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### STATE OF MICHIGAN

COURT OF APPEALS

SPECTRUM HEALTH HOSPITALS,
SPECTRUM HEALTH PRIMARY CARE PARTNERS, doing business as SPECTRUM HEALTH MEDICAL GROUP, and REED CITY HOSPITAL CORP., doing business as SPECTRUM HEALTH REED CITY CAMPUS,

Plaintiffs-Appellants, UNPUBLISHED February 23, 2017

v No. 330914
Kent Circuit CourtAUTO-OWNERS INSURANCE CO., HOMEOWNERS INSURANCE CO., MICHIGAN ASSIGNED CLAIMS PLAN, MICHIGAN AUTOMOBILE PLACEMENT FACILITY, and JOHN DOE INSURANCE CO., LC No. 14-011452-NF

Defendants-Appellees.

Before: B ORRELLO

, P.J., and M ARKEY and M. J. K ELLY , JJ.

P ER C URIAM

.

Plaintiffs, medical providers to Angela Grant who was injured in a March 2014 motor vehicle accident, appeal by right the trial court’s order grant ing defendants Auto-Owners Insurance Company and Home-Owner s Insurance Company (Auto-Owner s), 1 summary disposition of plaintiffs’ complaint for no-fault personal prot ection insurance (PIP) benefits under a policy Auto-Owners issued to Vera Herington, Grant’s mo ther-in-law. We affirm.

The material facts are undisputed. Vera Herington is the moth er of Arthur Grant, the registered owner of the 1994 Buick that Arthur’s wife, Angela G rant, was driving when she was involved in an accident resulting in her receiving significant injuries for which plaintiffs

1 The name of both Auto-Owners In surance Company and Home-Owners Insurance Company appear on the automobile insurance policy at issue; the parties refer to both collectively in the singular as Auto-Owners. It appears that both companies are pa rt of the Auto-Owners Insurance Group, although the exact relations hip of the companies is not clear from the record.-2- provided “reasonably necessary products, services and accommoda tions for an injured person’s care, recovery, or rehabilita tion.” MCL 500.3107(1)(a). At th e time of the accident in March 2014, Arthur and Angela had been married for over twenty years and resided together in Leroy, Michigan. In late 2013, Arthur and Angela experienced marital difficulties that resulted in Arthur temporarily living with his mother in her Bitely, Michig an home. Arthur and Angela resolved their marital difficulties, and Arthur returned to the marital home to reside with Angela in February 2014. While Arthur resided with Vera, the 1994 the Buick remained at the marital home, but Arthur took the keys with him.

Vera Herington has had an automobile insurance policy with Aut o-Owners for many years under which she insured several vehicles that she owned o r had interest in. During the period of time that Arthur resided with her when Arthur was hav ing marital difficulties with Angela, Herington went to her long-time insurance agent and add ed Arthur as a rated driver and
Arthur’s 1994 Buick as an insure d vehicle to her Auto-Owners po licy. The addition of the Buick to the policy occurred on January 4, 2014 with the policy term running through July 4, 2014. The policy change for the Buick i ncluded personal injury protec tion insurance coverage for “full medical and full wage” and Auto- Owners assessed a premium of $2 17.40 for this coverage.

At the time of the accident, neither Arthur nor Angela resided with Vera Herington at her home in Bitely, Michigan. Instead, Arthur and Angela lived tog ether in Leroy, Michigan. Further, neither Arthur nor Angela maintained insurance on Arthur’s 1994 Buick as required by MCL 500.3101(1), nor did they maint ain any other no-fault insur ance.

At some point, Angela Grant submitted a claim for no-fault ben efits to Auto-Owners under Vera Herington’s auto insurance policy. On April 22, 201 4, Auto-Owners’ representative denied Angela’s claim on the basis that its policy did not come within the statutor y priority list of insurers liable to pay no-fault benefits set forth in MCL 500.3 114.

