Case Name: MATE v. WOLVERINE MUTUAL INSURANCE COMPANY
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1998-12-01
Citations: 233 Mich. App. 14
Docket Number: Docket No. 201125
Parties: MATE v WOLVERINE MUTUAL INSURANCE COMPANY
Judges: Before: Markey, P.J., and Griffin and Whttbeck, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 233
Pages: 14–37

Head Matter:
MATE v WOLVERINE MUTUAL INSURANCE COMPANY
Docket No. 201125.
Submitted March 11, 1998, at Grand Rapids.
Decided December 1, 1998, at 9:05 A.M.
Leave to appeal sought.
Jeanette Mate, individually and as personal representative of the estate of Shane Mate, deceased, brought an action in the Kent Circuit Court against Wolverine Mutual Insurance Company, Buiten, Tamblin, Steensma & Associates, Inc., and Paul Buiten, seeking underinsurance motorist benefits under an automobile insurance policy written by Wolverine and sold by the Buiten agency and agent Paul Buiten. At the time of the accident, Shane was eighteen years old and resided with his mother, Jeanette. Jeanette had been divorced from James Mate three years earlier, and they lived in separate households. James is neither the father nor a relative of Shane. At the time of the accident, Jeanette owned an automobile insured by Wolverine. However, the sole named insured of the policy was James Mate. The underinsurance motorist provision extended coverage only to the named insured, the insured’s spouse if a resident of the same household, and any family member. Family member was defined as “a person related to you [the named insured or a spouse if a resident of the same household] by blood, marriage, or adoption who is a resident of your household.” The court, Dennis B. Leiber, J., granted summary disposition in favor of the defendants. Jeanette Mate, as personal representative of the estate of Shane Mate, deceased, appealed.
The Court of Appeals held:
1. The plaintiffs claim of breach of contract is without merit. The policy did not by its terms provide underinsurance coverage to Shane because he was not a named insured, was not related to James Mate, and was not a resident of James Mate’s household.
2. The court properly found that the Buiten agency and Paul Buiten were not acting as agents of Wolverine.
3. The court properly granted Wolverine’s motion for summary disposition regarding the plaintiffs assertion of equitable estoppel. Neither Wolverine nor Buiten intentionally or negligently induced Shane to believe that he would be insured under the policy for underinsurance benefits. It was Jeanette Mate’s failure to notify Buiten that Shane was living in her household that resulted in Shane’s lack of underinsurance coverage. Buiten had no obligation to advise Shane regarding the adequacy of his coverage, and his silence with regard to such adequacy cannot constitute the culpable negligence or intentional act required for equitable estoppel.
4. The court properly granted Buiten’s motion for summary disposition with regard to the plaintiff’s negligence claim alleging professional malpractice. The plaintiff failed to support the claim that a special relationship existed between Buiten and Shane.
5. The corut properly denied the plaintiff’s request for reformation of the insurance contract. Shane was not a party to the insurance contract, and the plaintiff did not allege fraud or mutual mistake but, rather, alleged Buiten was obligated to inform Shane of his need for underinsurance coverage.
6. The plaintiff in her status as personal representative of Shane’s estate has no standing to assert the tort claims. Absent a duty, assumed or otherwise, the defendants owed no obligation to the plaintiff in her status as personal representative. Here, no duty running to the plaintiff in her status as personal representative was alleged.
Affirmed.
Markey, P.J., dissenting in part, stated that the matter should be reversed and remanded for further proceedings. Genuine issues of material fact exist with regard to the claims alleging breach of contract, that the Buiten agency was Wolverine’s agent, equitable estoppel, and professional malpractice resulting from a breach of a duty of care arising from a special relationship between Jeanette Mate and the Buiten agency.
1. Insurance — Automobiles — Underinsurance Protection.
The scope, coverage, and limitations of underinsurance automobile insurance protection, which is optional insurance not required by law, are governed by the insurance contract and the law pertaining to contracts.
