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### STATE OF MICHIGAN

COURT OF APPEALS

ROBERT MILLER and DIANE MILLER,

Plaintiffs-Appellants/CrossAppellees, UNPUBLISHED August 2, 2016

v No. 325885 Tuscola Circuit Court FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN, LC No. 12-027312-CK

Defendant-Appellee/CrossAppellant.

Before: J ANSEN , P.J., and S ERVITTO and M. J. K ELLY , JJ.

P ER C URIAM

. In this insurance dispute follo wing a house fire, plaintiffs R obert and Diane Miller appeal as of right the trial court’s order directing a verdict in favo r of defendant, Farm Bureau General Insurance Company, following the presentation of plaintiffs’ pr oofs at a jury trial. Defendant cross-appeals, challenging the trial court’s order granting ref ormation of the insurance contract to list plaintiff Diane Miller as a named insured under the policy . We reverse and remand for further proceedings.

Plaintiffs first argue that the trial court abused its discret ion when it refused to allow plaintiffs to reopen proofs for the purpose of formally admitti ng the relevant insurance policy into evidence. This issue arose after defendant moved for a di rected verdict. During arguments on the motion, the trial court commented that the insurance pol icy had not been admitted into evidence, which prompted plaintiffs to move to reopen proofs fo r the purpose of admitting the policy. The trial court ultimately granted defendant’s motion for a directed verdict in part because the policy had not been introduced, and summarily state d that it was denying plaintiffs’ motion to reopen proofs.

We review a trial court’s decision whether to allow a party to reopen proofs for an abuse of discretion. Bonner v Ames , 356 Mich 537, 541; 97 NW2d 87 (1959). “The trial court abuse s its discretion when its decision results in an outcome that fal ls outside the range of reasonable and principled outcomes.” Patrick v Shaw , 275 Mich App 201, 204; 739 NW2d 365 (2007).

We review a trial court’s decision to direct a verdict de novo

. Meagher v Wayne State Univ , 222 Mich App 700, 708; 565 NW2d 401 (1997). “When evaluating a motion for a directed-2- verdict, a court must consider the evidence in the light most f avorable to the nonmoving party, making all reasonable inferences in favor of the nonmoving part y.” Id. “Directed verdicts are appropriate only when no factual question exis ts upon which rea sonable minds may differ.” Id.

When evaluating a motion to reopen proofs, a trial court shoul d consider whether the adverse party would be “deceived or prejudiced” by reopening th e proofs, and whether there would be inconvenience or surprise to the court, parties, or co unsel. Bonner , 356 Mich at 541. Other relevant factors include, “whether conditions have change d or undue advantage would result, whether newly discovered and material evidence is sough t to be admitted, whether surprise would result, and the timing of the motion during the trial.” People v Moore , 164 Mich App 378, 383; 417 NW2d 508 (1987), mod in part on other grounds 433 Mich 851 (1989).

The trial court abused its discretion when it refused to allow plaintiffs to reopen proofs to formally admit the insurance contract. In Bonner , which involved an automobile-pedestrian accident, the plaintiff moved to reopen proofs to introduce evi dence of the distances involved in terms of feet rather than city “blocks.” The trial court denie d the motion, and then granted the defendant’s motion for a directe d verdict. Our Supreme Court r eversed that decision, stating:

In thus denying plaintiff’s mo tion to reopen to establish the meaning of ‘block’ in terms of length in feet the court was in error. We recognize, of course, and have often held, that a motion to reopen proofs is a matter within the discretion of the court. But the discretion must be a sound ju dicial discretion. Here the case had not proceeded to such a point, nor had condit ions so changed, that any undue advantage would be taken by plaintiff. The prin ciples involved were well stated in Bommer v Stedelin , [237 SW2d 225, 229 (Mo App)], wherein the court held:

“There was no showing of surprise to defendants or of inconvenience to the court, parties, counsel, or jury or that the adverse party would have been deceived or prejudiced in any manner by granting the leave. The ruling on the motion for a directed verdict had not yet been made. The court denied plain tiff the opportunity to offer evidence to prove that defendants owne d and operated the parking facility, wh ile at the same time direc ting a verdict against plaintiff for fa ilure to prove such fact. This constituted an abuse of discretion.” [ Bonner , 356 Mich at 541 (footnote omitted).]

