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### STATE OF MICHIGAN

COURT OF APPEALS

JUDITH SARKOZY, doing business as SARKOZY BAKERY,

Plaintiff-Appellant, UNPUBLISHED August 30, 2016

v No. 326454 Kalamazoo Circuit Court HANOVER INSURANCE COMPANY, CITIZENS INSURANCE COMPANY OF AMERICA, and HUB INTERNATIONAL MIDWEST LIMITED, LC No. 2013-000156-NZ

Defendants-Appellees.

Before: O WENS , P.J., and S AWYER and S HAPIRO , JJ.

P ER C URIAM

. Plaintiff appeals as of right t he trial court order granting s ummary disposition in favor of defendants Hanover Insurance Company (“Hanover”), Citizens Insu rance Company of America (“Citizens”), and HUB Internationa l Midwest Limited (“HUB”), on her claims arising out of a fire that consumed Sarkozy Bak ery (“the bakery”). We affirm.

The bakery and its contents were destroyed by fire in 2012. P laintiff received insurance proceeds from Hanover for the full policy limits on the buildin g and its contents. Those proceeds were insufficient to fully replace the building and it s contents. In this lawsuit, plaintiff argues that the bakery and its contents were underinsured due t o the tortious acts of her independent insurance agent (HUB and its predecessors) and her insurers (Hanover/Citizens). Plaintiff seeks relief under several theories: (1) negligence; (2) silent fraud; (3) breach of fiduciary duty; (4) tortious interference with business relatio nship or expectancy; and (5) breach of duty to defend or indemnify.

This Court reviews de novo a tr ial court’s grant of summary d isposition under MCR 2.116(C)(10). Ernsting v Ave Maria College , 274 Mich App 506, 509; 736 NW2d 574 (2007). “When deciding a motion for summary disposition under MCR 2.116 (C)(10), a court must consider the pleadings, affidavits, depositions, admissions, an d other documentary evidence submitted in the light most favorable to the nonmoving party.” Id . at 509-510. “Summary disposition is proper under MCR 2.116(C)(10) if the documentary evidence shows that there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law.” Id . at 509. “A genuine issue of material fact exists when the re cord, giving the-2- benefit of any reasonable doubt to the opposing party, leaves o pen an issue upon which reasonable minds could differ.” Id . at 510. “Questions involving the proper interpretation of a contract or the legal effect of a contractual clause are also r eviewed de novo.” McDonald v Farm Bureau Ins Co , 480 Mich 191, 197; 747 NW2d 811 (2008).

To prevail in a negligence ac tion, “a plaintiff must prove fou r elements: (1) a duty owed by the defendant to the plaintiff, (2) a breach of that duty, ( 3) causation, and (4) damages.” Case v Consumers Power Co , 463 Mich 1, 6; 615 NW2d 17 (2000 ). “If a trial court determi nes that, as a matter of law, the defendant owed no duty to the plaintiff , summary disposition is properly granted in the defendant’s favor . . . .” Dykema v Gus Macker Enterprises, Inc , 196 Mich App 6, 9; 492 NW2d 472 (1992). “Whether a duty exists is a question o f law that is solely for the court to decide.” Harts v Farmers Ins Exch , 461 Mich 1, 5; 597 NW2d 47 (1999). Questions of law are reviewed de novo. Fultz v Union-Commerce Assoc , 470 Mich 460, 463; 683 NW2d 587 (2004).

Plaintiff argues that defendants expressly agreed to assume th e duty of advising plaintiff of the adequacy of her policy limits and, therefore, defendants owed her a duty under the special relationship test in Harts , 461 Mich at 5. Plaintiff misreads the law. Harts applies to exclusive insurance agents, not independent agents (such as HUB) or insur ers (such as Hanover/Citizens). Id . at 7-10.

