Michigan Coverage Decisions, Issue 33

Auto Club Group Insurance Company v Robert Paul Burchill et al.

Published January 29,2002 State of Michigan Court of Appeals Docket Number 222555.

In this declaratory action, Plaintiff sought a ruling that it did not owe a duty to defend or indemnify its insured under a homeowners policy in a suit to recover for third party injuries during a barroom brawl. Plaintiff asserted that no duty existed because of an intentional acts exclusion and a criminal acts exclusion. The Trial Court denied the insurer’s motion for summary disposition based on the insurer’s burden to show that the actual injury must have been caused intentionally. The Trial Court determined an “accident”, occurred and the intentional acts exclusion would not apply.

On appeal, the insurer argued that injuries resulting from a fight do not constitute an “occurrence” as defined and coverage is not triggered. The insurer argued that the intentional acts exclusion applied. The Court of Appeals reversed the Trial Court finding no duty to defend or indemnify. The Court of Appeals determined that no “accident “ occurs when an insured’s intentional acts create a direct risk of harm despite a lack of intent to injure. The intentional acts exclusion also applied to eliminate coverage.

[su_box title=”Kallas & Henk Note”] The Court of Appeals follows the Michigan Supreme Court in Nabozny v. Burkardt, 461 Mich 471 (2000) to define occurrence and finds an act creating a direct risk of harm is intentional despite no intent to injure. The intentional acts exclusion does not provide an exception for self-defense. [/su_box]

 

Tamara Stoddard v Citizens Insurance Company of America

Published January 29, 2002 State of Michigan Court of Appeals Docket No. 225493.

Plaintiff filed a breach of contract action against her husband’s business insurer for uninsured motorist benefits. The Plaintiff was injured while driving her employer’s car which did not carry uninsured motorist coverage. Defendant insurer denied coverage because the accident did not involve a covered vehicle.Defendant argued that only one covered vehicle existed. Plaintiff argued uninsured motorist coverage was provided to an “insured” rather than a vehicle. The Trial Court granted summary disposition in favor of the insurer, concluding that no coverage existed because no covered vehicle was involved.

The Court of Appeals determined that uninsured motorist coverage applied in circumstances beyond those involving the covered auto. Under the definition of “insured”, the policy specifically limited coverage for persons other than the named insured and family members. The Court determined that the limitation was included because the policy contemplated uninsured motorist liability for insureds rather than autos. The Court determined that the policy intended to follow the named insured and family members when they were not occupying the covered auto. The Court further stated that if the terms of the policy were considered ambiguous, the result would be the same, interpreted in the Plaintiff’s favor.

[su_box title=”Kallas & Henk Note”] The Court of Appeals determined that uninsured motorist coverage was a portable coverage under the terms of the contract.  [/su_box]

 

Lansing Board of Water and Light v Deerfield Insurance Company

Published. February 6, 2002. US District Court, Western District of Michigan Case No. 5:00-CV-131.

Plaintiff insured filed a declaratory action to determine coverage under a public officials liability policy. The dispute was whether Defendant insurer was required to provide defense and coverage for claims made by an asbestos contractor. The Plaintiff awarded an asbestos bid to a contractor who then claimed that the provided information failed to indicate the true scope of the project and it removed excess asbestos without proper compensation. Defendant provided a defense and settled part of the claims, but issued a reservation of rights to assert specific indemnity defenses.

The insurer argued that the pollution exclusion applies because the underlying litigation involves liability for removal and disposal of asbestos. Plaintiff argued that its alleged failure to disclose information is the basis for the claim. The court granted Plaintiff’s motion for summary disposition on the basis that asbestos was too distant for the claim to have “arisen out of” asbestos. The immediate cause of the claim was the alleged misrepresentations.

[su_box title=”Kallas & Henk Note”] The Court looked to the immediate cause of the claims against the insured to determine the duty to defend. [/su_box]

 

Auto-Owners Insurance Company v Ryder Truck Rental

Unpublished. February 8, 2002. State of Michigan Court of Appeals Docket No. 222114.

Plaintiff filed a declaratory action to determine which insurer is primarily responsible for damages from an accident involving a leased vehicle. Plaintiff’s insured leased a van, but elected to provide its own liability insurance. The leasing company’s policy provided no coverage for the lessee unless the lease agreement included such coverage. The Trial Court granted the leasing company’s insurer’s motion for summary disposition holding that the lease agreement excluded the lessee from coverage on a primary basis and that the certificate of insurance included coverage to the leasing company’s insurer as an additional insured.

On appeal, Plaintiff argued that the lease agreement could not shift liability under Michigan no-fault. The Court of Appeals agreed that shifting liability was impermissible. The Plaintiff further argued that the certificate of insurance did not qualify leasing company’s insurer as an additional insured because the issuing party was not be agent of the insurer.

The Court of Appeals agreed stating that the insurer could not be bound by the actions of he insured’s agent. The Trial Court was reversed and it was determined that the lessee’s insurer was entitled to summary disposition and the leasing company’s insurer was primarily responsible.

[su_box title=”Kallas & Henk Note”] The Court of Appeals found that the insurer of the owner of the vehicle is primarily responsible for the accident damages and that a contract cannot remove the owner’s responsibility. [/su_box]

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