Michigan Coverage Decisions, Issue 193

Barnes v. State Farm Mutual Automobile Insurance Company

Unpublished, Decided December 17, 2015, Michigan Court of Appeals Docket No. 323134

A non-resident caretaker took out an insurance policy on a car owned jointly by a daughter and her mother. When the daughter got into an accident, she sought PIP benefits. The insurer successfully denied benefits on the basis that the daughter owned and operated a vehicle for which she had no insurance because she was not covered under the caretaker’s policy, and was not a relative resident of the caretaker.

In a subsequent case, the same plaintiff sued the defendant driver, and insurance carrier, for UM/UIM benefits. The trial court denied the insurer’s summary disposition and the insurer appealed. Ultimately, this suit was barred by the doctrine of res judicata because the original claim was decided on the merits, the parties were the same, and the current matter could have been resolved in the prior action.

Kallas & Henk Note
The Court relied upon the doctrine of res judicata to bar a subsequent UM/UIM claim against an insurer after the plaintiff’s PIP claim against the insurer was adjudicated on the merits.

 

Charter Township of Shelby v. Argonaut Insurance Company

Unpublished, Decided December 22, 2015, Michigan Court of Appeals Docket No. 324447

In a declaratory action between a municipality and an insurance company, the insurance company sought to exclude defense and coverage to the municipality based on allegations of wrongful acts by plain-clothes police officers based on whether the officers were conducting law enforcement activities when they committed the alleged wrongful acts. The Trial Court ruled that the insurance carrier had a duty to provide coverage.

The Court of Appeals ultimately agreed with the trial court that the definition of “wrongful acts” in the policy included “any act, error or omission flowing from or originating out of a law enforcement related activity”, and the policy provided coverage for any wrongful act during the course and scope of law enforcement activities. The Court of Appeals found that the insurer had a duty to defend and had failed to demonstrate that the exclusion it relied on was applicable to eliminate coverage.

Kallas & Henk Note
The Court used the “contra-insurer” rule when it evaluated the exclusionary provisions. Because the claims arguably fell within the policy coverage, the duty to defend was triggered.

 

Home-Owners v. Smith

Published, Decided January 12, 2016, Michigan Court of Appeals Docket No. 322694

In this declaratory action, plaintiff insurers sought to exclude defense for a 16-year old insured who committed sexual assault. The trial court initially denied the plaintiffs’ summary disposition motion on the basis that a minor’s intention couldn’t be determined as a matter of law.

The Court of Appeals reversed on the basis of the minor insured’s own deposition testimony revealed that he had the requisite intent, thus the actions were not accidental and were not an “occurrence”.

Kallas & Henk Note
The Court distinguished the prior case law addressing whether a minor’s intent to commit sexual assault could be determined as a matter of law.

 

Klein v. King

Unpublished, Decided January 19, 2016, Michigan Court of Appeals Docket No. 323755

A plaintiff without a driver’s license asked a stranger to operate his wife’s vehicle, and the stranger got into an accident and then fled the scene. Plaintiff sued his wife as the owner of the vehicle claiming negligence should be presumed due to the driver fleeing the scene. The trial court granted the defendant’s motion for summary disposition on the basis that negligence cannot be inferred from the circumstances presented and res ipsa loquitor.

The Court of Appeals affirmed. They distinguished the case from Johnson v Austin, 406 Mich 420, 434(1979) which addressed the issue of the presumption of negligence in the context of the Motor Vehicle Accident Claims Act. The specific facts and circumstances did not allow the plaintiff to invoke res ipsa loquiter, or presume negligence in other ways.

Kallas & Henk Note
The Court addressed the very unique factual situation presented in its ruling that the defendant could overcome a presumption of negligence sufficient to eliminate owner’s liability.

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