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### STATE OF MICHIGAN

COURT OF APPEALS

HASTINGS MUTUAL INSURANCE COMPANY,

Plaintiff-Appellee, FOR PUBLICATION May 16, 2017 9:15 a.m.

v No. 331612 Berrien Circuit Court GRANGE INSURANCE COMPANY OF MICHIGAN, LC No. 14-000258-NF

Defendant-Appellant.

HASTINGS MUTUAL INSURANCE COMPANY,

Plaintiff-Appellant,

v No. 333193 Berrien Circuit Court GRANGE INSURANCE COMPANY OF MICHIGAN, LC No. 14-000258-NF

Defendant-Appellee.

Before: M ARKEY , P.J., and M URPHY and M ETER , JJ.

M URPHY , J.

In Docket No. 331612, defendant Grange Insurance Company of Mi chigan (Grange) appeals by right the trial court’ s order denying its motion for summary disposition and granting summary disposition in favor of plaintiff, Hastings Mutual Insu rance Company (Hastings). In Docket No. 333193, Hastings appeals by right the trial court’s order denying its motion for attorney fees. We affirm.

This case arises out of a fire that occurred on April 15, 201 4, in a barn owned by Williams Farms, LLC, a family-operated farm that grows a variet y of vegetables. Ryan Keath, a salaried employee of Williams Farms, regularly used the barn an d its equipment to provide repairs and maintenance to the farm’s vehicles, as well as to t he vehicles of family members.-2- Keath was repairing his sister’s motor vehicle when the fire be gan. The fire ultimately destroyed the barn and all of its contents. Hastings, the insurer of Wil liams Farms’s real and personal property, paid Williams Farms $699,134 in insurance benefits to cover the loss. Hastings later filed a claim as subrogee for pr operty protection benefits in t he same amount from Grange, the no-fault insurer of the vehicle involved in the fire. Grange d enied the claim by Hastings in August 2014, and Hastings subsequently filed suit against Grang e.
Both parties filed motions for summary disposition under MCR 2 .116(C)(10). The trial court granted summary dispositio n in favor of Hastings, finding that the no-fault act, MCL 500.3101 et seq ., rendered Grange liable for the property damage. The trial c ourt specifically ruled that MCL 500.3121(1) did not relieve Grange of liability, given that Williams Farms was a farm and was not in the business of repairing, servicing, or ma intaining motor vehicles. Accordingly, the trial court granted Hastings’ motion for summa ry disposition and denied Grange’s competing motion.

On appeal, Grange argues that the trial court improperly grant ed Hastings’ motion for summary disposition because Williams Farms was in the business of repairing, servicing, or maintaining motor vehicles f or purposes of MCL 500.3121(1) and, therefore, the statute operated to exclude Grange from liabilit y for the property damage. We d isagree.

This Court reviews de novo a ruling on a motion for summary di sposition, as well as issues of statutory construction. Johnson v Recca , 492 Mich 169, 173; 821 NW2d 520 (2012). With respect to a motion for summary disposition brought pursua nt to MCR 2.116(C)(10), this Court in Pioneer State Mut Ins Co v Dells , 301 Mich App 368, 377; 836 NW2d 257 (2013), set forth the governing pr inciples, stating:

In general, MCR 2.116(C)(10) provides for summary disposition when there is no genuine issue regarding any material fact and the m oving party is entitled to judgment or partial judgment as a matter of law. A motion brought under MCR 2.116(C)(10) tests the factual support for a party's claim. A trial court may grant a motion for summary disposition under MCR 2.116(C)(1 0) if the pleadings, affidavits, and other documentary evidence, when vie wed in a light most favorable to the nonmovant, show that there is no genuine issue with respect to any material fact. A genuine issue of material fact exists w hen the record, giving the benefit of reasonabl e doubt to the opposing party, l eaves open an issue upon which reasonable minds might differ. The trial court is no t permitted to assess credibility, weigh the evidence, or resolve factual disp utes, and if material evidence conflicts, it is not appropriate to grant a motion for summary disposition under MCR 2.116(C)(10). A court may only consider substantively admissible evidence actually proffered relative to a motion for summary di sposition under MCR 2.116(C)(10). [Citations and quotation marks omitted.]

