The Honor able Solomon Oliver, Jr., United St ates District Judge f or the Nor

thern * District of Ohio, sitting by desig nation. NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 07a0357n.06 F iled: May 25, 2007 No. 06-1632 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT AN N A RB OR

P UB LIC SCH OOLS , P laintif f-App ellant,

v. DIAMOND STATE INSURANCE COMP ANY, Defendan t-Appellee. ) ) ) ) ) ) ) ) ) ) ON AP P EA L F RO M THE UNITED STAT ES DIS TRICT COURT F OR THE E ASTERN DISTRICT OF MICHIGAN

Before: KEITH and COLE, Circuit Jud ges; and OLIVE R, Distric t Judge. * P ER CURIAM . Plaintiff-Appellant A n n Arbor Publi c Schools (“A APS”) appe als the district court’s de nial of its motion for summary judgme nt and g rant of summar y judgme nt in favor of De fenda

nt-Appellee Diamond State I nsuranc e C ompany (“D iamond State”). For the r easons se t forth below, w e AF F IRM the district court’s judg ment. I. I n April 2000, eleve n employ ees f iled a cla ss action g rieva

nce a g ainst AAPS alleg ing r ace discrimination in employ ment. Approxim ately

eig ht months l ater , six of these e mploy ees f iled administrative cha

rg es of discr imination with t he Equa l Employ ment Opportunity

Commi ssion (“ EE OC ” ). On Marc h 27, 20 01 , the se six emp loye e s we re iss ue d r ig ht- to- su e le tte rs by the EE OC , wh i ch we re co pied to AAPS. At some point, t hese e mploy ees a lso filed complaints with theNo. 06-1632

Ann Arbor Pub. Schs. v. D iamond State Ins. Co. Pag e 2 Michig an De partment of Civil Rights (“MD CR”). L a t e r i n2 0 0 1 , A A P S r e qu e s t e d qu o t e s f o r l e g a l l i a

b i l i t y i n s u r an c e f

r o m t h e A p r i l l A g e n c y, I nc . A APS a

pp lie d f or ins ur anc e wi th D e e rf

ie ld I ns ur anc e Com

pa ny ; and on Au g us t 16, 20 01 , it applied for

insurance with Diamond State. The Diamond State application containe d sever al questions reg ardingpending complaints or investig ations. Question 14 of the a pplication inquired whether the educ ational entity

or any person to be insured under the policy

had bee n subject to any invest igat ion by

a re g ion a l, s tate , o r f

e de ra l a g e nc y

wi thi n th e pa st f

ive y e ars . In r e sp on se to t his question, AAPS wr ote “EEOC/State-dismissed as unsubstantiated. 3 EEOC claimants we re issued rig ht to sue letters by

the Depa rtment of Just ice.” (J.A. at 429). I n a co v er age comparison shee t dated July

24, 2001, Aprill Ag ency informed AA PS t h at bot h the Diamond State policy and the De er fi el d I n s u ran ce C o mp an y

p o l i c y e x c l u d e d “ [ p ] r i o r c l a i m s , p r i o r

& p e n d i n gl i t i g a t i o n , k

n o wl ed ge of occ urre nce that may

rea sonably

be expected to r esult in claim.” Id . at 476. AAPS ulti mately

selec ted a c laims-made Educ ators L eg al L iability insurance policy

from Diamond State, for the policy period of Aug ust 1, 2001 to August 1, 2002. Ge nera lly , the Policy

cover ed “loss and de fense expenses in excess of t he st ated deductible and up to the stated limi t of liability for any claim due to a W rong ful Act to which this policy applies[.] ” Id. at 246. Under the Pol ic y , “ Wro ng fu l A c t me ans any a c tua l or a lle g e d e rr or , mi sst a te me nt, mis le a din g state me nt, a c t, omission, neglec t or brea ch of duty by the Educational Entity

or [other insureds].” Id. at 249. The Pol ic y inc lud e d s e ve ra l li a

bil ity e xclu sio ns . “ Exc lus ion N” pr ov ide s th a t th e Pol ic y do e s n ot a

pp ly to any loss or defe nse expense for any claim or c ircumstanc e “b as ed on any circ umstance or

fac t known at the time of the application which any I nsureds c ould rea sonably expect would result in aNo. 06-1632

