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### STATE OF MICHIGAN

COURT OF APPEALS

JEFFREY D. LYNN,

Plaintiff-Appellant, UNPUBLISHED November 8, 2016

v No. 328321 Oakland Circuit Court PROVIDENT LIFE AND CASUALTY COMPANY, LC No. 2014-139764-CK

Defendant-Appellee.

Before: S TEPHENS , P.J., and S AAD and M ETER , JJ.

P ER C URIAM

. Plaintiff appeals as of right an order granting summary dispos ition to defendant. We affirm.

Plaintiff, a financial advisor with Morgan Stanley Smith Barne y LLC, partially stopped working because of a disability. 1 On January 28, 2013, plaintiff applied to defendant for parti al long-term disability benefits, which defendant paid, at a rate of $1471 a month, for seven months. Commencing January 8, 2014, defendant terminated the b enefits. Plaintiff alleged in his March 26, 2014, complaint that he remained disabled and tha t defendant’s denial breached his insurance policy with defendant. He requested the payment of past and future benefits, as well as costs a nd attorney fees.

On March 20, 2015, defendant filed a motion for summary dispos ition under MCR 2.116(C)(10), along with supporting documents. Defendant alleg ed that, under the insurance policy, partial disability benefits are only available if the i nsured incurs at least a 20% reduction in income because of a disabling condition. Defendant further alleged that plaintiff conceded that he had incurred no loss of income commencing June 15, 2014 , and that, therefore, the present case involved a limited period from August 1, 2011, to June 15, 2014. 2 Defendant

1 Plaintiff suffers from Churg-St rauss Syndrome, a condition tha t causes the inflammation of small and medium-sized blood vessels.

2 Plaintiff agreed with this stat ement in his reply to the motio n for summary disposition.-2- contended that it properly paid p laintiff for the only seven mo nths in that period during which he was partially disabled within t he meaning of the policy. Defen dant calculated plaintiff’s “prior earnings” under the policy as $33,463 a month for tax year 2010 . Defendant stated that this figure included amounts for “incentive pay” and “bonus loan pay ments” (hereinafter referred to as “EFL 3 payments”) and that these amount s were included in calculating plaintiff’s current earnings as well. Defendant concl uded: “Plaintiff has not posi ted any alternative explanation or rationale for disputing [defendant’s] Loss of Earnings calculat ions, or for disputing [defendant’s] conclusion that he failed to est ablish a 20% or greater Loss of Earnings for any of the months for which [defendant] did not pay him.”

Plaintiff replied on April 13, 2015, requesting that the court deny defendant’s motion and instead grant summary dispositi on to plaintiff. Plaintiff argu ed that the policy, to allow for the payments at issue, requires a 20% loss of earnings , not income , and that defendant improperly included in its calculations the EFL payments corresponding to a loan Morgan Stanley gave plaintiff to induce him to leave his prior employment. Plainti ff argued that loan forgiveness should not be counted as earnings under the policy because it d oes not arise from work and simply passively occurs “[s]o long as plaintiff is an employee . . . .” Plaintiff further argued that defendant’s documentary support for including the EFL payments in its calculations consisted of a “claim file memo” by defendant’s financial consultant and tha t her statements in the memorandum were inadmissible hearsay.

Plaintiff attached documentation to his answer, showing that h e signed a loan commitment agreement before star ting work with Morgan Stanley; for each year of his employment, one-ninth of the loan was to be forgiven. The prom issory note stated that the loan “does not constitute a bonus,” in conjunction with stating that plaintiff was to repay the loan should he terminate employment with Morgan Stanley.

Defendant filed a reply brie f, with supporting documentation, on April 22, 2015, first asserting that the documentation attached to its motion was pro per because it was admissible in content even if it was not admissible in form. Defendant furth er argued that the memorandum prepared by its financial consultant was, nevertheless, admissi ble in form because it was a business record. Defendant also argued that the EFL payments c onstituted income under the policy because they were dependen t on plaintiff’s employment by Morgan Stanley, were included as wages on plaintiff’ s tax forms, and were classified as part of plain tiff’s “earnings” on his pay stubs. Defendant also poi nted out that plaintiff, in a letter, expressly referred to the loan in question as a “signing bonus” a nd “payment for taking a chan ce.” In the letter, plaintiff stated, “They do forgiveness so I am ‘ch ained’ to the firm for 9 years. ”

The motion hearing took place on October 13, 2015. The partie s largely reiterated the positions taken in their filings, and the court took the matter under advisement. The trial court filed a detailed opinion on July 7, 2015. The court ruled that the memorandum prepared by defendant’s financial consultant was admissible as a business r ecord under MRE 803(6). The

3 Employee Forgivable Loan-3- court then discussed the loan documents, noting that, in order to receive the EFL payments, plaintiff was expressly required to be employed by Morgan Stanl ey and to use his best efforts to fulfill his duties. The court also emphasized that the EFL pay ments were included as “wages” on plaintiff’s tax forms. The cour t found for defendant, concludi ng:
Thus, the [c]ourt finds that the EFL payments are properly cons idered in the calculation of [p]laintiff’s Lo ss of Earnings in this matter.