The same is true in this case. There was no question of fact in this case whether the policy existed, was valid, and was current. In addition, defen se counsel acknowledged in opening statement that the policy covered replacement costs, but limited the initial amount paid to actual cash value, which invo lved a calculation of depreciat ion. There would have been no surprise, inconvenience, or prejud ice to defendant from the formal introduction of the document, which both parties were relying on throughout the case. There was no principled reason for not allowing plaintiffs to reopen p roofs for the limited purpose of admitting the policy. Accordingly, the trial court abused its discretion by denying plaintiffs’ re quest to reopen their proofs for that limited purpose.-3- Plaintiffs also argue that the trial court erred in directing a verdict in favor of defendant on the ground that plaintiffs failed to present sufficient evid ence concerning the damages to their home. We agree.

At trial, plaintiffs presented the voir dire testimony of Ross Poorman, an owner of Michigan Fire Claims, Inc., the f irm that plaintiffs’ hired to assist them in completing their sworn statement of proof of loss for the damage to the home’s structu re and Diane’s personal property inventory listing items damaged or destroyed by the fire, as fo undation for introduction of their inventory. Although offered as a lay witness because of his as sistance in the preparation of the documents, Poorman also provided testimony concerning the metho dology used in determining the replacement cost value of the structure and the means by wh ich Poorman and his employees calculated depreciation, to arrive at the actual cash value of the home. An employee of the firm, Jason Marx, was permitted to testify about the replacement cost value of the property. However, the trial court denied plaintiffs’ request to have Marx also te stify about depreciation, on the ground that Marx’s testimony abouthis role in preparing the de preciation amount differed from what Poorman had described. The trial court then found that pl aintiffs could not offer any competent testimony concerning depreciation, thus rendering the ir evidence concerning actual cash value without an adequate foundation, and therefore direct ed a verdict in favor of defendant on this issue.

“A trial court’s decision wheth er to admit evid ence is reviewe d for an abuse of discretion, but preliminary legal determinations of admissibility are revie wed de novo[.]” Albro v Drayer

, 303 Mich App 758, 760; 846 NW2d 70 (2014). The trial court’s d etermination of the qualifications of an expert witne ss is also reviewed for an abu se of discretion. Id

. Both parties agree that, as in this case, where no repairs had been made, the insurance policy provides for an award of “actual cash value” for the str uctural loss of plaintiffs’ home, which is less than the full replacement cost of the home. The policy defines “actual cash value” as “replacement cost minus depreciation and obsolescence.” The refore, to prove actual cash value according to the policy, p laintiffs were required to pres ent some evidence about the “replacement cost” as well as “depreciation and obsolescence,” neither of which is specifically defined in the policy.

In determining what constitutes the “actual cash value” of an item at the time of loss, this Court has held that a trier of fact may consider “any evidence logically tending to the formation of a correct estimate of the value of the destroyed or damaged property[.]” Davis v Nat’l American Ins Co , 78 Mich App 225, 233; 259 NW2d 433 (1977) (quotation marks an d citation omitted). Under this so-called “broad evidence rule,” “courts have not abandoned consideration of either market or reproduction or replacement values in arriv ing at ‘actual cash value,’ but view them merely as guides in making that determination, rather than shackles compelling strict adherence thereto.” Id . at 233-234 (citation omitted). “Although damages based on sp eculation or conjecture are not recoverable, damages are not speculative merely because they cannot be ascertained with mathematical precision. It is sufficient if a reasonable basis for computation exists, although the result [may] be only approximate.” Berrios v Miles, Inc , 226 Mich App 470, 478; 574 NW2d 677 (1997) (citations omitted). A lack of precis e proof of damages does not preclude recovery. Id . “Moreover, the certainty requirement is relaxed where the fa ct of damages has been established and the only question to be decide d is the amount of damages.”-4- Hofmann v Auto Club Ins Ass’n , 211 Mich App 55, 108; 535 NW2d 529 (1995). “[W]here injury to some degree is found, we do not preclude recovery for lack of precise proof [of damages]. We do the best we can with what we have.” Purcell v Keegan , 359 Mich 571, 576, 103 NW2d 494 (1960); see also Hofmann , 211 Mich App at 111.