Ann Arbor Pub. Schs. v. D iamond State Ins. Co. Pag e 3 claim[.] ” Id. at 247. The Policy also contains a pr ovision statin g that Diamond State will pay for AA PS’ s lo ss a

nd de fe ns e e xpe ns e s fo r a c la im du e to a c ov e re d wr on g fu l a c t on ly if the “ [c]la im i s first made a g ainst the I nsureds during the policy period[.] ” Id. a t 24 6. Un de r t he Pol ic y , a

“ [c]la im

means a ny written dema

nd for money

damag es to which [the] pol icy applies.” Id. at 247. On Se pte mbe r 2 0, 20 01 , s e ve n o f t he e mpl oy e e s th a t ha d f

iled th e afor e me nti on e d c la ss

a c tio n g ri e va

nc e (s ix of

wh om h a d a lso fi le d the abo ve-r e fe re nc e d E EO C c omp la int s) fi le d s uit ag ainst AAPS in the Washtenaw County Circuit Court, in a case sty led Brown v. Bd. of Educ. of the An n Arbo r P ub lic Sc ho ols , No. 01-1106 CL , asser ting mult iple fede ral and state claims allegingrac e discrimination and re taliation. AAPS ti mely notified Diamond State of the law suit and reque sted

c ov e ra g e un de r the Pol ic y . I n a le tte r date d Janu ary 2, 20 02 , Di a mon d State de nie d A APS ’s re qu e st for c overa g e with re spect to six of t he seven plaintiffs on the g rounds that AAPS had re ceive d notice, befor e apply

ing f or insuranc e, of the EEOC char g es filed by these six pl aintiffs. On June 4, 2002, Diamond State sent anothe r letter reiter ating its denial and addinga re fer ence to Ex clusion N, as an additional basis to de ny cover ag e. AAPS se ttled the Br own lawsuit in Dece mber 2003. Diamond State has continued to re fuse to provide cover ag e. On September

28, 2004, AAPS filed sui t ag ainst Diamond S tate in t he district cour t alleg ing brea ch of c ontrac t and see king a declaratory judgme nt. On M arc h 1, 2005, Diamond S tate filed a motion to dismiss or, alternatively , for summ ary judgme nt. On S eptember 7, 2005, AAPS filed a

c ro ss- mot ion

fo r s umm ary

jud g me nt. On Ma

rc h 21, 20 06 , af

te r a he ari ngon

the pa rt ie s’ mot ion s, the district court issu ed an order denying A APS’s moti on for summary judgme nt and g ranting summary judgme nt in favor of

Diamond State. Ann Arbor Pub. Schs. v. D iamond State Ins. Co. , 421No. 06-1632

Ann Arbor Pub. Schs. v. D iamond State Ins. Co. Pag e 4 F. Supp. 2d 1034 (E.D. Mich. 2006). Specifica lly , the district c ourt held that Ex cl u s i o n N barred

c ov e ra g e be c a

us e a t th e tim e of the a

pp lic a tio n fo r ins ur anc e , AA PS c ou ld r e a so na bly e xpe c t a c la im would result from the e mploy ees’ filing of a cla ss action g rieva

nce a nd EEOC cha

rg es. Se e id . at 1037-38. The pr esent a

ppeal timely

ensued. II. “This Court revie ws a g rant of summary judgme nt de novo.” Howard ex re l. Howard v. Baye s , 457 F.3d 568, 571 ( 6th Cir. 2006). Be cause the denial of AAPS’s cross- motion for summary judgme nt was “de cided on purely leg al grounds[,] ” we also revie w t hat dec ision de novo. Citi zens Ins. Co. of Am. v. MidMic higan Health ConnectCare Network Plan , 449 F.3d 688, 691 ( 6th Cir. 2006). III . AA PS argue s th a t th e dis tr ic t c ourt e rr e d in ho ldi ngthat E xclu sio n N ba rs c ov e ra g e be c a