2. Insurance — Agency — Independent Agents.
An independent insurance agent or broker ordinarily is an agent of the insured, not the insurer; testimony by an independent insurance agent or broker that the agent or broker has the power to place insurance with various insurance companies is usually sufficient to establish that the independent agent or broker is the agent of the insured, not the insurer.
3. Estoppel — Equitable Estoppel.
Equitable estoppel arises only when a person by acts, representations, or admissions, or by silence when the person ought to speak out, intentionally or through culpable negligence, induces another person to believe certain facts to exist and such other person rightfully relies and acts on such belief, so that the latter person will be prejudiced if the former is permitted to deny the existence of such facts.
4. Insurance — Adequacy of Policy’s Coverage.
An insurance agent generally does not have an affirmative duty to advise a client regarding the adequacy of a policy’s coverage; the insured is obligated to read the policy and raise questions concerning coverage within a reasonable time after issuance.
5. Insurance — Adequacy of Policy’s Coverage — Special Relationships.
Something more than the standard policyholder-insurer relationship is required in order to create a question of fact regarding the existence of a special relationship obligating the insurer to advise the policyholder about the policyholder’s insurance coverage; there must be a longstanding relationship in which there is some type of interaction regarding a question of coverage, with the insured relying on the expertise of the insurance agent to the insured’s detriment.
6. Contracts — Reformation — Nonparues.
Courts will reform a contract to reflect the parties’ actual intent where there is clear evidence that both parties reached an agreement, but, as a result of mutual mistake, or mistake on one side and fraud on the other, the contract does not express the true intent of the parties; a person who was not a party to the contract cannot obtain reformation of the contract.
Smith, Haughey, Rice & Roegge (by Lance R. Mather and Robert K. Pike), for the plaintiff.
Gruel, Mills, Nims & Pylman, LLP (by Scott R. Melton), for Wolverine Mutual Insurance Company.
Sullivan, Ward, Bone, Tyler & Asher, P.C. (by Michelle A. Thomas), for Buiten, Tamblin, Steensma & Associates, Inc., and Paul Buiten.
Before: Markey, P.J., and Griffin and Whttbeck, JJ.

Opinion:
Griffin, J.
Plaintiff Jeanette Mate, as personal representative of the estate of Shane Mate, deceased, appeals as of right orders granting summary disposition in favor of defendants. Although Jeanette Mate (now Jeanette Hylarides) in her individual capacity was a party plaintiff in the lower court and filed a claim of appeal, Jeanette Mate, individually, has not filed a brief with this Court and therefore has abandoned any individual claims. MCR 7.216(A)(10). MCR 7.212(C)(5). Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959). We affirm.
i
The following are facts not in dispute. Shane Mate was killed in a motor vehicle accident on October 17, 1992. At the time of the tragic mishap, Shane Mate was an adult, eighteen years old, residing with his mother, Jeanette Mate. James Mate is Jeanette Mate's ex-husband and, despite the similarity of last names, is neither the father nor a relative of Shane Mate. Further, at the time of the accident, Jeanette Mate and her ex-husband James Mate resided in separate households.
On October 17, 1992, Jeanette Mate owned a 1985 Chrysler LeBaron automobile that was insured by defendant Wolverine Mutual Insurance Company (Wolverine). However, the sole named insured of the policy was James Mate, who was divorced from Jeanette in 1989.
Plaintiff personal representative brought the present complaint against defendants seeking underinsurance motorist benefits under the automobile insurance policy written by defendant Wolverine and sold by defendants Buiten, Tamblin, Steensma & Associates, Inc., and agent Paul Buiten (collectively Buiten). The lower court granted summary disposition in favor of defendants Wolverine and Buiten pursuant to MCR 2.116(C)(10).
n
STANDARD OF REVIEW
A motion for summary disposition brought pursuant to MCR 2.116(C)(10) tests the factual support for a claim. Panich v Iron Wood Products Corp, 179 Mich App 136, 139; 445 NW2d 795 (1989). In Quinto v Cross & Peters Co, 451 Mich 358, 362-363; 547 NW2d 314 (1996), our Supreme Court set forth the following standards for deciding such a motion:
In reviewing a motion for summary disposition brought under MCR 2.116(C)(10), a trial court considers affidavits, pleadings, depositions, admissions, and documentary evidence filed in the action or submitted by the parties, MCR 2.116(G)(5), in the light most favorable to the party opposing the motion. A trial court may grant a motion for summary disposition under MCR 2.116(C)(10) if the affidavits or other documentary evidence show that there is no genuine issue in respect to any material fact, and the moving party is entitled to judgment as a matter of law. MCR 2.116(C)(10), (G)(4).
