NOT RECOMMENDED F OR P UBLICATION F ile Nam e: 13a0183n.06
No. 11-2228
UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT

SOVEREI GN B ANK, a

Fe dera l Savings Ba nk, Plaintiff-Appellant,

v. FED ERAL

I NSURANCE COMPANY, Def endant- Appellee

. ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNI TED STATES DI STR I CT COURT FOR THE WES TERN DISTRI CT OF MI CHI GAN

Before: COOK

and WH ITE, Circuit Jud ges; and SHARP, D istrictJudge. *
P ER CURIAM . I n this action for brea ch o f co n trac t and a decla ration of rig hts under an

av i ation insurance policy , Sovereig n Ba nk appea ls the district court’s summary dismiss al of i t s claims under F ed. R. Civ. P. 12(b)(6). We AF FI RM. Sovereig n loaned money to N400DE, L L C, a Michig an L L C owned by David Eyde, for the purcha se of a Mooney M20M Aircr aft (the Mooney ). Def endant Fe dera l issued N400DE, L L C, an airc raf t-insuranc e policy

that was e ffe ctive from September 26, 2009 to Septe mber 26, 2010. The pol i cy i n s u re d the Mooney ag ainst phy sical damag e or loss in the amount of $448,000. An endorse ment to the policy provided that Sovereig n was a loss pay ee (to protec t it ag ainst loss of its

The Honor able Ke vin H. Sharp, United States District Judge f or the Middle * District of Tenne ssee, sitting by desig nation. 1collater al, the Mooney ). On September 30, 2009, the airc raf t cra shed in Indiana, killing Ey de – the only occupa

nt. The plane was a total loss. On or about October 15, 2010, Sovereign filed a losspay ee c laim with Fede ral, whic h was de nied.
On Dec ember

7, 2010, Sovereig n filed suit ag ainst Fe dera l alleg ing br eac h of contra ct and seeking a decla

ration of rig hts. Fe dera l broug ht a 12(b)( 6) motion seeking dismiss al on the basis that Sovereig n’s suit was untimely beca use it was filed afte r the 12-month contra ctual limit ation period ended on Se p te mb e r 3 0 , 2010. Sovereign argued that the airc raf t policy ’s 12-month limit ation period

was unenfor cea

ble. I n support, Sovereign cited the Michig an Insuranc e Commi ssioner’s Dec ember 16, 2005 Orde r of Prohibiti on, No. 05-050-M, whi ch barr ed newly -issued i nsuranc e poli cies that limit “the time to file a claim or commence suit for u n i n s u re d motorist benef its to less than three
y ear s.” At issue in the instant appea l is the district court’s ruling : [S overe ign’ s] cited decisions do not stand for t h e p roposi tion that the Michig an Supreme Court would extend the C o m missioner’s Orde r to encompa ss insurance cause s of action beyond the “uninsured motorist benef its” claims, which alone is the ty pe of claim which the Commi ssioner’s Dec ember 2005 Orde r purports to g overn. [S overe ign’ s] supplemental arg ument lacks any identifiable support in Michig an law for the simple rea son that the Commi ssioner’s “orde r and case law issued befor e and afte r the Orde r” all arose in the s p ec i fi c context of no-fa ult insurance policies for uninsured motorist coverage . The policy at issue here , by contra st, is an optional aviation insurance policy for cer tain phy sical damag e to an ai rc raf t, rende ring the Orde r i napplicable and cited ca s e law inapposit e. I t is not the pl ace of a Michig an court – let alone a fe d eral court sit ting only in diversity – to decide whether policy considerations might war rant extendin g an age n cy ’s rule or decision to a party , transac tion, contra ct o r ev ent which the ag ency ’s written rule does not purport to cover . Such development or expansion of the State’s intrusion into private contra cts i s the province of the State L eg islature and the executive ag ency to which t h e leg islature has deleg ated authority in the field. Indeed, the Michig an Supreme Court has noted that under the applicable M i ch i gan statute – Mich. Comp. L aws § 500.2236(5) – only the Commi ssioner of Insuranc e and Financi al Service s has

2authority to invalidate insurance contra ct provisions o n t h e g round of

unrea sonablene ss.[ ] 1
Be cause the district court corr ect ly o b s e r v e d that Sovereig n cited no authority supporting that the 2005 Prohibiti on Orde r ex tended bey ond uninsured and unde rinsured motorist cove rag e, or to this aviation policy , we AF FI RM.

Sovereig n could have but appar ently did not file a complaint with the State of 1 Michig an’s Of

fice of F inancial a

nd Insuranc e Regulation.

3