“[T]he relationship between the insurer and the insured is a c ontractual one.” Id . at 7. Plaintiff has failed to identify any language in her insurance policy to suggest that Hanover/Citizens had a duty to advise her of the adequacy of he r policy limits. Indeed, the policy actually disclaims such a duty, providing that “[w]e [th e insurer] are not obligated to make any inspections, surveys, reports or recommendations and any su ch actions we do undertake relate only to insurability and the premiums to be charged.” P laintiff’s insurance policy clearly stated the policy limits for each type of coverage she purchase d, and provided that “[t]he most we will pay for loss or damage in any one occurrence is the app licable Limit of Insurance shown[.]” Plaintiff was obligated to read the policy and raise any questions she had about the adequacy of her policy limits within a reasonable time. Zaremba Equip, Inc v Harco Nat’l Ins Co , 280 Mich App 16, 29; 761 NW2d 151 (2008). Plaintiff testifie d that she always read her insurance policies, but there is no evidence that she ever cont acted Hanover/Citizens with questions regarding the adequacy of the policy limits contained therein. Because an insurer’s duties to an insured arise from the policy, plaintiff cannot es tablish that Hanover/Citizens owed her a duty in negligence with respect to this claim and, accord ingly, the trial court properly granted summary disposition in their favor. Dykema , 196 Mich App at 9.

Turning to plaintiff’s claim against HUB, it is undisputed tha t Terry Stewart (plaintiff’s original insurance agent), and his successors, i.e., HUB, were and are independent insurance agents. An “independent insurance agent or broker is considere d an agent of the insured rather than an agent of the insurer.” Genesee Foods Servs, Inc v Meadowbrook, Inc , 279 Mich App 649, 654; 760 NW2d 259 (2008) (quotation marks and citation omi tted). An independent insurance agent owes a duty of loyalty and good faith. See Burton v Burton , 332 Mich 326, 337; 51 NW2d 297 (1952).-3- [B]ecause defendants were independent insurance agents when the y assisted plaintiffs, their primary fiduc iary duty of loyalty rested with plaintiffs, who could depend on this duty of loyalty to ensure that defendants were acting in their best interests, both in terms of finding an insurer that co uld provide them with the most comprehensive coverage and in en suring that the in surance contract properly addressed their needs . [ Genesee Foods Servs, Inc , 279 Mich App at 656 (emphasis added).]

Thus, contrary to the trial c ourt’s ruling, HUB, as plaintiff’ s independent insurance agent, owed her a duty in negligence—that of loyalty and good faith. However, this error does not require reversal because plaintiff has presented no evidence th at HUB breached its duty with regard to advising her of the adequacy of her policy limits. Taylor v Laban , 241 Mich App 449, 458; 616 NW2d 229 (2000) (“[W]e will not reverse the trial court’s order when the right result was reached for the wrong reason.”).

This Court has held that “[g]en erally, an insurance agent does not have an affirmative duty to advise a client regarding the adequacy of a policy’s co verage. Instead, the insured is obligated to read the policy a nd raise questions concerning cov erage within a reasonable time after issuance.” Mate v Wolverine Ins Co , 233 Mich App 14, 22-23; 592 NW2d 379 (1998) (citation and internal quotation marks omitted). Plaintiff tes tified that she read her policy every year, but there is no evidence that she ever raised concerns ab out the adequacy of her policy limits. There is no testimony that plaintiff ever requested th at Stewart or HUB obtain RCV coverage or ensure that the limits of her policy were sufficien t to replace the bakery and its
contents. 1 Plaintiff repeatedly assented to the renewal of the policy wi th limits based on an ACV calculation. Accordingly, although HUB owed plaintiff a duty o f loyalty and good f aith, plaintiff has presented no evidence that w ould allow reasonable minds to differ as to whether HUB (or its predecessors) breached that duty. Ernsting , 274 Mich App at 510. Acc ordingly, the trial court properly granted summary disposition in favor of HUB on plainti ff’s negligence claim related to the adequacy of her policy limits. Taylor , 241 Mich App at 458.

