If this opinion indicates that it is “FOR PUBLICATION,” it is subject to 

revision until final publication in the Michigan Appeals Reports.

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S T A T E O F M I C H I G A N

C O U R T O F A P P E A L S

MEEMIC INSURANCE COMPANY,

Plaintiff-Appellee,

UNPUBLISHED

May 21, 2020

v No. 346361

Wayne Circuit Court

ANGELA JONES, LC No. 18-005480-CK

Defendant-Appellant.

Before: MURRAY, C.J., and SWARTZLE and CAMERON, JJ.

PER CURIAM.

Defendant, Angela Jones, appeals the trial court’s order denying her motion for summary 

disposition and granting plaintiff Meemic Insurance Company’s countermotion for summary 

disposition. We reverse and remand for proceedings consistent with this opinion.

1

I. FACTS

Jones owned residential property in Detroit, Michigan. In June 2014, Jones applied to 

purchase a home owner’s insurance policy from Meemic. On the insurance application, Jones 

represented that she resided at the property even though she did not reside there at that time. Based 

on the information contained in the application, Meemic issued Jones an insurance policy. The

 

1 We disagree with Meemic’s argument that we lack jurisdiction over this appeal. Jones’s motion 

for reconsideration from the trial court’s final order was filed in the trial court within the 21-day 

period prescribed in MCR 7.204(A)(1)(b), and the instant claim of appeal was filed within 21 days 

after the trial court denied Jones’s motion for reconsideration. Contrary to Meemic’s argument on 

appeal, Jones was not required to identify the order denying reconsideration in the claim of appeal 

in order for MCR 7.204(A)(1)(b) to apply.
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insurance policy provided, in relevant part, the following:

If we pay the mortgagee for any loss and deny payment to you2:

A. we will be subrogated to the extent of our payment to all the rights that the 

mortgagee has under the mortgage on the property; or

B. at our option, we may pay to the mortgagee the whole principal on the mortgage 

and any interest due. In this event, we may receive a full assignment and transfer 

of the mortgage and all securities held as collateral for the mortgage debt.

The insurance policy was effective from July 28, 2014 through July 28, 2015, and the 

parties later renewed the insurance policy for an additional year. 

On September 28, 2015, the property was damaged by a fire. At the time of the fire, Jones 

resided in the home. On September 28, 2015, Meemic paid Jones an advance payment of $2,500 

in partial payment of the claim for insurance benefits. The advance payment receipt and 

reservation of rights document, which was signed by Jones, stated, “I further understand that if the 

policy or the claim is not valid and additional payment is not required by [Meemic], I will repay 

this partial payment to [Meemic].” During Meemic’s investigation following the fire, it discovered 

that Jones had misrepresented that she was living at the property at the time she submitted the 

insurance application. On February 19, 2016, Meemic sent a letter to Jones, rescinding and voiding 

the insurance policy from its inception on the basis of the material misrepresentation. After 

rescinding the policy Meemic paid $53,356.49 to Jones’s mortgagee, CitiMortgage, Inc., under the 

policy’s standard mortgage clause.

On March 4, 2016, Jones filed suit against Meemic, alleging breach of contract and seeking 

to recover under the insurance policy. Meemic answered the complaint and later moved for 

summary disposition, arguing that the insurance policy was appropriately rescinded on the basis 

of the misrepresentation made by Jones in the application. Jones opposed the motion. On 

December 28, 2016, the trial court entered an order denying Meemic’s motion for summary 

disposition “because there was no fraud because [Jones] renewed the policy and the answers were 

correct at the time of the renewal and [Jones] was a resident [of the home] at the time of the fire.” 

Meemic filed an application for leave to appeal the trial court’s decision concerning its 

motion for summary disposition. On April 19, 2017, this Court reversed the trial court’s December 

28, 2016 order denying Meemic’s motion for summary disposition and remanded the matter to the 

trial court. See Jones v Meemic Ins Co, unpublished order of the Court of Appeals, entered April 

19, 2017 (Docket No. 337041). Jones filed an application for leave to appeal with our Supreme 

Court, which was denied. Jones v Meemic Ins Co, 501 Mich 951; 904 NW2d 852 (2018). On 

remand, the trial court entered an order (1) reversing its December 28, 2016 order denying 

 

2 The policy defines “you” to include “the person or persons shown as Named Insured . . . .” 

Jones was the named insured. “We” and “our” are both defined as “the Company named in the 

Declarations.” Meemic was named in the declarations.
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Meemic’s motion for summary disposition, (2) granting Meemic’s motion for summary 

disposition, and (3) dismissing Jones’s complaint with prejudice. 