us e (1) the r isk of the Brown la ws uit wa s d isc los e d p ri or to i ssu anc e of

the Pol ic y

and Di a mon d St a te fa ile d to sp e c if

ic a lly and c le arl y e xclu de the dis c los e d r isk fr om c ov e ra g e , a

nd (2 ) t he Pol ic y a s a wh ole is a mbi g uo us and thu s sh ou ld be int e rp re te d in fa vo r of c ov e ra g e . AA PS f ur the r a rgue s, in the alter native, that the district cour t erre d in holding that AAPS rea sonably could have expected that the prior EEO C charg es would re sult in a claim beca use the ninety

day statute of li mitations for f iling

a fede ral law suit had elapsed a nd that issues of fa ct re main as to whethe r AAPS could have

re a so na bly e xpe c te d th e laws uit . We re je c t A APS ’s argume nts fo r t he fo llo wi ngthr e e re a so ns . 1. First, Dia m o n d S t ate spe cifica lly and cle arly

excluded cover ag e for

the Br own laws uitNo. 06-1632

Ann Arbor Pub. Schs. v. D iamond State Ins. Co. Pag e 5 t h r o u g h t h e i n c o r

p o r a t i o no f

E x c l u s i o nN i ni t s P o l i c y. J urisdiction being based on d i v ersity of citizenship, 28 U.S.C . § 1332, we must apply the substantive law of Michig an. See Erie R.R. Co. v. Tompkins , 304 U.S. 64 (1938). Unde r Michig an law, the pr oper inter

pretation of an insuranc e policy and dete rmination of whethe r the policy lang uag e is ambig uous are questions of law to be de termined de novo by the cour t. Klapp v. United Ins. Group Agenc

y , Inc. , 6 63 N. W.2 d 4 47 , 4 51 (M ic h. 20 03 ); He nd e rso n v . S tate Fa rm Fi re & Cas

. Co. , 596 N.W.2d 190, 193 (Mich. 1999). F urther, in Michig an, “[ a]n insurance policy is construed in a c c or da

nc e wi th wel l- se ttl e d p ri nc ipl e s o f c on tr a c t c on str uc tio n[,]” bu t “ re ma in s ub je c t to statutory regulations.” Farmers Ins. Exc h. v. Kurzmann , 668 N.W.2d 199, 203 (Mich. App. 2003)

. AA P S i s co rr ec tt h at i nce rt ai nci rc u m s t an ce s wh er e ari s k t h at i s wi t h i nt h e ge n er al co v er age of an in sura nc e po lic y

ha s be e n dis c los e d to the ins ur e r p ri or to i ssu anc e of

the po lic y , th e ri sk

wi ll be cove red unle ss the insurer spe cifica lly and cle arly

excludes the disclosed risk from c overa g e. See, e.g. , Johnson v. Am . Fid. Fire Ins. Co. , 88 N .W. 2d 91 3 ( Mic h. 19 58 ); W

ilds v. Fid. Deposit Co. , 214 N. W. 1 18 (M ic h. 19 27 ); Cro ssm an v . Am

. In s. Co. of N e war k , 164 N.W. 428 (Mich. 1917). He re, it is hi g hly d o u b t fu l that AAPS’s statement on the insuranc e application—that “EEOC/Statedismiss ed as unsubstantiate d. 3 EEOC claimants we re issued r ight to sue letters by the Depa rtment of Justi c e ” — c ou ld b e c on sid e re d a su ff ic ie nt d isc los ur e of

the ri sk of the laws uit br ou g ht by the six Brown plaintiffs. Howe ver, e ven assuming that AAPS’s appl i cation stateme nt was a suf ficient disclosure, Diamond State clear ly excluded the re lated risk fr om cover ag e throug h Ex clusion N. I n Michig an, an insura

nce c ompany

may “‘de fine or limit the scope of cover ag e as longas the pol icy lang uag e’” is unambiguous a nd does not contravene public policy or law. Kurzmann , 668No. 06-1632