Plaintiff also argues that Ha nover/Citizens breached the stand ard duty of care in ordinary negligence by mislabeling plaintiff’s policy on the declaration s page as “replacement cost.” Even if this act breached a duty owed, plaintiff’s claim fails because there is no evidence that it caused her claimed damages. Case , 463 Mich at 6. Plaintiff’s insu rance policy plainly provided that any loss would be paid consistent with the policy limits, not any classification listed on the

1 The trial court properly refused to consider plaintiff’s late- filed affidavits. At her deposition, plaintiff testified unequivocally and repeatedly that she could not recall any conversation with Stewart, or any employee of HUB or Hanover/Citizens, concerning the adequacy of her policy limits or whether those policy limits were sufficient to fully replace the bakery and its contents. Plaintiff later filed affidavits wherein she averred that she r emembered that Stewart made various specific representations to her and that she specifically reque sted RCV coverage. However, “a witness is bound by his or her deposition testimony, and that t estimony cannot be contradicted by affidavit in an attempt to defeat a motion for summary disposit ion.” Casey v Auto Owners Ins Co , 273 Mich App 388, 396; 729 NW2d 277 (2006).-4- declarations page. Moreover, it is undisputed that plaintiff p aid premiums based on those policy limits. “[P]erhaps the most fundamental rule of Michigan insur ance jurisprudence is that an insurer can never be held liable for a risk . . . for which it did not charge or receive any premium.” Dunn v Detroit Auto Inter-Ins Exch , 254 Mich App 256, 270; 657 NW2d 153 (2002) (quotation marks and citation omitted). Thus, the trial court did not err in granting summary disposition in favor of Hanover/ Citizens on plaintiff’s claim o f ordinary negligence.

Plaintiff next argues that the t rial court erred in granting s ummary disposition in favor of Hanover/Citizens on her claim of silent fraud. In 1997, a Hano ver/Citizens employee performed an internal “Marshall Swift” v aluation of the bakery building. The calculated “actual cash value” (“ACV”) calculated was si gnificantly higher than the pol icy limit on the building in effect at the time. Plaintiff argues that Hanover/Citizens committed silent fraud by failing to disclose to her this valuation.

“[I]n order to prove a claim of silent fraud, a plaintiff mustshow that some type of representation that was false or misleading was made and that t here was a legal or equitable duty of disclosure.” M&D, Inc v WB McConkey , 231 Mich App 22, 32; 585 NW2d 33 (1998). “We emphasize that there must be some type of misrepresentation, wh ether by words or action, in order to establish a claim of silent fraud.” Id . at 36. That is, “mere nondisclosure is insufficient. There must be circumstances that establish a legal duty to make a disclosure.” Hord v Environmental Research Institute of Mich , 463 Mich 399, 412; 617 NW2d 543 (2000).

Hanover/Citizens was under no du ty to advise plaintiff regardi ng the adequacy of her coverage or policy limits. An in surer’s duty to an insured is governed by the insurance policy. Harts , 461 Mich at 7. Plain tiff has pointed to no provision in her insurance policy to suggest that Hanover/Citizens had a duty to dis close its internal valuations of her property. Moreover, as the Supreme Court stated, “a legal duty will arise most commonly in a [silent fraud] situation where inquiries are made by the plaintiff, to which the defendant mak es incomplete replies that are truthful in themselves but omit material information.” Hord , 463 Mich at 412. There is no evidence that plaintiff ever cont acted Hanover/Citizens regardi ng the adequacy of her coverage or whether her policy limits were sufficient to replace the bak ery and its contents. There being no inquiry, Hanover/Citizens cannot be charged with omitting ma terial information in a reply. See Burger v Allstate Ins Co , 667 F Supp 2d 738, 743 (ED Mich, 2009) (insurer has no duty t o disclose where the insured does not question the benefits being offered). 2 Moreover, plaintiff has failed to establish that Hanover/Citizens made a misrepresentat ion. There is no language in the insurance policy suggesting that plaintiff’s policy limit was c onsistent with a Marshall Swift ACV or RCV valuation. Thus, Hanover/Citizens was not required to “correct” the alleged misrepresentation made by the policy limit.

Plaintiff argues that the trial court erred in granting summar y disposition in favor of HUB on the claim for breach of fiduc iary duty. According to plainti ff, HUB breached its fiduciary duty when, in 2007, it and Hanover/Citizens executed the “Servi ce Center Contract,” which

2 Lower federal court decisions a re not binding on this Court, b ut may be persuasive. Donkers v Kovach , 277 Mich App 366, 372 n 3; 745 NW2d 154 (2007).-5- allowed HUB clients who were insured by Hanover/Citizens to dir ectly contact a customer service center maintained by Ha nover/Citizens with policy quest ions and changes. “Whether to recognize a cause of action for br each of fiduciary duty is a question of law reviewed de novo, because the existence of a duty is generally a question of law. ” Calhoun Co v Blue Cross Blue Shield of Mich , 297 Mich App 1, 20; 824 NW2d 202 (2012) (citation omitted).

