Insurer wins dispute over fire, medical pot growing in basement

This article was originally published on the Marijuana Patients Organization site on February 25, 2015.

BAY CITY, Mich. (AP) – An insurance company that didn’t know about a medical marijuana nursery in a Bay City basement can recover more than $130,000 paid after the house was destroyed by fire.

A federal appeals court on Tuesday upheld a decision by U.S. District Judge Thomas Ludington. Kasey McDermott’s home burned down in 2012 when her then-husband accidentally started a fire while smoking oil extracted from marijuana leaves.

Nationwide Mutual Fire Insurance paid more than $130,000 after the fire, but it didn’t know that Brien Matthews was growing marijuana in the home. The company sued to recover the money, saying the undisclosed practice violated the insurance policy.

Matthews was licensed to use medical marijuana and grow it for others. He had spent $20,000 on equipment, including dirt, fertilizer and lights.