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### STATE OF MICHIGAN

COURT OF APPEALS

AUTO-OWNERS INSURANCE COMPANY,

Plaintiff-Appellee, UNPUBLISHED September 17, 2015

v No. 321396 Ingham Circuit Court INTEGON NATIONAL INSURANCE COMPANY, LC No. 12-001203-CK

Defendant-Appellant.

Before: B ORRELLO , P.J., and H OEKSTRA and O’C ONNELL , JJ.

P ER C URIAM

. In this case involving which insurer is the highest-priority n o-fault provider, defendant Integon National Insurance Comp any (Integon) appeals by right a n April 21, 2014, judgment in favor of plaintiff Auto-Owners Insurance Company against Intego n. The judgment followed a March 31, 2014, opinion and order wherein the trial court grant ed Auto-Owners’ motion for summary disposition pursuant t o MCR 2.116(C)(10). For the reas ons set forth in this opinion, we reverse the trial court’s j udgment and remand for entry of j udgment in favor of Integon.

I. FACTUAL BACKGROUND

In February 2009, Laura Dunn and Terry Dunn, her husband at th e time, moved from Michigan to North Carolina. On April 9, 2009, Laura filled out an application for a North Carolina automobile insurance pol icy at the Wagoner Insurance A gency (Wagoner Agency), an independent insurance agency that wrote insurance for multiple companies including Integon. Laura sought coverage for a 2006 Toyota Solara and a 1996 GMC J immy. At the time that Laura applied for coverage, both she and her husband had Michig an drivers’ licenses, and the Toyota was registered in Michigan, but Laura and Terry provided a residential address in Sneads Ferry, North Carolina, and represented that the vehicles would be garaged at the North Carolina address.

Ultimately, Integon issued a North Carolina auto insurance pol icy for both vehicles. The policy listed Laura as the “named insured” and Terry was listed as an additional driver. The policy listed Michigan Credit Union as a “loss payee” for the T oyota and listed Michigan resident, Jean Tremblay, as havin g an “additional interest,” in the vehicle. Tremblay was Laura’s ex-husband at the time the policy was issued and becaus e of Laura’s bad credit the-2- Toyota was titled in his name de spite Laura being awarded the v ehicle in the divorce. The policy was setup to renew automatically every six months upon payment of a renewal premium.

On April 29, 2010, Laura requeste d that the Wagoner Agency cha nge her address from the Sneads Ferry residence to a residence in N. Topsail Beach, North Carolina. Tracy Iovanna, a personal friend of Laura’s and a licensed insurance agent who w orked for the Wagoner Agency at the time, testified that the garaging location of the vehicl es was critical in determining whether to issue a North Carolina policy. Iovanna handled some of the transactions related to Laura’s policy.

From February 2009 through August 2011, Laura and Terry lived in North Carolina. In September 2011, Laura and Terry moved back to Whitmore Lake, Mi chigan and lived with Terry’s parents, Doyal and Ella Dunn. Doyal and Ella had a Mic higan no-fault insurance policy issued by Auto-Owners. Laura and Terry’s Integon policy expire d on October 9, 2011 due to their non-payment of the renewal p remium; however, the policy w as renewed on October 23, 2011, after Laura and Terry submitted a late renewal payment to the Wagoner Agency.

On November 19, 2011, Laura and Terry were involved in a motor vehicle accident in Brighton, Michigan while Laura was driving the Toyota. Terry s uffered catastrophic injuries. Neither party disputes that both the Integon and the Auto-Owner s policies were in effect at the time of the accident.

Following the accident, Integon refused to pay PIP benefits to Terry because it maintained that the North Carolina policy did not provide PIP b enefits and Integon was not required to comply with the Michigan no-fault act because it ha d no knowledge that Laura and Terry relocated to Michigan. Aut o-Owners then paid PIP benefit s to Terry under his parent’s policy because he was a family m ember of the insureds.

On December 4, 2012, Auto-Owners commenced this declaratory ac tion, alleging that Integon knew or had reason to know that Laura and Terry were mo ving to Michigan, but nonetheless renewed their North Carolina policy and that, as a result, Integon was required to reimburse Auto-Owners for the PI P benefits that it paid to Terr y under MCL 300.3012.

