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STATE OF MICHIGAN
COURT OF APPEALS


GWINIOV J. RILEY, Plaintiff-Appellant, v STATE FARM FIRE AND CASUALTY CO., Defendant-Appellee, and ENVIRONMENTAL HEALTH RESOURCES, SERVPRO OF MUSKEGON, and RANDALL C. MULDER, Defendants.

UNPUBLISHED September 25, 2008

No. 276195 Muskegon Circuit Court LC No. 2003-042817-CZ

Before: Meter, P.J., and Talbot and Servitto, JJ. PER CURIAM. Plaintiff appeals, as of right, a judgment in her favor in the amount of $33,523.49 in this breach of contract action. Specifically, plaintiff appeals the trial court's determination that defendant, State Farm Fire and Casualty Co. ("State Farm"), was entitled to a setoff from the jury award of amounts it previously paid on insurance claims submitted to it by plaintiff and the court's entry of a judgment applying the offsets. Because State Farm was not entitled to such setoffs, we remand for entry of a judgment in plaintiff's favor in the amount of $125,450, plus case evaluation sanctions. In January of 2001, plaintiff filed a claim with her homeowner's insurance provider, State Farm, for damages to her home resulting from ice damming. State Farm paid on the claim. In April 2002, plaintiff filed another insurance claim with State Farm for damages resulting from a toilet leak in her home. The toilet leaked into plaintiff's basement, causing damage to items in the basement and visible mold to grow in the bathroom and on the basement ceiling. Due to the presence of mold and plaintiff's complaints of physical ailments, State Farm's agent determined that it would be best if plaintiff's family vacated the home.

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State Farm undisputedly paid for air quality testing on plaintiff's home and mold remediation, as well as the cleaning of some of the contents of the home, repair of the home, and additional living expenses ("ALE") for plaintiff's family to reside outside of the home while the home was tested and remediation took place. Despite the fact that the home passed clearance testing in August 2002, plaintiff still suffered physical ailments upon entering the home and mold was apparently still present in the home. State Farm paid for further testing on the home and continued to pay ALE benefits to plaintiff while it tried to determine whether anything further needed to be done concerning the toilet leak claim. In December 2002, State Farm determined that because the home had passed clearance testing and any present mold was not caused by the toilet leak, it would pay nothing further on the toilet leak claim. Plaintiff thereafter brought suit against State Farm for, among other things, breach of contract. Plaintiff essentially claimed that the mold remediation was unsuccessful and that she continued to suffer damages as a result of the toilet leak. Plaintiff asserted that further payments were thus owed on the toilet leak claim and State Farm refused to pay the additional amounts owing. The breach of contract claim proceeded to a jury trial, at the conclusion of which the jury rendered a verdict in plaintiff's favor in the amount of $164,450. In post-trial motions, State Farm requested a setoff from the jury verdict of amounts it had already paid on the claim(s) as well as setoff of a settlement amount between plaintiff and another defendant. The trial court agreed that such setoffs were proper and, after applying the setoffs and awarding interest and prevailing party costs to plaintiff, entered a final judgment in plaintiff's favor in the amount of $33,523.49. On appeal, plaintiff asserts that State Farm was not entitled to setoffs of amounts it previously paid on the ice damming and toilet leak claims, as the jury awarded her only those damages that arose after State Farm discontinued paying benefits on her claims. State Farm, on the other hand, essentially argues that the damages award by the jury encompasses the payments State Farm previously paid, thus entitling it to a setoff of such payments. In general, absent a statutory mandate authorizing a setoff in a particular circumstance, setoff is a matter in equity. See, generally, 20 Am. Jur. 2d, Counterclaim, Recoupment, and Setoff,

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Michigan Law