In March, April, and May 2014, plaintiffs’ representatives sub mitted to Auto-Owners “UB-04 billing forms, Itemized Statements and medical records d ocumenting [their] claims” for no-fault benefits in connection with the “reasonably necessary” services provided to Angela
Grant because of for her acciden tal injuries. It is not clear if Auto-Owners ever formally responded to these claims, but they were not paid.

On August 14, 2014, plaintiffs submitted their claim for no-fa ult benefits regarding charges for treatment they provided Angela Grant related to the March 2014 accident to the Michigan Assigned Claims Plan (MACP). On September 15, 2014, the MACP denied plaintiffs’ claim because “[t]he owner, co-owner or constructive owner of a n uninsured vehicle or motorcycle involved in an accident is not entitled to PIP benef its.” See MCL 500.3113(b), and MCL 3101(2)(k)( i ).

On December 9, 2014, plaintiffs filed their complaint for no-fault benefits against AutoOwners, which included Count II, a claim for mandamus to requir e the MACP or the Michigan Automobile Insurance Placement Facility (MAIPF) to assign plain tiffs’ claim to a no-fault insurer and Count III, a claim for no-fault benefits from a “Jo hn Doe” insurer to be assigned by
the MACP. Counts II and III were later dismissed on motion for summary disposition with an-3- order entered July 31, 2015. The trial court reasoned with res pect to these clams that either
Auto-Owners was liable or else A ngela Grant was excluded from r ecovery. 2

On September 18, 2015, Auto-Owners moved for summary dispositi on on the grounds that it was not the priority i nsurer under MCL 500.3114 because neither Angela G rant nor Arthur Grant was a named insured under its policy with Herington and b ecause at the time of the accident neither Grant was a resident relative of Herington. F urthermore, Auto-Owners argued that Vera Herington was not an owner of the 1994 Buick, MCL 500 .3101(1)(k), but rather the Buick was registered to and owned by Arthur Grant.

Plaintiffs opposed the motion and invited the trial court “to exercise it discretion under MCR 2.116(I)(2) to reform the Auto-Owners policy to include Arthur Grant as a named insured, and, except as to the issue of da mages, grant summary dispositi on in Spectrum’s favor.”

On November 19, 2015, the trial court heard the parties’ argum ents. The trial court distinguished the primary case on which plaintiffs relied: Corwin v Auto Club Ins Ass’n , 296 Mich App 242; 819 NW2d 68 (2012). The trial court determined t hat while the situation in

Corwin had some similarities to the present case, there were also sig nificant differences. Specifically, trial court reasoned, the Corwin Court found that the defendants in that case set up a scheme that violated the public policy of the no-fault act. Furthermore, the plaintiff in Corwin
believed he had insurance on the vehicle involved in the accide nt. In the present case, the Grants were aware they had no insuran ce, and Auto-Owner s had done noth ing to violate the no-fault act. Also, the trial court reasoned that “reformation is a fairly ra dical step which Courts take reluctantly and only when certain circumstances are clearly est ablished and the need for it is obvious . . . .” Therefore, the trial court declined to reform the policy and granted Auto-Owners summary disposition. The trial c ourt denied reco nsideration an d plaintiffs appeal by right.

The trial court’s decision to grant summary disposition and th e many included questions of law such as the interpretati on of statutes and contracts are reviewed de novo. Burkhardt v Bailey , 260 Mich App 636, 646; 680 NW2d 453 (2004). Similarly, wheth er a person has an “insurable interest” to support an insurance contract, Morrison v Secura Ins Co , 286 Mich App 569, 572; 781 NW2d 151 (2009), and whether a given set of facts justify the granting of equitable relief, Johnson Family Ltd Partnership v White Pine Wireless, LLC , 281 Mich App 364, 371; 761 NW2d 353 (2008), are both que stion of laws review ed de novo.

A motion for summary disposition under MCR 2.116(C)(10) is rev iewed de novo, testing the factual sufficiency of a claim and must be supported by aff idavits, depositions, admissions, or other documentary evidence. Corley v Detroit Bd of Ed , 470 Mich 274, 278; 681 NW2d 342 (2004). The trial court in deciding the motion must view the s ubstantively admissible evidence submitted up to the time of the m otion in a light most favorabl e to the party oppos ing the motion.
Maiden v Rozwood , 461 Mich 109, 121; 597 NW2d 817 (1999). The motion should be granted if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter
of law. West v Gen Motors Corp , 469 Mich 177, 183; 665 NW2d 468 (2003). “A genuine issue

2 Plaintiffs have not appealed this ruling.-4- of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon whi ch reasonable minds might d iffer.” Id

.

