Michigan Coverage Decisions, Issue 43

Edward F. Huizinga et al v Russell M. Olivier et. al.

Unpublished. Decided November 1, 2002 State of Michigan Court of Appeals Docket No. 230981.

This is a coverage dispute over homeowner personal property endorsement terms issued by Defendant. Plaintiffs claimed that on endorsement extending additional liability coverage also created unlimited replacement coverage for personal property due to an ambiguity. The Trial Court granted summary disposition to the insureds.

The insurer argued on appeal that the endorsement did not provide unlimited replacement coverage. The Court of Appeals determined that the endorsement did not apply to personal property and reversed granting summary disposition in favor of the insurer.

[su_box title=”Kallas & Henk Note”] The Court used the “plain meaning” of policy terms to interpret the policy. This is consistent with other Michigan cases applying “plain meaning” in the absence of definitions contained in the policy. Auto Club Insurance Company v Richard Bearinger ( This case was summarized in our March 2003 issue as an unpublished opinion. On November 8, 2002 the decision was approved for publication).  [/su_box]

 

All Phase Electric Service Ltd. v Hamlin Softball, Inc.

Unpublished. Decided November 8, 2002 State of Michigan Court of Appeals Docket No. 233190.

The insured sought coverage for damage to an outdoor lighting system. Coverage was denied based on the definition of building, which did not include the lighting system. The lighting system was not attached to any building or separately listed, therefore, was not covered. The Trial Court granted summary disposition in favor of the insurer.

Plaintiff appealed using “plain meaning” definitions, the lighting system qualified as an “outdoor fixture”. The Court determined that the building definition included “fixtures, including outdoor fixtures”. Because the lighting system was not attached, it was not a “fixture”. The Court of Appeals affirmed summary disposition.

[su_box title=”Kallas & Henk Note”] In using Plaintiff’s own argument of applying “plain meaning” definitions, the Court found no ambiguity existed. [/su_box]

 

Hi-Tech Engineering, Inc. v Paul S. Buiten, Buiten-Tamblin-Steensma & Associates et. al.

Unpublished. Decided November 12, 2002 State of Michigan Court of Appeals Docket No. 228250.

Plaintiff sought defense and general liability coverage from Defendant insurer. Plaintiff also claimed misrepresentation by Defendant insurance agent. A companion case, McKusick v Travelers decided a pollution exclusion eliminated coverage. Because it had already been determined that the policy did not apply, the Trial Court held that there was no duty to defend. The Trial Court granted summary disposition to the agent on the basis that Insurance agents have no duty to provide coverage advice under Michigan law.

The Court of Appeals declined to address any issues, except the duty to defend and the duty of an insurance agent. Because no coverage existed, there was no duty to defend. No “special relationship” required the agent to provide coverage advice and the Court of Appeals affirmed summary disposition.

[su_box title=”Kallas & Henk Note”] The Court recognized the distinction between the duty to defend and the duty to indemnify. The Court further recognized that even though the duty to defend was broader, no potential coverage was available to require defense. A “special relationship” creates a higher standard of duty by the insurance agent. The Court examined factual evidence to determine no “special relationship” existed between the insured and agent.  [/su_box]

 

Allstate Insurance Company v Robert Daniel McCarn, et. al.

On Remand. Unpublished. Decided November 15, 2002 State of Michigan Court of Appeals Docket No. 213041.

Plaintiff insurer filed a declaratory action seeking application of a criminal or intentional acts exclusion. The 16- year-old insured pointed a shotgun, thought to be unloaded, pulled the trigger, the gun fired, and a third party was killed. The Trial Court found no intentional or criminal conduct under the exclusion.

Because the insured’s actions constituted manslaughter, the Court of Appeals concluded that the criminal acts exclusion eliminated coverage. The Court of Appeals remanded to the Trial Court for entry of judgment in favor of the insurer.

[su_box title=”Kallas & Henk Note”] A Supreme Court decision in this case was summarized in our December 2002 issue. The Supreme Court determined that the death was an accident, thus, an occurrence under the policy. The Supreme Court in that decision, declined to address the criminal acts exclusion and remanded to the Court of Appeals to determine if the criminal acts exclusion applied.  [/su_box]

 

Auto-Owners Insurance Company v Monique Aikens, et. al.

Unpublished. Decided November 15, 2002 State of Michigan Court of Appeals Docket No. 234086.

Plaintiff sought to rescind an auto policy or deny coverage because of an excluded driver exclusion. The driver testified that she had no permission to use the car. The Trial Court granted summary disposition in favor of the insurer based on the use by an excluded driver.

The policy contained a liability exclusion for any person using the vehicle without a reasonable belief that they were entitled. Defendant provided no evidence to dispute the driver’s testimony. The Court of Appeals affirmed summary disposition for the insurer but declined to express an opinion regarding rescission.

[su_box title=”Kallas & Henk Note”] The Court recognized the distinction between policy language and the terms of the owners liability statute. The insured attempted to raise the owners liability statute as a basis for creating a question of fact. The insured did not raise a genuine issue of material fact to prevent the Court from granting summary disposition relating to the policy language.  [/su_box]

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