Ann Arbor Pub. Schs. v. D iamond State Ins. Co. Pag e 6 N. W

. 2 d at 2 0 3 -0 4 (q u o t i n g Heniser v . Frankenm uth Mut. Ins. Co. , 534 N.W.2d 502, 505 (Mich. 1995)). The lang uag e of a n insu ra n ce co n t ra ct is ambiguous if it is subject to more than one

rea sonable interpr etation. Klapp , 6 63 N. W.2 d at 45 3; Farm Bureau Mut. Ins. Co. of Mich. v. Nikk el , 596 N.W.2d 91 5 , 9 1 9 (M ich. 1999). Exclusion N provides that the “policy does not apply

to any loss or defe nse expenses for any claim .

. . based on any circ umstance or

fac t known at the time of the application which any I nsureds could rea sonably expect would result in a cla im[ .]” (J .A. at 246- 47). AAPS cont en d s t h at E x cl u s ion N is ambig uous but provides littl e (if any ) explanation or

c on fl ic tin g int e rp re tatio n o f t he pr ov isi on . I n su

pp or t of its argume nt, AA PS r e lie s o n a F ir st C ir c uit

case , Stratford Sch

. Di s t

. v. Employers Re ins. Corp. , 105 F.3d 45 ( 1st Cir. 1997). The policy involved in Stratford “provide [d] that it does not cover if ‘the Insured ha [d ] b ec o m e awa re of a proce eding , event or development which had resulted in or c ou ld in the future re

su lt in the instit ution

o f a c la im a g a in s t t h e I n s ured.” Id . at 47 . T he Court of Ap pe a ls f

or the F ir st C ir c uit

fo un d th is clause to be ambig uous beca use rea ding the policy , along with the application questionnaire, it was

un c le ar what matte rs we re e xclu de d: t ho se that possibly c ou ld r e su lt, tho se that re as on ab ly c ou ld

re su lt, or tho se that probably could re sult. Id. Howeve r, Stratf or d is i na pp os ite to t

he pr e se nt c a se beca use the Diamond State Poli cy ’s E x clusion N clea rly delineate s the applica

ble standar d,

e xclu din g c la ims of

wh ic h “ I ns ur e ds could reasonably e xpec t would result[,] ” (J.A. at 247) (empha sis added), a

nd thus does not pose the ambig uity prese nt in Stratford. The court must g ive the lang uag e contained in the policy its plain and or d inary meanings o t h at t echnic al and stra ined construc tions are avoided.

. . . Where the lang uag e of a

n insurance policy

is clear and unamb i g uous, it must be enf orce d asNo. 06-1632

Ann Arbor Pub. Schs. v. D iamond State Ins. Co. Pag e 7

AAPS does not argue in their brie fs that Exclusion N contravene s public policy , and we

1 find no indication of any

public policy

violation. See ge nerally Truck I ns. Exch. v . A sh lan d O il, Inc. , 951 F.2d 787, 790 ( 7th Cir. 1992). written. Cour

ts mu s t b e c ar e f

u l n o t t o r e a d

ana mb igu it

y in to a p o li c y w h e r e n o ne e xists

. Century Sur. Co. v. Charron , 583 N.W.2d 486, 488 (Mich. App. 1998). More over, [e] x clus i o n ar y clause s in insurance polices ar e strictly construed in f

avor of the insured. Coverag e under a poli cy is lost if any exclusion in the pol icy applies to an insured’s pa

rticular c laims. Clear an d s p ec ific exclusions must be g iven ef fec t beca use an insura

nce c ompany

cannot be liable for a

risk it did not assume. Hayley v. Allstate Ins. Co., 686 N.W.2d 273, 275 (Mich App. 2004); see Charron , 583 N.W.2d at 48 8; Auto-Owners Ins. Co. v. Churchman , 489 N.W.2d 431, 434 (Mich. 1992). A plain re ading of Exclusion N— read both sepa rate ly and withi n the backdrop of the Policy

