Goldstein v. Fidelity and Guaranty Insurance Underwriters, Inc.

Goldstein's (plaintiff) properties were covered by a Fidelity (defendant) policy requiring a working sprinkler system, but a temporary binder from the placing agency waived that requirement without Fidelity's knowledge. After a fire destroyed two buildings while sprinklers were inoperative, Fidelity initially paid a partial claim before discovering the waiver, then agreed to pay in full ($713,314, holding back $391,175 payable only upon repair). A second fire later destroyed the remaining buildings, again with sprinklers inoperative, and Fidelity denied that claim; Goldstein sold the properties unrepaired and sued for estoppel and breach of contract, and after Goldstein moved for summary judgment, the district court instead granted summary judgment sua sponte to Fidelity.