O J Enterprises, Inc. v. Insurance Co. of North America

Prior to January 3, 1978, defendant issued an insurance policy to plaintiff covering a building located in Farmington Hills, Michigan. On that date the building was substanially destroyed by fire. It had previously been insured for about $70,000 by the prior owner. Plaintiff purchased the building with the intention of adding $90,000 worth of improvements and, therefore, insured the premises for $160,000. At the time of the fire, however, no improvements had been made.

On February 22, 1978, plaintiff submitted to defendant a claimed proof of loss of $200,000. Defendant accepted this as a…