In this case, the fact that plaintiffs suffered damages was es tablished because there was no dispute that a fire destroyed plaintiffs’ home. Thus, the c ertainty requirementis relaxed given that only the amount of damages was in dispute. With respect t o the amount of damages due to the loss of the home, the parties agree that the policy provide d for an award of actual cash value, unless actual repair or replacement is completed, in which case plaintiffs would be entitled to the replacement cost. Defendant arg ues that it was entitled to a d irected verdict in part because plaintiffs did not present evide nce that any part of the home h ad been repaired or replaced. Neither party presented any evidence that any work has been don e on the home. T o the contrary, attorneys for both parties admitted that no work had been done. Therefore, defendant’s argument that plaintiffs were required to have someone specifically test ify that the home had not been repaired or replaced in order to support a claim for damages is without merit. This was not a contested issue at trial. Likewise, any claim that the replace ment cost exhibit was not accurate because it included items for the basement is without merit. T he exhibit contained line items. The fact that the evidence contained more information than nece ssary to determine a “replacement value,” should that be the proper measure of damag es, does not render the evidence inadmissible or Marx’s testimony incompetent. Defendant would have been free to present competing evidence of what it c onsidered to be t he proper repla cement value, or argue to the jury that it should disregard the line items concerning the basement when arriving at its own determination of the proper replacement value.

The trial court erred in refusing to admit Marx’s testimony co ncerning depreciation because of Marx’s statements concerning his involvement in prep aring the depreciation portion of plaintiffs’ damages evidence. First, while the trial court appears to have found that Marx’s statements concerning his involvement were inconsistent with Po orman’s, this is not the case. Poorman was asked by defense counsel whether he made the decisi ons about depreciation and actual cash value, and replied that he did. But when asked how the depreciation was calculated, Poorman stated, among other things, that he spoke with Marx, an d later admitted that all of his information about the file came from Marx. Later, he again sta ted that, based on the information that had been provided to him, including the quality of materia ls, he thought that it was a fair depreciation amount. Marx’s te stimony was not inconsistent with this. Marx stated that he was involved in calculating the depr eciation in this case, and thathe had made the initial determination concerning depreciation. He then discussed it wi th Poorman and explained the basis for his decision to Poorman. While Poorman had the abili ty to overrule Marx’s decision, he did not do so “to [Marx’s] knowledge.” Had Poorman testifie d, the jury could reasonably have found that both were involve d in arriving at the depreciat ion amount, especially considering that Poorman was in a supervisory role and based his determinat ion on Marx’s experience as well.

Second, even if this were not the case, there is no basis for concluding that a trial court can simply refuse to allow a witness to testify because his tes timony might differ from, or even directly contradict another witn ess’s testimony. To the contra ry, Marx was competent to testify under MRE 601. Marx testified that he had personal knowledge o f preparing, or assisting-5- Poorman in preparing, the depreciation and thus was competent t o testify about its preparation under MRE 602. Defendant could cer tainly have cross-examined M arx concerning his actual participation in the de preciation calculation.

Although plaintiffs did not offer Poorman as an expert witness on depreciation, he arguably presented an adequate foundation to be qualified. MRE 702 provides:

If the court determines that sc ientific, technical, or other s pecialized knowledge will assist the trier of fact to understand the evide nce or to determine a fact in issue, a witness qualified as an expert by knowledge, s kill, experience, training, or education may testify thereto in the form of an op inion or otherwise if (1) the testimony is based on sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliabl y to the facts of the case.

