A simmering legal feud over a vehicle fire that scorched a Michigan research facility leased by Mercedes-Benz’s North American research division has ended in a confidential settlement, closing the book on a $1 million insurance spat that raised questions about liability, fuel handling, and lease obligations.
U.S. District Judge Nancy G. Edmunds officially dismissed the case with prejudice on Friday after both sides informed the court earlier in the week that they had struck a deal. The insurer, Pioneer State Mutual Insurance Co., agreed to drop its claims against Mercedes-Benz Research and Development NA Inc., with each party absorbing its own legal costs.
While the precise terms remain sealed, the underlying firestorm has left behind a trail of legal sparks and scorched reputations.
Fuel Mishap Ignites Legal Flames
The blaze ignited in 2021 at an Ann Arbor facility leased by Mercedes-Benz from Airport Boulevard Associates LLC, after a company employee attempted to transfer gasoline between two vehicles—a risky maneuver that, according to filings, triggered a destructive fire.
Pioneer, which insured the commercial property, paid out over $1 million in fire-related damages. The company then turned to Mercedes-Benz and its general liability insurer, Allianz Global Risks US Insurance Co., demanding reimbursement. When those efforts went up in smoke, Pioneer filed a lawsuit in Michigan state court in 2022, which was later escalated to federal court.
In a strategic shift, Pioneer added Mercedes-Benz’s property insurer, HDI Global Insurance, to the complaint—but that entity was dismissed from the case by May 2023.