During discovery, Iovanna testif ied at a deposition that, in a ddition to knowing Laura through her capacity as an insuran ce agent at the Wagoner Agenc y, she had a “sid e relationship,” with Laura. Iovanna testified th at she learned that Laura and Terry were consider ing returning to Michigan as follows:

Q . Did it ever come to the attention of Wagoner or to you indiv idually that the Dunns, either Mr. or M rs., had moved away from North C arolina?

A

. I knew because I had a personal or side relationship with Laura. I knew that she was going to try to look for a job, just in talki ng to her. She had taken some leave from where she worked and she was going to go see if she could find a job.

Q . When was that? Do you recall?-3- A . I’m going to try not to get emotional, but my husband had pa ssed away the same week she -- that she stopped by my house. And -- I’m sorry

* * *

A . [] [H]e passed away unexpectedly on September 7th, and I thi nk she came by that night to tell me that she had heard. I had a hous eful of people. And she said that -- I think that T erry had to find a job. He migh t have already been gone ahead of her.

But she was going to Michigan -- she didn’t know what was goin g to happen -- to see if she could fi nd a job. But I don’t think sh e had moved -- you know, I’m pretty sure that she hadn’t moved or anything. She w as going to go look for a job.

* * *

Q . I understand. But your recollection is that Mr. Dunn had al ready gone back to Michigan to look for work or had already gone ahead of her; is that ---

A . [] That’s what I think. [Emphasis added.]

Iovanna also testified that “I did go out to the bank, and I th ink I seen her there. She was still at the bank and still trying to ge t her stuff together to go look for a job . . . [in] Michigan.”

In addition, Iovanna and Sharon Dowell, an employee of Integon , each submitted affidavits attesting that Integon sent numerous “coupons” to La ura and Terry at their North Carolina address that requested renewal payments and provided aspace to inform Integon if they had changed addresses. The coupons were submitted as exhibits to the affidavits. Dowell testified at a deposition that she had no information as to whe ther Laura or Terry had established residency outside of North Carolina. Dowell also testified tha t when the policy was renewed on October 17, 2011, Laura and Terry did not make any indication r egarding a changed address. Dowell testified that in December 2011, after the accident, Lau ra canceled the policy because of a move to Michigan.

Auto-Owners moved for summary disposition pursuant to MCR 2.11 6(C)(10), arguing that Integon’s North Carolina pol icy provided Michigan no-fault coverage, in part, because Integon’s agent, Iovanna, had kno wledge that Laura and Terry we re relocating to Michigan. Auto-Owners also argued that Integon was the first-priority ins urer because Terry was a named insured on the Integon policy. Integon filed a counter-motion for summary disposition arguing that Iovanna’s knowledge should not be imputed to Integon and t hat there were no facts to show that it knew or should have known tha t Laura and Terry relocate d to Michigan.

The trial court granted summary disposition in favor of Auto-O wners, reasoning that Integon should have known that Laura and Terry were taking up r esidency in Michigan. The court explained:-4- Here, Integon should have known that Laura and Terry Dunn were taking up residency in Michigan during the renewal period. Laura Dunn personally informed Iovanna that she and Terry Dunn were going to Michigan for an indefinite period of time to seek employment. This Court finds that seeking employment, in addition to the k nowledge that Laura and Terry D unn were licensed to drive in Michigan and had connections to Michigan, is sufficient to establish that Integon should have known that Laura and Terry D unn were taking up residency in Michigan during the renewal period beginning on October 9, 2011.

The trial court also rejected Integon’s argument that Iovanna’ s knowledge should not be imputed to Integon because, under Michigan law, “an independent insurance agent is an agent of the insured and not the insurer.” Instead, the trial court agr eed with Auto-Owners’ argument that North Carolina agency law applied, and that under North Carolin a law, NC Gen Stat § 58-33-20, an independent insurance agent is an agent of the insurer not t he insured. The court reasoned as follows:

Both the Dunns and Integon would have expected North Carolina law to be applicable based on the fact that the contract was negotiate d and executed in North Carolina. The interests of North Carolina also outweigh those of Michigan because North Carolina has a greater interest in seeing its age ncy laws applied where the agency relationship and interactions with the Dunns o ccurred in North Carolina.

Finally, for purposes of first-priority, the trial court concl uded that Terry was a named insured under the Integon policy reasoning that Terry “falls wi thin the definition of ‘you,’ thereby making him a party to the contract for insurance.” As a named insured under the Integon policy, the trial court concluded that Integon was the first-pr iority insurer for Terry under MCL 500.3114. The trial court entered a judgment in favor of Auto- Owners on April 21, 2014. This appeal ensured.