Poorman’s testimony provided a sufficient basis to find that he met these qualifications. Nevertheless, in his explanation for how he arrived at an appro priate depreciation amount, he stated that depreciation is not an exact science. Decisions fr om this Court and other jurisdictions support this assertion. See Salesin v State Fa rm Fire & Cas Co , 229 Mich App 346, 368; 581 NW2d 781 (1998), and Louisiana DOTD v McKeithen , 976 So2d 832, 840 (La App, 2008). Poorman also explained how depr eciation is calculated generally , including review of the building materials used and the overall condition of the struct ure. Marx could have provided a similar explanation to the jury.

Marx testified about his experience, which included several ye ars of expertise in providing property estimates, and he stated that he had writtenbetween 2,500 and 3,000 estimates for insurance carriers, and had written 1,000 estimat es for Michigan Fire Claims, Inc. Marx also testified that Michiga n does not require estimators b e licensed. Defendant has presented nothing to dispute this. The underlying fact, i.e., the valuation of the home, was in evidence and the trial court ha d found that the methods and the program Marx used to arrive at this valuation were generally used in the industry. In additio n, “MRE 703 does not preclude an expert from basing an opinion on the expert’s personal knowledg e.” Morales v State Farm Mut Auto Ins Co , 279 Mich App 720, 735; 761 NW2d 454 (2008).

In sum, given the recognition that depreciation testimony is b oth inherently subjective and that the court is suppose d “to do the best we can with what we have,” Purcell , 359 Mich 576, Marx could certainly have been qualified as an expert witness o n depreciation and testified thereto if the trial court had not erred in refusing to allow h im to testify about depr eciation at all.

For these reasons, particularly where plaintiffs had already d emonstrated that they had suffered a loss, thus lessening their burden here, Unibar Maintenance Servs, Inc , 283 Mich App at 634; Hofmann , 211 Mich App at 108, th e trial court erred when it granted a directed verdict on the basis of the evidence plain tiffs presented regarding the am ount of damage to their home.

Plaintiffs similarly argue that the trial court erred in direc ting a verdict based on its conclusion that plaintiffs failed to present adequate evidence concerning damages to Diane’s personal property. As with the loss involving the home itself, the fact of plaintiffs’ damages was-6- established because it was undisputed that a fire in plaintiffs ’ home damaged Diane’s personal property. Moreover, Diane’s testimony included detailed descri ptions of the property items she owned and the damage to them, which were accompanied by the pre sentation of relevant photographs. Hence, the certainty requireme nt is relaxed, give n that only the amount of damages was in dispute. Unibar Maintenance Servs, Inc , 283 Mich App at 634; Hofmann , 211 Mich App at 108.

During Diane’s testimony, plai ntiffs sought to introduce the i temized list of personal property Diane prepared in conjunction with Billy Ray SaintMari e, a former employee of Michigan Fire Claims, Inc. In addition, Diane testified both a t trial and at her earlier deposition that she participated in arriving at the values for some of the items and, after the other valuations were made by SaintMarie, she had the opportunity to review and correct them, and did correct some of the values. Despite t his testimony, the trial court in itially determined that the document contained inadmissible hearsay “as to the columns that would have been prepared by others” and only conditionally admitted it into evidence.

Hearsay is “a statement, other than the one made by the declar ant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” MRE 801(c). “As used in the definition of hearsay, the term “statement” means “ (1) an oral or written assertion or (2) nonverbal conduct of a person if it is intended by the pers on as an assertion.” MRE 801(a). Generally, hearsay is not admi ssible. MRE 802. However, MRE 8 03(6), also known as the business record exception, provide s the following exception:

Records of Regularly Conducted Activity. A memorandum, report

, record, or data compilation , in any form, of acts, transactions, occurrences, events, conditions, opinions , or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge , if kept in the course of a regularly conducted business activ ity, and if it was the regular practice of that business activity to make the memorandum, report, record, or da ta compilation, all as shown by the testimony of the custodian or other qualifi ed witness, or by certification that complies with a rule promulgated by the supr eme court or a statute permitting certification, unless the source of informat ion or the method or circumstances of preparation indicate lack of trustworthiness. The term “business” as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or n ot conducted for profit. [Emphasis added.]