We conclude that the trial court properly granted summary disp osition to Auto-Owners. Angela Grant is not entitled to no-fault benefits under Auto-Ow ners policy because she is not a named insured, and she is not arelative domiciled in the house hold of the named insured, Vera Herington. 500.3114(1). Angela Grantalso is not entitled to no-fault benefits under Herington’s insurance policy because Auto-Owners is not the insurer of eith er Arthur Grant, the owner of the vehicle, or Angela Grant its operator. MCL 500.3114(4). Furth er, Angela Grant was not entitled to no-fault benefits under MCL 500.3113(b) because she was also its “owner” under MCL 500.3101(2)(k)( i ) as “having the use” of the Buic k “for a period that is greate r than 30 days.”

Plaintiffs’ right to no-fault benefits from Auto-Owners depend s on whether Angela Grant has a right to no-fault benefits. See Chiropractors Rehab Grp, PC v State Farm Mut Auto Ins

Co , 313 Mich App 113, 126-130; 881 NW2d 120 (2015) (and cases it cites). On the facts of this case, the trial court properly denied plaintiff’s request for r eformation by correctly distinguishing the sole published case on which plaintiffs rely, Corwin , 296 Mich App 242, finding that the public policy concerns of that case were not present in the ins tant case and because the injured party in Corwin —the statutory owner of the leased vehicle required to maintain security— believed he had been paying for no-fault insurance. Auto-Owner s alternative argument to affirm the trial court because plaintiffs are not parties to the contr act between Auto-Owners and Herington and, therefore, lack standing to seek its reformation , also has merit. 3 So, the trial court properly denied reformation of H erington’s insurance policy. B ecause Angela Grant cannot claim no-fault benefits from Auto-Owners under MCL 500.3114, se e Belcher v Aetna Cas & Surety Co , 409 Mich 231, 251-252; 293 NW2d 594 (1980) (holding that § 31 14 is both a priority and an entitlement provision), an d plaintiffs’ rights to no-fau lt benefits depend on Angela Grant’s rights, see Chiropractors Rehab Grp , 313 Mich App at 126-130, plaintiffs cannot claim no-fault benefits under the Auto-Owners policy. Consequently, the trial court correctly granted Auto-Owners summary disposition.

Plaintiffs present no argument that they have a right to no-fa ult benefits from AutoOwners issued to Herington absent the policy being reformed to add Arthur Grant as a named insured. Plaintiffs’ argument relies almost entirely on Corwin , contending that case requires the reformation of every automobile insurance contract when the nam ed insured purchases PIP coverage with respect to a motor vehicle but lacks an insurable interest. Plaintiffs further suggest that MCL 500.3101(3), providing that “[a] policy of insurance r epresented or sold as providing

3 Contrary to plaintiffs’ argument , preservation requirements re garding a claim of error on appeal do not apply. Instead, without fi ling a cross-appeal, Auto-Own ers may “urge an alternative ground for affirmance, even if the alternative ground was consi dered and rejected by the lower
court or tribunal.” Boardman v Dep’t of State Police , 243 Mich App 351, 358; 622 NW2d 97 (2000), citing Middlebrooks v Wayne Co , 446 Mich 151, 166, n 41; 521 NW2d 774 (1994). Similarly, this Court “will not reverse when a trial court reac hes the right result for a wrong

reason.” Neville v Neville , 295 Mich App 460, 470; 812 NW2d 816 (2012).-5- security is considered to provide insurance for the payment of the benefits,” requires adding as a named insured a person that does ha ve an insurable interest in the vehicle.