HUB owed plaintiff a fiducia ry duty of loyalty and good faith. Burton , 332 Mich at 337; Genesee Foods Servs, Inc , 279 Mich App at 656. Plaintiff argues that HUB breached the following fiduciary duties by ente ring into the S ervice Center Contract: (1) duty to disclose all material facts; (2) duty of fidelity and loyalty; and (3) duty of good faith and fair dealing. See Stephenson v Golden , 279 Mich 710, 735-738; 276 NW 849 (1937). Plaintiff presente d no evidence to suggest that breaches of any of these duties occurr ed. As to the first, there was evidence that HUB informed plaintiff of the availability of the Center and its function; plaintiff does not dispute this evidence. As to the second, plaintiff re peatedly asserts that, by entering into the Service Center Contract, HUB somehow abdicated its fun ction as an independent insurance agent and made plaintiff a permanent customer of Hano ver/Citizens. There is simply no evidence to that effect. HUB remained at all times plaintif f’s independent insurance agent. Plaintiff was free to contact HUB at any time and, indeed, did so following the execution of the Service Center Contract. Plain tiff’s HUB agent testified that, if plaintiff wish ed for HUB to shop her insurance to carriers other than Hanover/Citizens, it would have done so. There is also no evidence to support plaintiff’s cl aimed violation of the duty o f good faith and fair dealing. The record indicates that plaintiff was apprised of everything rela ted to the Service Center Contract and that HUB was also available to answer any questions, which it did indeed do when plaintiff called. In one instance, plainti ff’s HUB agent contacted the C enter on plaintiff’s behalf and obtained a premium reduction. Acc ordingly, the trial court did not err in granting HUB’s motion for summary disposition on plaintiff’s claim of breach of fiduc iary duty. Calhoun Co , 291 Mich App at 20.

Plaintiff also claims that the trial court erred in granting s ummary disposition in favor of Hanover/Citizens on her claim for tortious interference with a business relationship. According to plaintiff, Hanover/Citizens in terfered with her relationship with HUB when it executed the Service Center Contract.

The elements of tortious interfe rence with a business relation ship are the existence of a valid business relationship or expectancy, knowl edge of the relationship or expectancy on the part of the defendant, an int entional interference by the defendant inducing or causing a breach or termination of the relationship or expectancy, and resultant damages to the plaintiff. To establi sh that a lawful act was done with malice and without j ustification, the plaintiff m ust demonstrate, with specificity, affirmative acts by the defendant that corrob orate the improper motive of the interference. Where the defendant’s actions were motivated by legitimate business reasons, its actions would not constitute i mproper motive or interference. [ Badiee v Brighton Area Sch , 265 Mich App 343, 365-366; 695 NW2d 521 (2005) (citations and emphasis omitted).]

There is no evidence that the Service Center Contract breached or terminated plaintiff’s business relationship with HUB. Plaintiff was free to contact HUB at any time after the-6- execution of the Service Center Contract to inquire about the a dequacy of her coverage, her policy limits, or any other matter regarding her policy. Indee d, it is undisputed that plaintiff did contact HUB regarding her policy. The evidence indicates that plaintiff was told that she could contact HUB or the Center, and there is no indication that plai ntiff was prevented from contacting HUB and seeking assistance. There was testimony tha t, had plaintiff requested, HUB would have shopped her policy to oth er insurance carriers. Pla intiff has presented no authority to suggest that an independent agent is required to unilaterally s hop an insured’s policy when the insured expresses satisfaction at renewing the policy. There i s no language in the Service Center Contract requiring HUB to keep plaintiff’s policy with Hanover/ Citizens or otherwise favor Hanover/Citizens over other insurance companies. In sum, it do es not appear that Hanover/Citizens’ allegedly wrongf ul actions significantly affe cted plaintiff’s relationship with HUB, much less breached or term inated it. Essentially, the Cen ter simply provided plaintiff with another customer service outlet. Accordingly, because plaintif f presented no evidence that the Service Center Contract breached or terminated her business rel ationship with HUB, the trial court did not err in granting summary disposition in favor of H anover/Citizens on plaintiff’s claim for tortious interferen ce with business relationship. Badiee , 265 Mich App at 365-366.