Because the personal property inventory was prepared in the re gular course of Michigan Fire Claims’ business, the list itself falls within the busines s records exception. Moreover, the trial court erred to the extent that its decision relied on any claim that hearsay within hearsay prevented introduction of the inventory. Because the valuation s were “data compilations” and “opinions” made in the course of that business activity, made “ by, or from information transmitted by, a person with knowledge,” these valuations were themselves admissible under this exception. Diane testified, both at trial and in an earli er deposition, that she participated in arriving at the values for some of the items and, after the oth er valuations were made by SaintMarie, she had the opportunity to correct them, and did co rrect some of the values. She thus demonstrated that values were compiled by, or from informa tion transmitted by, persons-7- with actual knowledge. Similarly, while Kelly Bridgewater, ano ther former employee, prepared depreciation calculations, these were also data compilations an d opinions made in the course of business, by or with input f rom someone with knowledge.

Moreover, Poorman’s testimony, had the trial court not found h im incompetent to testify, would have been offered in part to show that the records were a ccurate and were prepared in the course of Michigan Fire Claims, Inc.’s business. When discussi ng his participation with respect to the personal property claim, P oorman stated that the persona l property team prepared documents for the personal property adjuster, and Poorman “ulti mately” oversaw the entire file. This satisfies the “custodian” element of the exception. See People v Vargo , 139 Mich App 573, 580–581; 362 NW2d 840 (1984) (providing that the individual mus t have “[k]nowledge of the business involved and its regular practices” to qualify). This inventory was therefore admissible under the business records excep tion. The trial court abused i ts discretion in rul ing otherwise.

In addition, the trial court admitted into evidence plaintiffs ’ proof-of-loss submission. This exhibit contained a summary of both the loss and damage to the structure, as well as the calculations of actual cost. During her deposition, Diane Mill er testified that this proof-of-loss statement was accurate, and stated that she estimated that it w ould take between $100,000 and $200,000 to replace the personal pr operty. She again adopted t his proof of loss as an accurate assessment of the actual value of the personal property at tria l. While the trial court later ordered the proof of loss redacted to remo ve the estimates contained th erein, which we conclude she should not have done, Diane’s te stimony still stood. The proof of loss itself, along with Diane’s testimony concerning the actual items lost in the fire and her own estimate of the value of the personal property, provided sufficient evidence of the amount o f the loss to provide a reasonable basis for computation of a permissible recovery under the relax ed standard appropriate here, even without the admission of the inventory. Unibar Maintenance Servs, Inc , 283 Mich App at 634; Berrios
, 226 Mich App at 478; Hofmann , 211 Mich App at 108.

We thus conclude that the trial court abused its discretion wh en it granted a directed verdict concerning plaintiffs’ proof of damages for the loss of Diane Miller’s personal property.

In its cross-appeal, defendant argues that the trial court err ed in both entertaining plaintiffs’ motion to reform the insurance contract, and in granting reformation. We disagree.

Interpretation and application of court rules are questions of law, which we review de

novo. In re Sanders , 495 Mich 394, 404; 852 NW2d 524 (2014). We review for an abu se of discretion the trial court’s determination whether a mutual mis take justifies granting the equitable remedy of reformation of a contract. Lenawee Co Bd of Health v Messerly , 417 Mich 17, 26, 31; 331 NW2d 203 (1982).