“ ‘A court of equity has power to reform [a] contract to make it conform to the agreement actually made.’ ” Casey v Auto Owners Ins Co , 273 Mich App 388, 398; 729 NW2d 277 (2006) (citation omitted; alteration a dded). The theory of reformatio n is that where evidence clearly shows that both parties reached an agreement but because of mut ual mistake, or a mistake on the one side and fraud on the other, the contract does not express the parties’ true intent, a court of equity will reform the instrument so that it expresses the part ies’ actual intent. Ross v Damm

, 271 Mich 474, 480-481; 260 NW 750 (1935). Reformation will als o be supported “where one party to an instrument has made a mistake and the other party k nows it and conceals the truth
from him.” Retan v Clark , 220 Mich 493, 496; 190 NW 244 (1922). “A unilateral mistake is not sufficient to warrant reformation” and “[a] mistake in law—a mi stake by one side or the other regarding the legal effect of an agreement—is not a basis for r eformation.” Casey , 273 Mich App at 398; see also Olsen v Porter , 213 Mich App 25, 29; 539 NW2d 523 (1995) (“reformation will generally not be granted for a mistake of law”); Holda v Glick , 312 Mich 394, 405-406; 20 NW2d 248 (1945) (“Mistake as to the legal effect of a written i nstrument, deliberately executed and adopted, constitutes no ground for relief in equity.”). A court must proceed with the utmost caution when considering exercisi ng its authority to reform a w ritten instrument, Olsen , 213 Mich App at 28, and the burden is on the party seeking reformat ion “to establish by clear and convincing evidence” the grounds for granting relief. Holda , 312 Mich at 403-404. In this case, plaintiffs have neither alleged nor developed a factual record that supports granting the equitable
relief of contract reformation.

Furthermore, Auto-Owners alternative argument to affirm the tr ial court is meritorious. Plaintiffs were not parties to t he contract between Auto-Owners and Herington; consequently, they lack standing to seek its reformation. Additionally, neit her Arthur Grant nor Angela Grant is a party to the contract. Michigan caselaw supports that a n onparty to a contract cannot assert a right to reform the contract to which she is not a party. See Klym v Nida , 147 Mich App 709, 714; 383 NW2d 93 (1985) (denying accident victim’s request to r eform the liability limits of the insurance policy of negligent boat operator because “we can fin d no authority that would permit the plaintiff, who is a complete stranger to the contract, to s ue for reformation so that the contract would be more beneficial to himself”); Harwood v Auto-Owners Ins Co , 211 Mich App 249, 254; 535 NW2d 207 (1995) (denying reformation to add uninsured owner of the accident vehicle as a “named insured” to a policy owned by uninsured owner’s father because mutual mistake or fraud were not alleged and becau se uninsured owner was “not a p arty to the insurance contract”);

Mate v Wolverine Mut Ins Co , 233 Mich App 14, 24-25; 592 NW2d 379 (1998) (denying the injured person’s request to reform an insurance contract to be added as a “named insured” because neither mutual mistake nor fraud was alleged and becaus e the injured person “was not a party to the insurance contract”); Stone v Auto-Owners Ins Co , 307 Mich App 169, 180; 858 NW2d 765 (2014) (denying reformation to surviving spouse to be added as named insured of insurance policy of surviving spou se’s parents, who had added t he uninsured accident vehicle owned by deceased spouse to their policy, because neither spous e was a party to the contract between surviving spouse’s parents and the insurance company). In sum, plaintiffs lack standing to request reformation of the ins urance contract between Auto-O wners and Herington, and the
circumstances show at best a unilateral or mutual mistake betwe en the contracting parties as to-6- the legal effect of the contract. These circumstances will not support reformation of the contract.

Holda , 312 Mich at 405-406; Casey , 273 Mich App at 398.

Plaintiffs’ argument—that the public policy evinced by the no- fault act and this Court’s
decision in Corwin nevertheless require that the trial court reform the Auto-Owne rs-Herington insurance contract—also fails. First, the trial court correctl y distinguished Corwin on the basis that Chrysler LLC (formerly DaimlerChrysler) had set up a schem e that violated the no-fault act and public policy, whereas in the present case Auto-Owners was not “acting in a manner which is violative of public policy or a ttempting to subvert a statut ory [scheme].”