Lastly, plaintiff argues that Hanover breached its duties to d efend and indemnify her. Following the fire, plaintiff retained an attorney after she re ceived letters from bakery neighbors reserving the right to pursue li tigation if the demolition of t he bakery was not properly handled. Plaintiff now seeks reimburseme nt of the money spent on the dem olition and the attorney.

To prevail on an action for breach of contract, plaintiff mustshow “that (1) there was a contract (2) which the other party breached (3) thereby resulti ng in damages to the party claiming breach.” Miller-Davis Co v Ahrens Constr, Inc , 495 Mich 161, 178; 848 NW2d 95 (2014). “An insurance policy is much the same as any other con tract. The cardinal rule in the interpretation of contracts is to ascertain the intention of th e parties. To this rule all others are subordinate. . . . [ I]if the language of the contract is clea r and unambiguous, it is to be construed according to its plain sense and meaning . . . .” Grosse Pointe Park v Mich Muni Liability & Prop Pool , 473 Mich 188, 197-198; 702 NW2d 106 (2005).

The policy language at issue provides:

a. We will pay those sums that the insured become s legally obligated to
pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages . However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. We may, at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result

. [Emphasis added.]

The policy provides that the words in quotation marks have a “s pecial meaning” defined in the policy. Of relevance here is the definition of “suit”:

18. “Suit” means a civil proceeding in which damages because o f “bodily injury”, “property damage” or “pe rsonal and advertising injury” to which this insurance applies are a lleged. “Suit” includes:-7- a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or
b. Any other alternative dispute resolution proceeding in whic h such damages are claimed and to which t he insured submits with our c onsent.

Under none of the policy definitions was a “suit” brought agai nst plaintiff. There is no proof, or even allegation, that a civil lawsuit was filed or th at arbitration or other alternative dispute resolution proceeding wa s commenced. Plaintiff merely received letters that, at best, threatened possible future litigation. Under the plain and una mbiguous language of the policy, those letters were insufficient to trigger Hanover’s duty to de fend plaintiff. To the extent plaintiff argues that Hanover fa iled to properly respond to her attorney’s inquiry or investigate the matter, the policy unambiguously provides that Hanover may investigate at its discretion. There is no language qualifying this discretion. Simply put, u nder the policy language, plaintiff was required to wait for the filing of a “suit” before being en titled to defense from Hanover. Thus, the trial court did not err in granting summary dispositi on in favor of Hanover on plaintiff’s claim that it breached its duty to defend.

As to plaintiff’s claim for i ndemnification, the policy plainl y provides that Hanover will pay “those sums that the insured becomes legally obligated to pay as damages . . . .” (Emphasis added.) There is no allegation or indication that plaintiff be came “legally obligated” to pay any of the “damages” for which she now seeks indemnification. Had the bakery’s neighbors or another party filed a lawsuit or pursued other legal remedies, plaintiff might have become legally obligated to pay damages. However, there is no evidence that p laintiff incurred any such legal obligation. Moreover, it is undi sputed that plaintiff made the payments for which she now seeks indemnification at her own vo lition. The policy unambiguously provides that plaintiff shall make no such payments without Hanover’s consent, except at her own cost. Accordingly, the trial court did not err in granting summary disposition in favo r of Hanover on plaintiff’s breach of contract claim related to indemnification. 3

Affirmed.

/s/ Donald S. Owens /s/ David H. Sawyer /s/ Douglas B. Shapiro

3 We reject plaintiff’s argument that the trial court violated h er constitutional right to a jury trial by granting summary disposition i n favor of defendants. It is well-established that the court rules for granting summary disposition do not violate the constitutio nal right to a jury trial. See, e.g., People’s Wayne Co Bank v Wolverine Box Co , 250 Mich 273, 284-285; 230 NW 170 (1930); Moll v Abbott Laboratories , 444 Mich 1, 26-27; 506 NW2d 816 (1993).