“A court of equity has power to reform the 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), quoting Raymond v Auto–Owners’ Ins Co , 236 Mich 393, 396; 210 NW 247 (1926). Reformation is an equitable reme dy available for contracts wher e the writing “fa ils to express the intentions of the parties . . . as the result of accident, inadvertence, mistake, fraud, or inequitable conduct . . . .” Najor v Wayne Int’l Life Ins Co , 23 Mich App 260, 272; 178 NW2d 504 (1970); see also Holda v Glick , 312 Mich 394, 403-404; 20 NW2d 248 (1945). Where the basis f or a-8- proposed reformation is mistake, the mistake must be mutual. Id. ; Retan v Clark , 220 Mich 493, 496; 190 NW 244 (1922). In addition, the person seeking reform ation due to mistake must present clear and convincing evidence of the mistake and the mu tuality “proof to warrant reformation must be clear and convincing.” Holda , 312 Mich at 403-404. And, a mistake in law, i.e., a mistake by one side or the other regarding the leg al effect of an agreement, is not a basis for reformation. Schmalzriedt v Titsworth , 305 Mich 109, 119–120; 9 NW2d 24 (1943); Olsen v Porter , 213 Mich App 25, 29; 539 NW2d 523 (1995).

Citing Anderson v Mollitor , 223 Mich 159, 163; 193 NW 851 (1923), defendant argues that reformation must be pleaded in the complaint before it can be granted. However, Anderson involved the somewhat unique cir cumstance in which the plaintif fs had asked in their initial complaint for reformation of a deed in order to have it comply with a land contract for the property that had preceded the deed, and defendants , who claimed that the deed was correct and the land contract incorrect, did not ask for reformation of the underlying land contract until a later hearing. Id . at 161-162. The trial court did not allowdefendants to seek reformation at that juncture. That case is dis tinguishable on its facts.

Moreover, amendment was not strictly required because reformat ion is a remedy, not a claim. Holda , 312 Mich at 403-404. As demonstrated in Corwin v DaimlerChrysler Ins Co , 296 Mich App 242; 819 NW2d 68 (2012), a party need not necessarily “plead” reformation in order to have this remedy applied. Corwin involved a priority dispute among three automobile insurance companies—none of which plead or sought reformation. A panel of this Court determined that one of the insurance company’s policies contrav ened the Michigan no-fault act and allowed the company to avoid and shift its statutory respon sibilities. Id . at 247. The Court thus reformed the insurance comp any’s policy to comply with Mic higan law by including certain persons as “named insureds” in the policy. Id . at 247-248.

Defendant also cites MCR 2.112(B)(1), which provides:

(B) Fraud, Mistake, or Condition of Mind.

(1) In allegations of fraud or mistake, the circumstances cons tituting fraud or mistake must be stated with particularity.

However, defendant ignores MCR 2.112(D), which provides:

(D) Action on Policy of Insurance.

(1) In an action on a policy of ins urance, it is sufficient to allege

(a) the execution, date, and amount of the policy,

(b) the premium paid or to be paid,

(c) the property or risk insured,

(d) the interest of the insured, and-9- (e) the loss.

In addition, plainti ff’s complaint did in clude a request that the trial court issue a judgment of damages, along with “costs, interest and attorney fees as we ll as other relief to which they may be entitled.” Even if plaintiffs should have pleaded refor mation initially, MCR 2.118(A)(2) provides that “[l]eave [to amend] shall be freely given when ju stice so requires.” See also Tisbury v Armstrong , 194 Mich App 19, 21; 486 NW2d 51 (1991) (“the policy of this state favor[s] the meritorious determination of issues”), and MCR 2.1 18(C)(1). For these reasons, defendant has not established that the trial court erred in ent ertaining plaintiffs’ motion for reformation of the contract.