II. STANDARD OF REVIEW

We review de novo a trial court’s decision on a motion for sum mary disposition. Maiden v Rozwood , 461 Mich 109, 118; 597 NW2d 817 (1999). “A motion under MCR 2.116(C)(10) tests the factual sufficiency of the complaint.” Id . at 120. “Summary disposition is appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding a ny 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). “In reviewing a motion under MCR 2.116(C) (10), this Court considers the pleadings, admissions, affidavits, and other relevant docum entary evidence of record in the light most favorable to the nonmoving party to determine whethe r any genuine issue of material fact exists to warrant a trial.” Walsh v Taylor , 263 Mich App 618, 621; 689 NW2d 506 (2004). “A genuine issue of material fact exists when the record, givin g the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonab le minds might differ.” West
, 469 Mich at 183.

III. ANALYSIS-5- Integon argues that Terry does not have a statutory or contrac tual right to claim no-fault benefits under the North Carolin a policy because Integon was no t aware of Terry’s move to Michigan, and thus, it did not purport to provide insurance cov erage to Michigan residents. The trial court held that Integon wa s required to pay no-fault bene fits under MCL 500.3012, which provides in relevant part as follows:

Such a liability insurance polic y issued in violation of secti ons 3004 through 3012 [of the no-fault act] shall, nevertheless, be held valid but be deemed to include the provisions required by such sections, and when a ny provision in such policy or rider is in conflict with the provisions require d to be contained by such sections, the rights, duties and obligations of the insure d, the policyholder and the injured person shall be governed by the provisions of s uch sections.

In Farm Bureau Ins Co v Allstate Ins Co , 233 Mich App 38, 41; 592 NW2d 395 (1998) this Court explained that, “it is evident that the basic purpos e of [MCL 500.3012] is to treat an insurance policy that an insurer issues purporting to be a Michigan policy that complies with Michigan law as such even if the written terms of the policy are inconsiste nt with Michigan law” (emphasis in original). However, an out-of-state insurer is no t required to provide Michigan nofault coverage if the policy is issued to a person “who provide s no indication to the insurer of being a Michigan resident.” Id. at 42-43. If the out-of-state insurer does not know and has n o reason to know it is dealing with a Michigan resident, its poli cy will not be construed to contain the missing provisions of the no-fault act. See id. at 41-44.

In Farm Bureau , Allstate issued an Indiana au tomobile insurance policy to a p erson who used an Indiana address, although she was a domiciliary of Mich igan. Id . at 40. This Court held that Allstate was not required to provide no-fault benefits und er the policy pursuant to MCL 500.3012 because “Allstate could not reasonably have been expec ted to have known when the policy was issued that its insured was actually a Michigan resi dence.” Id . at 43. The court noted that the insured used an Indiana address in connection with the transaction and there was no other evidence “from which one may reasonably determine that Al lstate should have known that she was a Michigan resident.” Id . at 41.

In this case, the trial court c oncluded that Integon knew that Laura and Terry relocated to Michigan because it im puted the knowledge t hat its agent Iovann a had about the relocation. This amounted to legal error. First, to determine that Iovanna knew about the relocation based on her deposition testimony, which was somewhat ambiguous, required th e trial court to weigh credibility and make factual determinations, which is inappropr iate at the summary disposition stage. See Skinner v Square D Co , 445 Mich 153, 161; 516 NW2d 475 (1994) (a trial court may not make factual findings or weigh credibility in deciding a mo tion for summary disposition). Second, irrespective of whether I ovanna knew that Laura and Ter ry relocated to Michigan, because Iovanna did not acquire that knowledge while acting wit hin the scope of her agency relationship with Integon, her knowledge could not be imputed t o Integon. Specifically, this Court has explained the doctrine of imputed knowledge as follow s:
The doctrine of imputed know ledge generally provides:-6- When a person representing a corporation is doing a thing which is in connection with and pertinent to that part of the corpor ation business which he is employed, or authorized or selected to do , then that which is learned or done by that person pursuant thereto is in the knowledge of the corpora tion. The knowledge possessed by a corporation about a particular thing i s the sum total of all the knowledge which its officers and agents, who are author ized and charged with the doing of the p articular thing[,] [acquire] while acting under and within the scope of their authority . [ New Properties, Inc v George D Newpower
, Jr.
, Inc. , 282 Mich App 120, 134; 762 NW2d 178 (2009) (quotation marks a nd footnotes omitted) (emphasis added).]