With respect to the construction of MCL 500.3121 and statutes in general, our Supreme Court in Whitman v City of Burton , 493 Mich 303, 311-312; 831 NW 2d 223 (2013), observed:

When interpreting a statute, we follow the established rules of statutory construction, the f oremost of which is to discern and give effect to the-3- intent of the Legislature. To do so, we begin by examining the most reliable evidence of that intent, the language of the statute itself. If the language of a statute is clear and unambiguous, the statute must be enforced as written and no further judicial construction is permitted. Effect should be gi ven to every phrase, clause, and word in the statute and, whenever possible, no word should be treated as surplusage or rendered nugatory. Only when an ambiguity exis ts in the language of the statute is it proper for a court to go beyond t he statutory text to ascertain legislative intent. [Citations omitted.]

“The owner or registrant of a motor vehicle required to be re gistered in this state shall maintain security for payment of benefits under pe rsonal protec tion insurance, property protection insurance , and residual liability ins urance.” MCL 500.3101(1) (emphasis added). MCL 500.3121(1) provides:

Under property protection insurance an insurer is liable to pa y benefits for accidental damage to tangible property arising out of the owner ship, operation, maintenance, or use of a motor vehicle as a motor vehicle subje ct to the provisions of this section a nd sections 3123, 3125, and 3127. However, accidental damage to tangible property does not in clude accidental damage to tangible property, other than the insured motor vehic le, that occurs within the course of a business of repairing, servicing, or ot herwise maintaining motor vehicles. [Emphasis added.]

In the present case, the parties dispute whether vehicle repai rs performed by a salaried employee of Williams Farms, a business whose primary purpose is farming, qualifies under the course-of-business exception in MCL 500.3121(1). Our Supreme C ourt has ruled that a “business” encompasses a person engaged in a service, activity, or enterprise for benefit, gain, advantage, or livelihood. Terrien v Zwit , 467 Mich 56, 64; 648 NW2d 602 (2002), quoting Random House Webster’s College Dictionary (1991) and Black’s Law Dictionary (6th ed); see also Allied Prop & Cas Ins Co v Pioneer State Mut Ins Co , 272 Mich App 444, 450; 726 NW2d 83 (2006) (a business is a commercial enterprise or establishme nt). “Course of business” is defined as “[t]he normal routine in managing a trade or busines s.” Black’s Law Dictionary (10th ed).

Using these definitions, it becomes clear that MCL 500.3121(1) ’s exception is meant to exclude property damage where the purpose of the business in qu estion is to provide maintenance and repair services for motor vehicles—and not mean t to cover just any business that peripherally participates in these activities or any perso n that performs these activities. Although Williams Farms undoubtedly benefits from having vehicl e repairs done in-house, its enterprise for gain, advantage, and livelihood is focused on fa rming, not the repair, maintenance, and servicing of vehicles. Williams Farms is a farming busines s, not an automotive-repair business. Therefore, Williams Farms is not in the “business of repairing, servicing, or otherwise maintaining motor vehicles.” MCL 500.3121(1). Had the Legisla ture intended MCL 500.3121(1) to exclude repairing, s ervicing, or maintaining mot or vehicles in any business environment, the Legislature c ould have chosen alternate langua ge. Instead, the Legislature crafted MCL 500.3121(1) so that the prepositional phrase of “of repairing, servicing, or otherwise maintaining motor vehicles” modifies “a business.”-4- This conclusion is supported by this Court’s decision in Allied Prop , 272 Mich App 444, wherein this Court held that a no-fault insurer was not liable when property damage resulted from a fire caused by an unlicensed mechanic operating out of h is father’s home garage. This Court stated that the purpos e of MCL 500.3121(1)’s exception is “to exempt no-fault carriers from liability for property damage that occurs within the cours e of a vehicle-repair business[.]” Id. at 449. This Court determined that the large amount of equipme nt in the garage, the equipment’s $30,000 value, the existence of regular customers, the charging of fixed prices for jobs, and the income received from the services performed demon strated that the mechanic’s work was performed in the course of a vehicle-repair business. Id. at 451.