Defendant has also failed to show that the trial court abused its discretion in granting plaintiffs’ request to reform the insurance contract to list Di ana as an insured. Our Supreme Court’s decision in Heath Delivery Serv v Mich Mut Liability Co , 257 Mich 482; 241 NW 191 (1932), refutes defendant’s argument that plaintiffs were precl uded from asking for reformation on the ground that they were charged with reading the contract language, which provided that only Robert Miller was a named insured. In Heath Delivery Serv , the plaintiff and the defendant insurance company entered into an agreement for the defendant t o provide insura nce coverage on 20 of the plaintiff’s vehicles. The policy inadvertently faile d to list two of the plaintiff’s trailers, one of which was subsequently involved in a collision. Id . at 484-485. The Court determined that reformation of the contractwas proper because it was undi sputed that the pa rties had agreed that the policy should cover all 20 vehicles. Id . at 485. While noting the duty of an insured to read the insurance policy, the Court nevertheless held that “[w ]here through fault of the insurer an insurance policy does not cover the person or property inten ded, it may be reformed.” Id . at 486. In response to the defendant’s argument that the plaintif f was not entitled to reformation because he was negligent in failing to read the policy and ensu re that it covered the intended vehicles, the Court stated that failure to read the policy does not always prevent reformation of a
contract. Id . The Court noted that, were this the case, then “there would be few, if any, cases where a policy is reformed.” Id . The Court then stated that the rule requiring a party to rea d a contract cannot apply where the undisputed testimony evidences the parties’ agreement and the executed contract does not reflect that agreement. Id .; see also Whitney v Nat'l Fire Ins Co , 296 Mich 38, 43; 295 NW 551 (1941), and Mantua v Auto Club Ins Ass'n , 206 Mich App 274, 280; 520 NW2d 380 (1994).

Plaintiffs presented evidence th at defendant’s agent Soper spe cifically told Diane that the policy would provide “complete coverage” for her home and both her and her husband’s personal property, and that it would cover both Robert and hers elf. Diane stated that Soper never asked about excluding her from coverage or told her or indicate d that she would not be a named insured under the policy. Diane also averred that she never ex pressed any intent that she not be covered. Nothing in the applicat ion contradicts Diane’s testim ony about her discussion with Soper and the understanding that they had when she applied for the homeowners’ policy. In contrast, the application suppor ts her assertion that the parti es intended for both plaintiffs to be insureds. While Robert Miller’s name was written in the sectio n for “applicant information,” Diane signed as an “applicant.” In addition, Soper’s subsequen t statements after learning of Diane and Robert’s separation that Diane should not worry and t hat she was still “completely covered” also supports the trial court’s determination that bot h parties understood that Diane would be a named insured under the policy.-10- To the extent that defendant s uggests that Soper could not bin d defendant through his actions, we disagree. Soper was a “captive” agent, who worked for one insurer, and thus is the agent of that insurer, i.e., d efendant. And notwithstanding th e general no-duty-to-advise rule, see Harts v Farmers Ins Exch , 461 Mich 1, 7; 597 NW2d 47, 50 (1999), our Supreme Court also concluded in Harts that “when an event occurs that alters the nature of the relat ionship between the agent and the insured,” a special relationship may result, creating a duty on the part of the agent to advise an insured in some respect regarding insurance issues. Id . at 10. The change in the agent-insured relationship arises when (1) the agent misrep resents the nature or extent of the coverage offered or provided, (2) an ambiguous request is made that requires a cl arification, (3) an inquiry is made that may requi re advice and the agent, thoug h he need not, give s advice that is inaccurate, or (4) the agent assumes an additional duty by eith er express agreement with or promise to the insured. Id . at 10-11. When a special relationship exists, an agent assum es a duty to advise the insured regarding the adequacy of insurance cover age. Id

. Here, when Diane sought advice from his office, Soper’s later reassurances that the policy would remain effective and cover her even during plainti ffs’ separation acted as an affirmation of that fact by defendant to which it is bound and provides supporting evidence that the agent who initially prepared the policy acted under a mutua l mistake when doing so. See Bleam v Sterling Ins Co , 360 Mich 208, 213; 103 NW2d 466 (1960) (the mistakes of a corporation’s agents and employees are the mistakes of the corp oration, warranting reformation of a resulting contract). Although defendant maintains that th e trial court placed an unwarranted burden upon it by noting that it had not presented any evidence to contradict plaintiffs’ evidence, we instead conclude that the trial court’s remarks were a comme nt on the strength of the evidence supporting reformati on, not improper burden-shifting.

Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

/s/ Deborah A. Servitto /s/ Michael J. Kelly