Here, even assuming as the trial court did that Iovanna was an agent of Integon as opposed to an agent of the insured, 1 Iovanna did not acquire any knowledge about Laura and Terry’s possible relocation to M ichigan while she was “acting u nder and within the scope of [her] authority” as a licensed insurance agent of Integon. Id . Iovanna testified that she had a “side relationship,” with Laura a nd it was during the course of this “side relationship” that Iovanna acquired her knowledge a bout Laura and Terry’s potentia l relocation to Michigan. Specifically, Iovanna testified that Laura stopped by her resid ence one evening apparently in September 2011, shortly after Iovanna’s spouse passed away. Ac cording to Iovanna, it was during this personal visit that Laura first mentioned looking f or a job in Michigan. Iovanna also testified that she later visited the bank where Laura worked on e day and Laura again referenced looking for a job in Michigan. Thus, Iovanna did not acquire t he requisite knowledge of Laura and Terry’s potential move when she was “doing a thing which is in connection with and pertinent to that part of the corporation business which [she w as] employed, or authorized or selected to do. . . .” Id . Because Auto-Owners failed to present any other evidence to show that Iovanna acquired knowledge about the potential relocation while she was acting within the scope of her agency relationship with Integon, the trial court erred as a matter of law in imputing her knowledge to Integon. Id

. Aside, from Iovanna’s private c onversations with Laura, there was no evidence to support that Integon knew or reasonably should have known that Laura an d Terry relocated to Michigan during the time that the North Carolina policy was in effect. Evidence that the Toyota was registered in Michigan and evidence that both drivers had Michi gan drivers licenses showed that Laura and Terry had connections to Michigan. However, in apply ing for the insurance policy, Laura and Terry represented that the vehicles would be garaged in North Carolina, they provided a North Carolina residential address, and then revised that add ress when they moved to another locality in North Carolina. Laura and Terry continually renewe d, albeit belatedly, the policy from April 2009 through October 2011 without indicating to the Wagoner Agency or Integon that they had relocated to Michigan or that the vehicles were g araged anywhere other than North Carolina. See Hammoud v Metropolitan Prop & Cas Ins Co , 222 Mich App 485, 489; 563 NW2d 716 (1997) (“an insurer does not owe a duty to the insured to investigate or verify that individual’s representations or to discover intentional materia l misrepresentations.”).

1 We make no determination regardi ng whether the trial court err ed in its choice of law analysis.-7- Iovanna and Dowell both testified that Integon sent payment co upons to Laura and Terry’s North Carolina address that contained spaces to inform the company that they had changed addresses. However, the re was no evidence to show thatLaura and Terry ever filled out one of the coupons or otherwise informed the Wagoner Agency or Integon that they had relocated to Michigan. Instead, Laura and Terry renewed their North Carolina policy in October 2011, by paying the renewal premium and in doing so they did no t update their address. On this record, based on the representations Laura and Terry made to th e Wagoner Agency and Integon, there was no issue of fact to s upport that Intego n could “reaso nable have been expected to have known [] that its insured” relocated to Michigan at any time wh en the policy was in effect or when it renewed in October 2011. Farm Bureau , 233 Mich App at 43. Accordingly, the trial court erred in denying Integon’s counter-motion for summary dis position pursuant to MCR 2.116(I)(2). 2

In sum, the trial court erred as a matter of law in imputing I ovanna’s knowledge to Integon and there were no other facts to support that Integon r easonably should have known that its insureds were residents of Michigan at the time the North C arolina policy was issued, renewed, or at any time that it was in effect. Accordingly, In tegon was not required to provide no-fault benefits under MCL 500.3012 and the trial court erred in granting Auto-Owners’ motion for summary disposition and in deny ing Integon’s counter-motionfor summary disposition.

Reversed and remanded for entry of judgment in favor of defend ant. Defendant having prevailed, may tax costs. MCR 7.219(A). We do not retain juri sdiction.

/s/ Stephen L. Borrello /s/ Joel P. Hoekstra /s/ Peter D. O’Connell

2 Given our resolution of this issue, we need not address whethe r the trial court erred in holding that Terry Dunn was a “named ins ured” under the North Carolina policy.