Graham v. State Farm Mut. Auto. Ins. Co.
Unpublished. Decided February 18, 2014 Michigan Court of Appeals Docket No. 313214.
The plaintiff was injured in an auto accident and filed suit to recover PIP benefits. During that lawsuit, the plaintiff discovered the defendant was not insured at the time of the accident. The plaintiff did not amend her complaint or otherwise add any claim for payment of uninsured motorist benefits, but she settled the PIP claim and then filed suit to recover UM benefits.
The trial court granted summary disposition to the defendant-insurer on the basis that the plaintiff should have litigated all issues related to the auto accident in one lawsuit. The Court of Appeals affirmed. A plaintiff’s claim is barred if a prior action between the same parties was decided on the merits and the subsequent claim at issue could have been raised and decided in that prior case.[su_box title=”Kallas & Henk Note”] While a claim for PIP benefits and a claim for UM benefits involve different legal issues, the same parties and facts are necessary to determine both causes of action. [/su_box]
Leggett v. Tabbachini
Unpublished. Decided February 20, 2014 Michigan Court of Appeals Docket No. 31160.
The plaintiff had requested “full coverage” when obtaining insurance for her vehicle in 2003. She learned, after being involved in an accident with an uninsured driver in 2004, that she did not have uninsured motorist benefits. The plaintiff filed suit in 2010 for, among other things, breach of contract. The trial court dismissed the plaintiff’s case, and the Court of Appeals affirmed.
The Court noted that the time for bringing a claim for breach of contract is 6 years from the date the claim arose. The plaintiff’s claim was that the defendants failed to include a coverage provision (UM benefits) when the policy was issued, and she alleged that the breach occurred when she discovered that the defendants had failed to include this coverage. The Court of Appeals held that the breach occurred when the defendants failed to include coverage that was supposed to be included in the contract, i.e.., when the policy was issued. Because that was more than 6 years before the plaintiff filed suit, her claim was barred by the statute of limitations.[su_box title=”Kallas & Henk Note”] The Court also could have dismissed the case on the basis that an insured is required to read and understand a policy at the time it is issued, and the plaintiff is precluded from asserting coverage when she could have discovered the policy provided was not consistent with the plain terms. [/su_box]
Micallef v. AAA Auto Club of America, Inc
Unpublished. Decided February 20, 2014 Michigan Court of Appeals Docket No. 313068.
The plaintiff was injured in an auto accident while driving a vehicle for his employer. The at-fault driver was insured under a policy providing the minimum coverage limits, which was insufficient to cover all of the medical care the plaintiff required. The plaintiff’s insurer denied his claim for under-insured motorist benefits on the basis that he was driving a vehicle provided by his employer, and the plaintiff sued. The trial court granted summary disposition to the insurer and the Court of Appeals affirmed.
The plaintiff’s insurance policy excluded coverage for injuries sustained while occupying a vehicle furnished by an insured’s employer and operated in the course of employment, unless the vehicle was the insured’s auto. The plaintiff’s only argument was that his employer did not furnish the vehicle to him because his employer did not own the car. The Court determined, however, that the exclusion was not ambiguous and did not require the employer to own the furnished vehicle.[su_box title=”Kallas & Henk Note”] To accept the plaintiff’s argument, the Court would have had to add conditions on the exclusion which are not written into the policy. The Court rejected this argument and construed the exclusion according to its plain terms. [/su_box]
Wells Fargo Bank, N.A. v. Null
Published. Decided March 6, 2014 Michigan Court of Appeals Docket No. 312485.
This dispute arose from a fire that destroyed a house owned by the insured, but which was being purchased by the insured’s sister-in-law. The plaintiff bank held a mortgage on the premises, which was in the owner’s name. The bank was notified that the purchaser had made a claim for the loss and that the defendant-insurer would make any insurance benefits checks payable to the bank and the purchaser. The insurer subsequently discovered that the named insured did not reside on the premises, and denied coverage on the basis that the house did not qualify as an insured premises. In a prior action brought by the named insured. The trial court agreed and found no coverage, and the Court of Appeals affirmed (see Michigan Coverage Decisions, Issue 172.)
The plaintiff bank filed this action claiming a right to payment under the insurance policy, even though the residence was not an insured premises, on the basis that the mortgage clause in the policy constituted a separate contract between the insurer and the plaintiff and that the insured’s coverage issues did not affect whether the plaintiff was entitled to coverage. The trial court granted summary disposition to the insurer, however, the Court of Appeals reversed. The Court analyzed the difference between an ordinary loss payable clause, in which a mortgagee is paid only as its interests may appear, and a standard loss payable clause, in which a mortgagee is entitled to coverage for a valid claim without regard to any act or omission of the named insured. The Court determined that the loss payable clause at issue was a standard clause, that the plaintiff had a valid claim for the loss, and that the failure of the named insured to comply with policy conditions did not affect the plaintiff’s right to payment for the loss.[su_box title=”Kallas & Henk Note”] The Court rejected the insurer’s argument that the policy did not cover the loss because the residence was not insured property by definition and that the plaintiff could not have a valid claim as a result. The Court reached this conclusion based on an analysis of one condition in the mortgage clause, which required the plaintiff to provide notice of a known change in occupancy. The Court’s rationale was that, if the insurer required notice of a change in occupancy, the change in occupancy must not have been a factor in whether coverage would be made available to a mortgagee. The Court remanded the case to the trial court, however, for a further determination as to whether the plaintiff complied with policy conditions precedent to coverage, so this decision may not be the final word. [/su_box]
Micou v. Progressive Mich, Ins. Co.
Unpublished. Decided March 13, 2014 Michigan Court of Appeals Docket No. 311937.
The plaintiff was notified that his auto policy was being canceled for non-payment of premium and he was informed of the date of cancellation. Prior to cancellation, he called the defendant and requested an additional day to make the premium payment. The defendant allowed the additional day, however, the plaintiff did not pay the premium that was due as he had agreed. On the evening of the day on which he was supposed to have paid the premium, the plaintiff was involved in a serious motor vehicle accident. He attempted to pay the premium on the following day to continue his now-canceled policy, but the defendant refused and denied no-fault benefits.
The plaintiff filed suit and argued that, because the defendant granted an additional day in which to pay the premium, the effective date of the policy was extended past the cancellation date to the new date permitted for making payment and the defendant should be estopped from denying coverage. The trial court disagreed and granted summary disposition to the defendant. The Court of Appeals affirmed. The agreement was only that the plaintiff had an additional day to pay the premium due and that, if the payment was not received, the policy would be cancelled effective as of the original cancellation date. The plaintiff did not pay the premium due even on the extended date for payment, and the policy was properly canceled.[su_box title=”Kallas & Henk Note”] The Court relied on the ordinary language used in extending the date for payment, and the plaintiff was not entitled to benefits under the canceled policy because he did not keep the policy in force. [/su_box]