a s a w ho le— p re se nts on ly on e re a so na

ble int e rp re tatio n: C la ims ba se d o n c ir c ums tanc e s o r f a c ts known at the tim e of the application that AAPS could reasonably expect would result i n a cla im are excluded from the Policy . Acc ording ly , even when construingthe exclusionary clause in favor of AAPS, Ex clusion N “must be g iven ef fec t” bec ause it is clea

r, spec ific, and not ambiguous. Hayley , 686 N.W.2d at 275. 1 The fa ct that Diamond State could have provide d a more clear and spe cific e x clusionary clause , such as the one provided by Dee rfield I nsuranc e Company , is immater ial. An exclusionary clause need not be the most clea r and spe cific possible; it need only be unambiguous and su

ffi c ie ntl y clea r and spe cific. See M

ich. Tp. Participating Pl an v. Pav olich , 591 N.W.2d 325, 328 (Mich. App. 1998) (“ [I ]f a contra ct, even an inartfully worde d or clumsily arr ang ed contr act, f

airly admits of but one interpr etation, it may not be said to be ambiguous or f atally unclea r.”)

.No. 06-1632

Ann Arbor Pub. Schs. v. D iamond State Ins. Co. Pag e 8 2. Second, the Policy

rea d as a w hole is not ambiguous. AAPS arg ues that the P o l i cy i s ambig uous and there fore should be interpre ted in favor of

cover ag e. Howe ver, A APS does not provide any explanation for why

it considers the contra ct, as a whole, to be ambig uous and does not point to any provisions that contra dict eac h other. As it does not appea r that any provisions of the contra ct “ir re co n ci l ab ly conflict with ea ch other ” or “ are capa ble of c onflicting interpre tations[ ,]” Klapp , 6 63 N. W.2 d. a t 45 3, we c on c lud e that th e Pol ic y is not ambiguous. 3. Th ir d, AA PS r e a so na

bly c ou ld h a ve e xpe c te d th a t th e EE OC c ha rg e s w ou ld re su lt in a

c la im, and no issue of f

act r emains as to this matter. AA PS argue s, in t

he a lte rn a tiv e , th a t th e dis tr ic t c ourt e rr e d in ho ldi ngthat A APS re a so na bly could have expected that the pr ior EEOC cha rg es would re sult in a claim beca use the ninety

day statut e of lim itatio ns date fo r fi lin g a fe de ra l laws uit ha d e la ps e d. Th is argume nt is wi tho ut m e ri t, and the district c ourt proper ly reje cted it below. The fac t that the EEOC rig ht-to-sue letter s stated that claimants had nine ty day s to file su i t i n fe d er al court a nd that this deadline had pa ssed at the time AAPS m ad e the insurance a pplication does not diminish t he fa ct that AAPS should have

re a so na bly e xpe c te d th a t sta te claims would be filed at a later date. In fac t, the EEOC rig ht-to-sue letters specific ally stated, “The time limit f or filing suit ba sed on a state claim m ay b e d i ff er ent.” (J.A. at 159). Moreove r, the fa ct that the EEOC a nd MDCR did not find the employ ees’ claims to beNo. 06-1632

Ann Arbor Pub. Schs. v. D iamond State Ins. Co. Pag e 9

su bs tanti a te d d oe s n ot p ro vid e any re a so na ble ba sis to n ot e xpe c t that a c la im wo uld be e ve ntu a lly broug ht by

the employ ees. The filing of EEOC and st ate a dminist rative c harg es ar e we ll-rec og nized prec ursors to a lawsuit, irrespe ctive of the outcome at the administrative level. F urther, the rec eipt of notice of t h e MDCRinvestigations and filing of the class a ction g rieva

nce a lso put AAPS on

no tic e to r e a so na

bly e xpe c t a pr os pe c tiv e state laws uit

.

IV. For the af oreme ntioned rea sons, we AF F IRM the district court’s judg ment.