It is undisputed that when [p]laintiff’s Loss of Earnings amou nt is calculated using the EFL payments, [p]laintiff incurred a 20% o r greater Loss of Earnings in the time period from August 1, 2011 through June 15 , 2014 only in the seven months for which [p]la intiff received benefits from [ defendant].

The present appeal followed.

We review de novo a trial court’s ruling regarding a motion fo r summary disposition. Maiden v Rozwood , 461 Mich 109, 118; 597 NW2d 817 (1999). “A motion under MCR 2.116(C)(10) tests the factual su fficiency of the complaint.” Id . at 120. “In evaluating a motion . . . under this subsection, a trial court considers affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties, MCR 2.116(G)(5), in th e light most favorable to the party opposing the motion.” Id . “Where the proffered evidence fails to establish a genuine i ssue regarding any material fact, t he moving party is entitled to ju dgment as a matter of law.” Id

. “[A]n insurance contract must be enforced in accordance with i ts terms.” Henderson v State Farm Fire & Cas Co , 460 Mich 348, 354; 596 NW2d 190 (1999). “[T]he terms of a contract must be enforced as written where there is no ambiguit y.” Id . “While we construe the contract in favor of the insured if an ambiguity is found, this does not mean that the plain meaning of a word or phrase should be perverted, or that a word or phrase, the meaning of which is specific and well recognized, should be given some alien con struction merely for the purpose of benefitting an insured.” Id . (citation omitted). Indeed, “[ t]he fact that a policy does n ot define a relevant term does not render the policy ambiguous.” Id . “Rather, reviewing courts must interpret the terms of the contra ct in accordance with their co mmonly used meanings.” Id

. The policy defines “earnings,” i n relevant part, as “your sala ry, wages, commissions, fees, bonuses and any other income earned for the work you do . . . .” It excludes from “earnings” social insurance benefits, disability benefits, sick pay, deferred-compensation or retirement distributions, and bene fits received under a formal wage or salary continuation plan.

The note signed by plaintiff that led to the EFL payments prov ides that the agreement may be terminated “immediately” i f plaintiff is no longer emplo yed by Morgan Stanley or if plaintiff “does not devote his[] entire, full and exclusive tim e, attention and energies to Morgan Stanley’s business or his[] best efforts to discharge his[] dut ies as an employee of Morgan Stanley . . . .” While the “stru cturing” of the EFL payments i s different than the “standard” receipt of a salary or wage, the fact remains that loan forgive ness does indeed constitute income obtained by plaintiff. This commonsense notion is made clear b y the fact that the EFL payments are included as wages on plaintiff’s W-2 forms for his tax fili ngs and by plaintiff’s own characterization of the money as “payment . . . .” In addition , it cannot seriously be contended-4- that these payments are not ear ned “for the work [plaintiff doe s],” considering that the payments depend on plaintiff’s devotion of his “entire, full and exclusi ve time, attention and energies to Morgan Stanley’s business” and require plaintiff’s “best effort s to discharge his[] duties as an employee of Morgan Stanley . . . .” The policy is not ambiguou s and there is no genuine issue of material fact; the trial court correctly ruled in defendant’s f avor.
Plaintiff contends that “[d]ef endant’s expert opinion that the forgivable loan[] installments where [sic] ‘earnings’ was inadmissible hearsay an d not within the business record exception.” It is difficult to discern to what, exactly, plain tiff is objecting. He does not argue, for example, that defendant’s motion was faulty but seems to be arguing that the trial court should not have depended on the financial consultant’s opinion in reaching its decision. However, the opinion of defendant ’s financial consultant is sim ply not necessary to determine that the EFL payments were correctly considered; this determina tion can be made, as discussed above, based on the wording of the insurance contract and other documents. To the extent that plaintiff may be attempting to a rgue that defendant’s motion wa s procedurally incorrect, he has not adequately supported such an argument. Caldwell v Chapman , 240 Mich App 124, 132; 60 NW2d 264 (2000) (discussing waiver).

Affirmed.

/s/ Cynthia Diane Stephens /s/ Henry William Saad /s/ Patrick M. Meter