On May 15, 2018, Meemic filed suit against Jones, seeking recovery of the $2,500 advance 

payment and the $53,356.49 paid to CitiMortgage. Under Count I, Meemic alleged that it was 

entitled to recovery of the $2,500 because the insurance policy was void ab initio. Under Count 

II, Meemic alleged that it was entitled to subrogation for the $53,356.49 paid to CitiMortgage 

because it properly denied coverage to Jones and rescinded the policy on the basis of the 

misrepresentations made in the application. Jones answered the complaint and generally denied

the allegations contained therein.

On June 22, 2018, Jones filed a motion for summary disposition under MCR 2.116(C)(8) 

and (C)(10), arguing that the standard mortgage clause was negated by the rescission of the 

insurance policy and that the trial court should dismiss the claim for the repayment of the $2,500 

for lack of the circuit court jurisdictional threshold. Meemic filed a response to Jones’s motion 

for summary disposition and filed a countermotion for summary disposition, arguing that it was 

entitled to the return of the $2,500 advance payment because it was unaware of Jones’s 

misrepresentation at the time it made the payment and that Jones owed Meemic $53,356.49 

because the standard mortgage clause created a separate contract that required Meemic to pay 

CitiMortgage. 

On October 5, 2018, the trial court issued an opinion and entered an order, granting 

summary disposition in favor of Meemic. Jones’s motion for summary disposition was denied. 

Jones filed a motion for reconsideration from the trial court’s decision, which also was denied. 

This appeal followed.3

II. STANDARD OF REVIEW

We review de novo a trial court’s decision regarding a motion for summary disposition. 

Smith v Globe Life Ins Co, 460 Mich 446, 454; 597 NW2d 28 (1999). Although the trial court did 

not identify the subrule under which it granted summary disposition, it is apparent that the motion 

was granted under MCR 2.116(C)(10) because the trial court’s consideration went beyond the 

parties’ pleadings. Kosmalski ex rel Kosmalski v St John’s Lutheran Church, 261 Mich App 56, 

59; 680 NW2d 50 (2004). In reviewing a motion for summary disposition brought under MCR 

2.116(C)(10), this Court considers “affidavits, pleadings, depositions, admissions, and 

documentary evidence filed in the action or submitted by the parties, in the light most favorable to 

the party opposing the motion.” Smith, 460 Mich at 454 (citation omitted). “A trial court may 

grant a motion for summary disposition under MCR 2.116(C)(10) if the affidavits or other 

documentary evidence show that there is no genuine issue in respect to any material fact, and the 

moving party is entitled to judgment as a matter of law.” Id. at 454-455.

This Court also reviews de novo questions of the proper interpretation of a contract. Rory 

v Continental Ins Co, 473 Mich 457, 464; 703 NW2d 23 (2005). This Court reviews the 

 

3

Jones does not challenge the trial court’s holding that Meemic was entitled to summary 

disposition on its claim that it was entitled to recovery of the $2,500 that it paid to Jones.
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interpretation of an insurance contract just like any other contract. McGrath v Allstate Ins Co, 290 

Mich App 434, 439; 802 NW2d 619 (2010).

III. ANALYSIS

Jones argues that the trial court erred by granting summary disposition in favor of Meemic 

on its claim that it was entitled to reimbursement of the $53,536.49 that it paid to CitiMortgage. 

We agree. 

There are two types of mortgage clauses in insurance policies that protect lienholders—

ordinary and standard mortgage clauses. Foremost Ins Co v Allstate Ins Co, 439 Mich 378, 383-

384; 486 NW2d 600 (1992). Under a standard mortgage clause,

a lienholder is not subject to the exclusions available to the insurer against the 

insured because an independent or separate contract of insurance exists between the 

lienholder and the insurer. In other words, there are two contracts of insurance 

within the policy—one with the lienholder and the insurer and the other with the 

insured and the insurer. [Id. at 384 (citations omitted).] 

Thus, a standard mortgage clause “effects a new and independent insurance which protects 

the mortgagee as stipulated, and which cannot be destroyed or impaired by the mortgagor’s acts 

or by those of any person other than the mortgagee or someone authorized to act for him and in 

his behalf.” Id. at 389-390 (quotation marks and citation omitted). Consequently, when an 

insurance policy contains a standard mortgage clause, misrepresentations in a mortgagor’s 

application for insurance do not necessarily void the contract between the insurer and mortgagee 

even when the misrepresentations render the policy void ab initio as to the mortgagor. See e.g.,

Wells Fargo Bank, NA v Null, 304 Mich App 508, 529-530; 847 NW2d 657 (2014). See also 

Couch, Insurance, 3d § 65:65 (recognizing that a standard mortgage clause “makes a new contract 

between the insurer and mortgagee, which is unaffected by the misrepresentations or false 

statements of the mortgagor . . ., of which the mortgagee is ignorant, whereby the insurance never 

became valid as to the mortgagor”).

