Traverse City, Michigan — Peninsula Township in northern Michigan has become the center of a contentious legal dispute involving local wineries, which are suing for what they claim are millions of dollars in lost profits. The township’s approach to the lawsuit, particularly its handling of insurance coverage, has sparked a debate among local officials and candidates about fiscal responsibility and governmental transparency.
At the heart of the issue is whether the township should have defended against the lawsuit and the clarity surrounding its liability insurance coverage. Township trustee candidates from the Lou Santucci/Curt Peterson slate, including Kate Jerman, JP Milliken, and Fred Swaffer, have criticized the current township board for not providing sufficient details on the insurance coverage available to handle claims from the Wineries of Old Mission Peninsula (WOMP).
The legal battle hinges on the specifics of the township’s insurance policies. These documents, which determine coverage and exclusions, have been scrutinized amid the litigation. Each count of WOMP’s complaint could either be covered or excluded, depending on the interpretation by the carriers, particularly how they view the incidents — whether as 11 separate occurrences or as a single event tied to the aggregate demand exceeding $130 million.
Notably, the policy issues include whether certain claims, such as alleged constitutional violations or civil rights infringements under Section 1983, are insurable under the terms. Moreover, the period of coverage could affect which policy year applies to claims that purportedly stretch back 10 to 20 years.
As the case progresses, the township board has been cautious about its public statements, opting to wait for the court’s definitive ruling before making any predictions or statements about specific insurance coverage outcomes. This stance has been a point of contention for those seeking more immediate transparency from township leaders.
In response to these challenges, the township has made changes to its legal representation. Initially represented by counsel provided by the insurers, the township demanded a shift toward more seasoned attorneys who have taken the lead in the past two years.
The financial stakes are high, with the wineries seeking substantial damages for what they claim are lost profits due to actions or restrictions imposed by the township. The legal fees and potential damages could significantly impact the township’s financial health, though some costs have been mitigated through the insurers’ payments for defense.
The electoral context adds another dimension to the dispute, as incoming trustees will need to balance the interests of the local community against potential financial liabilities from the lawsuit. Candidates have expressed varying degrees of alignment with the wineries’ position, and their election could influence the township’s defense strategy.
This ongoing saga reflects broader challenges faced by local governments in managing legal risks and insurance in disputes with significant financial implications. As residents and officials await the court’s ruling, the outcome will not only affect the immediate parties but also set precedents for how similar conflicts are handled by communities with intertwined economic and cultural interests in their local industries.
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