In Corwin , 296 Mich App 242, Chrysler leased a Jeep to its retiree, JohnCorwin, and acted as a self-insurer by having one of its related companies, DaimlerChrysler Insurance Company (Chrysler Insurance), “front” 4 an insurance policy that covered the Jeep but provided that the named insured was “DaimlerChrysler Corporation and its United States subsidiaries.”

Id . at 248-249. Further, the Chry sler Insurance policy purported to provide John (and his spouse, Vera-Anne) with PIP insurance, and John believed he had such co verage because he paid for insurance as part of his lease payments. Id . In fact, this Court found that John had a direct contractual relationship to Chrysler Insurance because “John pu rchased no-fault insurance for the Jeep Compass through Chrysler Insurance because the insurance p remium was deducted from his monthly pension checks. Thus, Chrysler Insurance provided no-f ault insurance to the Corwin household and was the Corwins’ ‘personal insurer.’ ” Id . at 262-263. And in the underlying litigation, the Chrysler defenda nts pleaded no contest to the a llegation that “ the Corwins had a policy of insurance issued by” Chrysler Insurance. Id . at 264 (emphasis in original). Accordingly, Corwin is factually distinguished from the present case because the i njured party and statutory owner of the Jeep, John Corwin, who was required to maintain security, id . at 254, 260, had a direct and indirect cont ractual relationship with th e insurer.

The Corwin Court “reform[ed] the Chrysler Insurance policy to comply withMichigan law by including both John and Vera-Anne as ‘named insureds’ fa lling within the policy’s definition of ‘you.’ ” Id . at 247-248. The Court imposed this equitable remedy because “(1) Chrysler LLC and its United Stat es subsidiaries, the named insu reds in the policy, do not have an insurable interest and (2) the pol icy contravenes the legislati ve intent of the no-fault act.” Id . at 257. The Court discussed at lengt h why Chrysler (and its subsi diaries) did not have an insurable interest, id . at 257-260, but the Court also noted that “[t]he critical iss ues in this case are whether the Chrysler Insurance policy complies with the no-fault act an d, if not, whether the policy must
be reformed.” Id . at 256. In regard to the no-f ault act, the Court held that C hrysler’s insurance scheme violated the act’s intent by “enable[ing] Chrysler Insur ance to avoid primary liability for PIP benefits that are payable t o injured people that Chrysler I nsurance personally insures, i.e., the Corwins[,] . . . whenever the Corwins are a named insured in an other no-fault policy in their

4 To “front” an insurance policy is “ ‘[t]he use of an insurer t o issue paper—that is, an insurance policy—on behalf of a self-insured organization . . . without t he intention of bearing any of the
risk.’ ” Corwin , 296 Mich App 248 n 3 (citation omitted). “ ‘The risk of loss is transferred back
to the self-insured . . . with an i ndemnity or reinsurance agre ement.’ ” Id

.-7- household.” Id . at 262-263. The Court reasone d it would “not a llow Chrysler Insurance to avoid the Legislature’s intent that an injured person’s personal insu rer stand primarily liable for PIP
benefits.” Id . at 263.

As the trial court in the present case recognized, there is so me similarity between this
case and that in Corwin , but only to the extent that Herington lacked an insurable int erest in the 1994 Buick of which her son, Arthur Grant, was the registered o wner. Michigan law requires that the named insured have an “insurable interest” to support a valid automobile liability insurance policy. Morrison , 286 Mich App at 572. While “public policy forbids the issuance of an insurance policy where the [named] insured lacks an insurabl e interest[,]” it does not require
that an otherwise valid insuran ce policy become void automatica lly. Id . at 573-574. “An insurable interest in property i s broadly defined as being pres ent when the person has an interest in property, as to the existence of which the person will gain benefits, or as to the destruction of which the person will suffer loss.” Madar v League Gen Ins Co , 152 Mich App 734, 738; 394 NW2d 90 (1986). But one need not be the owner or registrant of a vehicle to have an insurable interest adequate to support PIP coverage. Universal Underwriters Group v Allstate Ins Co , 246 Mich App 713, 725; 635 NW2d 52 (2001). “A person obviously has an insurable interest in his own health and well-being . . . which entitles persons to perso nal protection benefits regardless
of whether a covered vehicle is involved.” Madar , 152 Mich App at 738. In the present case, had Arthur been injured while sti ll residing with Herington, he could have claimed PIP benefits under Herington’s policy because he did not have insurance of h is own. MCL 500.3114(1). So the trial court correctly observed that Herington arguably had an insurable interest concerning PIP coverage regarding the Buic k, to which Arthur retained the key while he was living with her.