With respect to whether the insurance policy at issue in this case contained a standard 

mortgage clause, the language of insurance contracts should be read as a whole and must be 

construed to give effect to every word, clause, and phrase. Klapp v United Ins Group Agency, Inc, 

468 Mich 459, 468; 663 NW2d 447 (2003). When the policy language is clear, a court must 

enforce the specific language of the contract. Hensier v Frankenmuth Mut Ins Co, 449 Mich 155, 

160; 534 NW2d 502 (1995). Standard mortgage clauses “are generally identifiable within an 

insurance policy on the basis of their language.” Wells Fargo Bank, 304 Mich App at 524. A 

standard mortgage clause contains

language that serves to afford coverage to the mortgagee even where it is not 

afforded to the insured. The result of such language is that “the lienholder’s interest 

in the insured’s property will not be avoided by any acts, representations, or 

omissions of the insured.” A standard loss payable clause thus may contain 

language indicating, for example, that the mortgagee will be covered 
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notwithstanding “any act or neglect by the insured” that may result in the denial of 

coverage to the insured. [Id. at 524-525 (citations omitted).]

In relevant part, the insurance policy at issue in this case contains the following clause:

Rights and Duties of Mortgagee. The term “mortgagee” includes a trustee 

or a land contract holder, if applicable.

If a mortgagee is named in the Declarations, any payment for loss under 

Coverage A or B will be made to the mortgagee and you, as interests appear . . . .

4

 

The interest of the mortgagee under this policy will not be affected by any 

action or neglect by you. The interest of the mortgagee under this policy will 

terminate unless it notifies us of any change of ownership, occupancy or substantial 

change in risk of which the mortgagee has knowledge and pays upon demand any 

premium due if you fail to do so. 

Thus, the plain language of the policy provides that “any action or neglect” by Jones (the 

named insured) would not prohibit recovery by CitiMortgage (the mortgagee). We conclude that 

this is a standard mortgage clause that created a separate, independent contract between Meemic 

and CitiMortgage. Consequently, Meemic’s rescission of Jones’s policy based on the acts of Jones 

at the time she procured the policy did not affect Meemic’s independent contract with 

CitiMorgage. 

With respect to whether Meemic has subrogation rights even though the insurance policy 

between Meemic and Jones was rescinded, the insurance policy included conditions regarding the 

rights and duties of Meemic:

If we pay the mortgagee for any loss and deny payment to you:

A. we will be subrogated to the extent of our payment to all the rights that 

the mortgagee has under the mortgage on the property; or

B. at our option, we may pay to the mortgagee the whole principal on the 

mortgage and any interest due. In this event, we may receive a full assignment and 

transfer of the mortgage and all securities held as collateral for the mortgage debt. 

Thus, in relevant part, the plain language of the contract provides that, if Meemic paid 

CitiMortgage “for any loss” and denied payment to Jones, Meemic would have rights of 

subrogation. Jones argues that, because Meemic rescinded the policy—as opposed to simply 

denying her claim—Meemic is not entitled to subrogation.

Because the policy does not define the term “deny,” we must turn to dictionary definitions 

to decipher its meaning. See Citizens Ins Co v Pro-Seal Serv Group, Inc, 477 Mich 75, 84; 730 

 

4 CitiMortgage was listed as the mortgagee on the policy declaration.
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NW2d 682 (2007). Random House Webster’s College Dictionary (1997) defines “deny” as “to 

refuse to agree or accede to”; “to withhold something from, or refuse to grant a request.” In 

contrast, Random House Webster’s College Dictionary (1997) defines “rescind” as “to revoke, 

annul, or repeal.” Thus, the contract only granted Meemic the right of subrogation if it paid 

CitiMortgage and refused to pay Jones’s claim under the policy—as opposed to entirely annulling

Jones’s rights under the policy.

It is undisputed that Meemic paid $53,356.49 to CitiMortgage. However, Meemic decided 

to do more than refuse to pay Jones’s claim under the policy. Meemic voided the policy ab initio

due to Jones’s material misrepresentation.5 Thus, because the contract only contemplates rights 

of subrogation when a claim is denied, Jones is not contractually obligated to pay $53,356.49 to 

Meemic under the terms of the policy. Consequently, we conclude that the trial court erred by 

granting summary disposition in favor of Meemic as to the recoupment of the payment to 

CitiMortgage.

In so holding, we note that Meemic argues that Citizens State Bank of Clare v State Mut 

Rodded Fire Ins Co of Mich, 276 Mich 62; 267 NW 785 (1936), establishes that it is entitled to 

subrogation despite the fact that Meemic rescinded the insurance policy. We disagree. In Citizens 

State Bank, after property was destroyed by fire, the insurance company argued that the insurance 

policy was void ab initio because of material misrepresentations that were made by the mortgagor

in the insurance application. Id. at 65. After the mortgagee filed suit against the insurance 

company to enforce the standard mortgage clause contained in the policy, the trial court entered a

judgment in favor of the mortgagee but held that the insurance company was not entitled to 

subrogation from the mortgagor. Id. at 65, 69-70. The insurance company appealed. Id. at 65.

