaning of MCL § 445.904(1)(a) and Smith v. Globe Life Ins. Co., 460 Mich. 446 (1999).

10.4. As a result, Plaintiff has suffered loss and is entitled to actual damages, reasonable attorney's fees, and other relief available under MCL § 445.911.

11. DAMAGES

11.1. Contract damages. Unpaid policy benefits in an amount not less than $[AMOUNT].

11.2. Consequential damages that were reasonably foreseeable at the time of contracting, including [ITEMIZE — e.g., interim housing costs, mitigation expenses, additional living expenses].

11.3. Statutory penalty interest at 12% per annum under MCL § 500.2006(4), from the 61st day after Proof of Loss until paid.

11.4. Statutory judgment interest under MCL § 600.6013 from the date of filing.

11.5. Costs as allowed by law, including reasonable attorney's fees if and to the extent provided by the Policy or by statute.

12. PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully prays that this Honorable Court enter judgment in favor of Plaintiff and against Defendant for:

• A. Compensatory contract damages in an amount to be proven at trial, but in no event less than $[AMOUNT];
• B. Consequential damages reasonably foreseeable at the time of contracting;
• C. Statutory penalty interest at 12% per annum under MCL § 500.2006(4);
• D. Declaratory judgment as set forth in Count III;
• E. Statutory judgment interest under MCL § 600.6013;
• F. Costs of suit and attorney's fees to the extent permitted by contract or statute;
• G. Such other and further relief as the Court deems just and equitable.

13. DEMAND FOR TRIAL BY JURY

Plaintiff hereby demands a trial by jury of all issues so triable as a matter of right pursuant to MCR 2.508.

14. RESERVATION OF RIGHTS

Plaintiff reserves the right to amend this Complaint to assert additional claims, add parties, or supplement allegations as discovery may reveal, in accordance with MCR 2.118.

15. VERIFICATION

STATE OF MICHIGAN

COUNTY OF [COUNTY]

I, [PLAINTIFF NAME], being first duly sworn, depose and say that I am the Plaintiff in the foregoing action; that I have read the foregoing Complaint and know the contents thereof; and that the matters stated therein are true to my own knowledge except as to those matters stated upon information and belief, and as to those matters I believe them to be true.

[________________________________]

[PLAINTIFF NAME]

Subscribed and sworn to before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public, [COUNTY] County, Michigan

My Commission Expires: [_______________]

Acting in [COUNTY] County

16. SIGNATURE AND SERVICE BLOCKS

Date: [__/__/____]

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME] (P[BAR NUMBER])

Attorney for Plaintiff

[STREET ADDRESS]

[CITY, MI ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

17. CERTIFICATE OF SERVICE

I hereby certify that on [__/__/____], I caused a copy of the foregoing COMPLAINT, JURY DEMAND, AND DEMAND FOR STATUTORY PENALTY INTEREST to be served upon Defendant via service of process under MCR 2.105 by [METHOD — personal service on registered agent / certified mail return receipt requested] at:

[REGISTERED AGENT NAME]

[REGISTERED AGENT ADDRESS]

[________________________________]

[ATTORNEY NAME] (P[BAR NUMBER])

