Michigan Coverage Decisions, Issue 192
Secura Insurance v. Joy B. Thomas et. al.
Unpublished. Decided December 1, 2015, Michigan Court of Appeals Docket No. 322240
The insurer filed a declaratory action to rescind coverage on a non-owned vehicle which had been endorsed onto the policy. The vehicle was involved in two accidents resulting in claims for PIP and underinsured motorist benefits. Based on fraud, the trial court allowed rescission of the policy. The trial court also entered judgment in favor of the carrier for restitution damages associated with payments made relating to the fraudulent claims.
On appeal, the Court rejected the policyholder’s arguments that the carrier was prohibited from rescinding due to statutory minimum liability requirements and that the carrier had failed to give proper cancellation notice. The Court of Appeals did vacate the damages award, with the exception of the payment for first-party benefits and remanded for a clarification on the award for attorney fees.[su_box title=”Kallas & Henk Note”] The Court followed the recent Titan v. Hyten decision and its reasoning in reaching its conclusion regarding the availability of rescission. [/su_box]
John D. McAuliffe et. al. v. Auto-Owners Ins. Co. et. al.
Unpublished. Decided December 10, 2015, Michigan Court of Appeals Docket No. 323349
The insured was involved in a motor vehicle accident, incurring injuries, and subsequently settled with the other party responsible for the accident. The insurance carrier denied the claim on the basis that the insured failed to comply with the requirement to obtain prior written consent to settle. The trial court ruled the factual questions existed preventing summary disposition in favor of the insurer.
The Court of Appeals reversed and remanded for entry of summary disposition in favor of the insurer on the basis that the insured had failed to comply with the written consent to settle provision. The Court rejected the argument that the insurer was equitably estopped from enforcing the policy provision by its silence. The Court noted that there was no basis to invoke equitable estoppel which was supported by any evidence provided to the Court.[su_box title=”Kallas & Henk Note”] The Court followed the long-standing principles of contract interpretation in enforcing the unambiguous provision and that equitable estoppel cannot expand the terms of the contract without justifiable reliance and prejudice. [/su_box]
Billy Rayfield v. Edwin Jared Stewart and American Reliable Ins. Co.
Unpublished. Decided December 15, 2015, Michigan Court of Appeals Docket No. 322764
The Plaintiff was involved in an accident with the individual defendant and brought a claim for uninsured motorist benefits. The parties filed summary disposition motions on the basis that the Plaintiff did not have insurance at the time of the accident because he had failed to pay his renewal premium, therefore, was not entitled to seek recovery for his injuries. The trial court granted summary disposition in favor of the insurance carrier.
The Court of Appeals affirmed summary disposition in favor of the insurer on the basis the Plaintiff failed to present any evidence that he had paid the renewal premium. The Court also rejected the Plaintiff’s equitable estoppel argument for lack of any evidence to support this theory and the Plaintiff was not entitled to rely on the mailbox rule given that the payment was not properly addressed and no proof of mailing existed.[su_box title=”Kallas & Henk Note”] While the Court discusses the application of equitable estoppel in a non-payment situation, the Court specifically noted that there was no evidence of detrimental reliance by Plaintiff to use equitable estoppel to require coverage. [/su_box]
Robert and Susan Thill v. State Farm Fire & Casualty Ins. Co.
Unpublished. Decided December 15, 2015, Michigan Court of Appeals Docket No. 323339
This case arises out of an “ice dam” damage claim on Plaintiffs’ home. A claim professional for the Defendant insurer determined the damage to the wood siding was due to rot and deterioration, which is excluded from coverage. Plaintiffs then decided to not pursue the claim and the carrier sent confirmation of this decision in writing. Plaintiffs reasserted the claim one year later. The carrier denied the claim based on the original and additional rot and deterioration. The trial court dismissed Plaintiffs’ claims based on the statute of limitations contained in the insurance contract.
The Court of Appeals upheld the dismissal of Plaintiffs’ claims based on its review of the insurance code’s statute of limitations provisions rather than the policy provision addressing the time limitation on filing a claim.[su_box title=”Kallas & Henk Note”] Implicitly, the Court engrafted the statutorily provided statute of limitations into the insurance contract by assessing the issue solely based on the mandatory statutory provisions. [/su_box]