But even if Herington lacked a n insurable interest to support her adding the 1994 Buick to her insurance policy, the remedy would not be to reform the policy to add Arthur as a named insured. Rather, the remedy would be to void that part of the Auto-Owners policy. “A policy is
void when there is not aninsurable interest.” Corwin , 296 Mich App 258. Unlike in Corwin

, where John Corwin believed he had purchased no-fault insurance from the Chrysler defendants, with whom he had a contract relationship concerning the Jeep he leased and the Jeep’s insurance that he paid for, neither Arthur G rant, the Buick’s registered owner who was required to maintain security on it, MCL 500.3101(1), nor Angela Grant, his spouse a nd a constructive owner, had a contract relationship with Aut o-Owners. Further, both Arthur G rant and Angela Grant were fully aware that the Buick was uninsured, and neither Grant mai ntained no-fault insurance. And, there is nothing about the Auto-Owners policy that permitted Au to-Owners to shift their priority liability for PIP benefits on be half of Herington, the policy’s named insured, if she were injured in an automobile accident. Thus, nothing in the Auto-Owners po licy is contrary to the no-fault act. The only public policy implicat ed is that Herington lacke d an insurable inter est in the Buick.
But in Corwin , the critical issue was whether there was compliance with the intent of the no-fault

act. Corwin , 296 Mich App 256. That Herington lacked an insurable interes t in the Buick does not alter that under the no-fault act it was Arthur’s responsib ility as its owner and registrant to maintain security. MCL 500.3101(1). In addition, as a co-owne r of the Buick, Angela would have the same responsibility to maintain security. Id . Moreover, it is the stated policy of the nofault act that owners who shirk their responsibility to maintai n security are denied no-fault benefits. MCL 500.3113(b). It would frustrate the intent of t he no-fault act to grant plaintiffs request to reform the Auto-Owner s policy to add Arthur Grant as a named insured under these circumstances where the Grants are not parties to the contract, no facts justify reformation under-8- long-standing caselaw, and where the Grants knowingly failed to maintain security required by the no-fault act. MCL 500.3113(b).

Consequently, for all the foregoing reasons, the trial court p roperly denied plaintiffs request to reform the insurance contract between Herington and Auto-Owners. The undisputed facts show that Angela Grant is not entitled to no-fault benefi ts under Auto-Owners policy
because she is not a named insured and she is not a relative do miciled in the household of the named insured, Vera Herington. See 500.3114(1). Angela Grant also has no right to no-fault benefits under Herington’s Auto-Owners policy because it did no t insure either Arthur Grant, the owner of the Buick, or Angela G rant, its operator. See MCL 500 .3114(4). Further, neither Grant maintained security for the Bui ck resulting in Angela Grant’s l osing entitlement to no-fault benefits. MCL 500.3113(b); MCL 500.3101(2)(k)( i ). Finally, because plai ntiffs right to no-fault benefits depends on Angela Grant ’s right to no-fault benefits, see Chiropractors Rehab Grp , 313 Mich App at 126-130, and Angela Grant has no right to no-fault benefits form Auto-Owners, MCL 500.3114, or any other insurer, MCL 500.3113(b), the trial court correctly granted summary disposition to Auto-Owners.

We affirm. Defendants, as the prevail party, may tax costs pursuant to MCR 7.219.

/s/ Stephen L. Borrello /s/ Jane E. Markey /s/ Michael J. Kelly