When considering whether the insurance company was entitled to subrogation, our 

Supreme Court analyzed the contract’s plain language. Id. at 70. In doing so, the Citizens State 

Bank Court noted that the insurance policy provided that, when the insurance company “shall pay 

the mortgage (or trustee) any sum for loss or damage under [the] policy” and the insurance 

company “shall claim that as to the mortgagor or owner, no liability therefor existed,” the insurance 

company would thereafter be “legally subrogated [to the extent of such payment] to all the rights 

of the party to whom such payments [were] made . . . .” Id. The Citizens State Bank Court agreed 

that the mortgagor’s misrepresentations concerning the total dollar amount of the encumbrances

on the property appeared to be material misrepresentations that would void the policy as to the 

mortgagor. Id. at 70-71. Nonetheless, because the record was incomplete and certain “facts” were 

not before the Court, our Supreme Court reversed the trial court’s judgment and granted a new 

trial. Id. at 71.

Thus, contrary to Meemic’s arguments, the Court in Citizens State Bank did not hold that 

an insurance company is entitled to subrogation even after it elects to rescind an insurance policy 

due to the insured’s misrepresentations at the time the policy is procured. Moreover, the Court in 

Citizens State Bank began its analysis by interpreting the plain language of the insurance policy, 

 

5 When a policy is void ab initio, it is as though the policy never existed. Epps v 4 Quarters 

Restoration, LLC, 498 Mich 518, 536-539; 872 NW2d 412 (2015) (observing that a contract that 

is void ab initio is a nullity at the outset).
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which provided that subrogation was permitted when the insurance company determined that “no 

liability therefor existed” “as to the mortgagor or owner[.]” Id. at 70. This language is different 

from the language of the insurance policy at issue in this case. As already discussed, the insurance 

policy in this case is narrower in that it permits subrogation only when the insurance company 

denies coverage. Consequently, we conclude that Meemic’s reliance on Citizens State Bank is 

misplaced.

Meemic also relies on Marketos v American Employers Ins Co, 240 Mich App 684; 612 

NW2d 848 (2000), rev’d in part on other grounds by 465 Mich 407 (2001). However, Meemic’s 

reliance on Marketos is misplaced because that case concerned whether an insurance company was 

entitled to a setoff of the proceeds that it paid to the insured’s mortgagee under a standard mortgage 

clause. Id. at 690-696.6

Finally, Jones argues in her reply brief that this Court should dismiss Meemic’s action 

because it was filed after the statute of limitations expired. However, “[r]eply briefs must be 

confined to rebuttal, and a party may not raise new or additional arguments in [her] reply brief.” 

Kinder Morgan Michigan, LLC v City of Jackson, 277 Mich App 159, 174; 744 NW2d 184 (2007). 

Because the statute of limitations argument was improperly raised for the first time in Jones’s reply 

brief, we decline to consider it. 

Reversed and remanded to the trial court for proceedings consistent with this opinion. We 

do not retain jurisdiction.

/s/ Christopher M. Murray 

/s/ Brock A. Swartzle

/s/ Thomas C. Cameron 

 

6 Meemic also relies on Nationwide Mut Fire Ins Co v McDermott, 603 Fed Appx 374 (CA 6, 

2015), to support that it is entitled to subrogation even though it rescinded the policy. However, 

Meemic’s reliance on McDermott is misplaced because, unlike in this case, the insurance company 

in McDermott did not void the policy ab initio; rather, the insurance company contended that the 

insured’s claim “was not covered under the policy” because the insured failed to comply with the 

terms of the policy after it was issued. Id. at 375-377. Meemic’s reliance on Wyckoff v Standard 

Fire Ins Co, 936 F2d 1474 (CA 6, 1991), is also misplaced because the policy language in that 

case is distinguishable from the policy language herein. Specifically, like the contractual language 

in Citizens State Bank, the contractual language in Wyckoff provided that the insurance company 

was entitled to subrogation if it paid “the mortgagee any sum for loss under th[e] policy” and 

“claim[ed] that, as to the mortgagor or owner, no liability therefor existed . . . .” Id. at 1491. As 

already stated, the policy language at issue in this case is narrower in that it only grants Meemic 

the right of subrogation if it denies a claim. Meemic also relies on numerous opinions from other 

jurisdictions to support that it is entitled to contractual subrogation in this case. However, those 

opinions are not binding on this Court. See Auto Owners Ins Co v Seils, 310 Mich App 132, 147; 

871 NW2d 530 (2015).