In sum, MCL 500.3121(1)’s exception applies only to vehicle-re pair businesses, which Williams Farms is not. Williams Farms primary business enterpr ise is farming and, although Keath performs services for the farm’s benefit with tools provi ded by the farm, there are no regular outside customers or a fi xed price list that would indi cate that the farm also operates a vehicle-repair business. Accordingly, MCL 500.3121(1) does not exclude Grange from liability for the damage, and the trial court properly rejected Grange’s motion for summary disposition and soundly awarded summary disposition to Hastings.

Following the trial court’s gr ant of summary disposition, Hast ings moved for attorney fees in accordance with MCL 500.3148(1) based on Grange’s alleg edly unreasonable denial of Hastings’ claim for property prot ection benefits. The trial co urt denied the motion, ruling that Grange’s denial of the claim was not unreasonable because Grang e reasonably believed that it was relieved of liabi lity under MCL 500.3121(1).

On appeal, Hastings argues that the trial court erred in denyi ng its motion for attorney fees because Grange’s rejection of the claim was unreasonable. MCL 500.3148(1) provides as follows:

An attorney is entitled to a reasonable fee for advising and r epresenting a claimant in an action for persona l or property insurance benefi ts which are overdue. The attorney’s fee shall be a charge against the insur er in addition to the benefits recovered, if the court finds that the insurer unreaso nably refused to pay the claim or unreasonably delayed in making proper payment.

In Ross v Auto Club Group , 481 Mich 1, 7; 748 NW2d 552 (2008), the Court explained the standards of review associ ated with a ruling under MCL 500. 3148(1), stating:

The no-fault act provides for attorney fees when an insurance carrier unreasonably withholds benefits. T he trial court's decision abo ut whether the insurer acted reasonably involves a mixed question of law and f act. What constitutes reasonableness is a q uestion of law, but whether th e defendant's denial of benefits is reasonable under th e particular facts of the cas e is a question of fact.

Whereas questions of law are reviewed de novo, a trial court's findings of fact are reviewed for clear e rror. A decision is clearly err oneous when the reviewing court is left with a definite and firm conviction tha t a mistake has been made. [Citations and quotation marks omitted.]-5- In Attard v Citizens Ins Co of America , 237 Mich App 311, 317; 602 NW2d 633 (1999), this Court examined MCL 500.3148(1):

When determining whether attorney fees are warranted for an in surer's delay to make payments under the no-fault act, a delay is not u nreasonable if it is based on a legitimate question of statutory construction, const itutional law, or factual uncertainty. When an insurer refuses to make or delays in making payment, a rebuttable presumption arises that places the burden on the insurer to justify the refusal or de lay. [Citations omitted.]

A no-fault insurer may have rea sonably delayed or refused to p ay a claim even where it is later determined that the insurer is required to pay the benefi ts. Moore v Secura Ins , 482 Mich 507, 525; 759 NW2d 833 (2008).

Grange, relying on the opinion of its counsel as well as the o pinion of outside counsel, believed that it was excluded from liability under MCL 500.3121 (1), and thus denied the claim for property protection benefits. Although we hold that Grange is not excluded from liability under MCL 500.3121(1), this does not necessarily mean, as noted in Moore , that Grange acted unreasonably in refusing to pay Hastings’ claim. Although we b elieve it to be a close call, given the dearth of pertinent cas elaw construing MCL 500.3121(1) and the factual circumstances of the case, we conclude that there existed “a legitimate question of statutory construction.” Attard

, 237 Mich App at 317. Accordingly, we affirm the trial court’s ruling on the issue. 1

Affirmed. Neither party having fully prevailed on appeal, we decline to award taxable costs under MCR 7.219.

/s/ William B. Murphy /s/ Jane E. Markey /s/ Patrick M. Meter

1 Given our holding, we need not address other arguments present ed by Grange, such as its assertion that Hastings, as a matter of law, was not entitled t o attorney fees under MCL 500.3148(1) considering its sta tus as a “subrogee.”