18. MICHIGAN PRACTICE NOTES

• No common-law bad-faith tort. Michigan does not recognize an independent tort for first-party bad faith. Kewin v. Massachusetts Mut. Life Ins. Co., 409 Mich. 401, 295 N.W.2d 50 (1980), is dispositive: "Absent allegation and proof of tortious conduct existing independent of the breach, exemplary damages may not be awarded in common-law actions brought for breach of a commercial contract." Mental-distress damages are likewise unavailable.
• No private right of action under the UTPA. MCL § 500.2026 and § 500.2027 (Unfair Methods of Competition and Unfair or Deceptive Acts) are enforced exclusively by DIFS. Young v. Mich. Mut. Ins. Co., 139 Mich. App. 600 (1984). Use these provisions as evidence and as the basis for a parallel administrative complaint, not as a count.
• The 12% penalty is the principal statutory hammer. MCL § 500.2006(4) imposes 12% simple interest on unpaid benefits from 60 days after receipt of satisfactory proof of loss. For an INSURED, the penalty applies even if the claim is reasonably in dispute. Estate of Nickola v. MIC Gen. Ins. Co., 500 Mich. 115 (2017). For a THIRD-PARTY tort claimant, the additional "not reasonably in dispute" + "bad faith" + "court-determined" elements apply.
• Proof-of-loss timing. MCL § 500.2006(2) requires the insurer to specify in writing within 30 days what materials constitute satisfactory proof of loss. Document the date the insurer received the claim, the date (if any) the insurer specified additional documentation, and the date you provided each item.
• Michigan Consumer Protection Act is largely off-limits. Smith v. Globe Life Ins. Co., 460 Mich. 446 (1999), exempts insurance transactions "specifically authorized" by regulatory law, and most insurance is so authorized. Plead the MCPA only for collateral conduct outside the regulated insurance product.
• Statute of limitations. Six years on a written contract under MCL § 600.5807(8). Many property policies contain a one-year suit-limitation clause, which Michigan courts enforce if reasonable. Rory v. Continental Ins. Co., 473 Mich. 457 (2005).
• Jurisdiction and venue. Circuit Court for amounts >$25,000 (MCL § 600.605, § 600.8301). Venue under MCL § 600.1621 (insurer's place of business / agent) or § 600.1627 (where cause of action arose).
• Pleading standard. Michigan is a fact-pleading state under MCR 2.111(B)(1) — the complaint must contain "a statement of the facts, without repetition, on which the pleader relies in stating the cause of action." Plead specific facts, not legal conclusions.
• DIFS administrative complaint. Concurrently file a complaint with DIFS at https://difs.state.mi.us/Complaints/. DIFS will request a written response from the insurer; the response is often a useful litigation document and may pressure settlement.
• No-Fault PIP claims are governed by a separate scheme. PIP penalty interest is governed by MCL § 500.3142 (12% interest after 30 days from reasonable proof) and attorney-fee shifting by MCL § 500.3148. Use the no-fault statutes — not § 500.2006 — for first-party PIP disputes.
• UM/UIM claims. Underinsured-motorist claims by an insured are first-party claims under Nickola; the 12% penalty applies regardless of whether the claim is reasonably in dispute.

19. SOURCES AND REFERENCES

• MCL § 500.2006 (Uniform Trade Practices Act — penalty interest) — https://www.legislature.mi.gov/Laws/MCL?objectName=MCL-500-2006
• MCL § 500.2026 (Unfair settlement practices) — https://www.legislature.mi.gov/
• MCL § 500.2027 (Specific unfair acts) — https://www.legislature.mi.gov/
• MCL § 500.3142 (No-fault PIP penalty interest) — https://www.legislature.mi.gov/
• MCL § 600.5807 (Statute of limitations on contracts) — https://www.legislature.mi.gov/
• MCL § 445.903 et seq. (Michigan Consumer Protection Act) — https://www.legislature.mi.gov/
• Kewin v. Massachusetts Mut. Life Ins. Co., 409 Mich. 401, 295 N.W.2d 50 (1980) — https://law.justia.com/cases/michigan/supreme-court/1980/60756-3.html
• Estate of Nickola v. MIC Gen. Ins. Co., 500 Mich. 115, 894 N.W.2d 552 (2017) — https://law.justia.com/cases/michigan/supreme-court/2017/152535.html
• Smith v. Globe Life Ins. Co., 460 Mich. 446, 597 N.W.2d 28 (1999) — https://law.justia.com/cases/michigan/supreme-court/1999/110065-6.html
• Rory v. Continental Ins. Co., 473 Mich. 457, 703 N.W.2d 23 (2005)
• Young v. Mich. Mut. Ins. Co., 139 Mich. App. 600 (1984) (no private action under § 500.2026)
• Michigan Court Rules (MCR) — https://courts.michigan.gov/rules-administrative-orders-and-jury-instructions/
• Department of Insurance and Financial Services — https://www.michigan.gov/difs
• DIFS Online Consumer Complaint Form — https://difs.state.mi.us/Complaints/

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. Michigan does NOT recognize a common-law tort of first-party bad faith under Kewin v. Massachusetts Mutual. The principal statutory remedy is 12% penalty interest under MCL § 500.2006. A Michigan-licensed attorney must review and customize this document before filing. Laws, citations, and court rules change frequently; verify all authorities before use.