In presenting a motion for summary disposition, the moving party has the initial burden of supporting its position by affidavits, depositions, admissions, or other documentary evidence. Neubacher v Globe Furniture Rentals, 205 Mich App 418, 420; 522 NW2d 335 (1994). The burden then shifts to the opposing party to establish that a genuine issue of disputed fact exists. Id. Where the burden of proof at trial on a dispositive issue rests on a nonmoving party, the non-moving party may not rely on mere allegations or denials in pleadings, but must go beyond the pleadings to set forth specific facts showing that a genuine issue of material fact exists. McCart v J Walter Thompson, 437 Mich 109, 115; 469 NW2d 284 (1991). If the opposing party fails to present documentary evidence establishing the existence of a material factual dispute, the motion is properly granted. McCormic v Auto Club Ins Ass'n, 202 Mich App 233, 237; 507 NW2d 741 (1993).
On appeal, we review de novo the lower court's decision whether to grant or deny summary disposition. Pinckney Community Schools v Continental Casualty Co, 213 Mich App 521, 525; 540 NW2d 748 (1995).
in
BREACH OF CONTRACT
Underinsurance automobile insurance protection is not required by law and therefore is optional insurance offered by some, but not all, Michigan automobile insurance companies. Because such insurance is not mandated by statute, the scope, coverage, and limitations of underinsurance protection are governed by the insurance contract and the law pertaining to contracts. Auto-Owners Ins Co v Leefers, 203 Mich App 5, 10-11; 512 NW2d 324 (1993). As the Supreme Court stated in Rohlman v Hawkeye-Security Ins Co, 442 Mich 520, 524-525; 502 NW2d 310 (1993), regarding substantially similar uninsured motorists benefits:
Pip [personal protection insurance] benefits are mandated by statute under the no-fault act, MCL 500.3105; MSA 24.13105, and, therefore, the statute is the "rule book" for deciding the issues involved in questions regarding awarding those benefits. On the other hand, the insurance policy itself, which is the contract between the insurer and the insured, controls the interpretation of its own provisions providing benefits not required by statute. Therefore, because uninsured motorist benefits are not required by statute, interpretation of the policy dictates under what circumstances those benefits will be awarded.
First, we conclude that plaintiff's claim of a breach of the insurance contract is without merit. It is clear that the Wolverine policy of automobile insurance did not by its terms provide underinsurance coverage to Shane Mate. The underinsurance motorist provision at issue extends coverage under the policy only to "the named insured, his spouse if a resident of the same household and any family member." Family member is defined in the policy as
a person related to you [the named insured or a spouse if a resident of the same household] by blood, marriage or adoption who is a resident of your household. [Emphasis added.]
Shane Mate was neither a named insured in the policy nor was he related to James Mate or a resident of James Mate's household. Accordingly, the lower court correctly granted summary disposition in regard to plaintiff's breach of contract claim.
rv
AGENCY
Next, plaintiff claims that a genuine issue of material fact exists regarding whether Buiten was an agent of Wolverine. We disagree.
"Ordinarily, an independent insurance agent or broker is an agent of the insured, not the insurer." Harwood v Auto-Owners Ins Co, 211 Mich App 249, 254; 535 NW2d 207 (1995); accord Mayer v Auto-Owners Ins Co, 127 Mich App 23, 26; 338 NW2d 407 (1983). In Harwood, supra at 254, we stated:
As did the insurance agent in Mayer, Thomas Barron, an independent agent who worked for the Roscommon Agency and who sold the subject policy to Russell, testified that he was an independent insurance agent and had the power to place insurance with various insurance companies. Pursuant to Mayer, supra, defendant Roscommon Agency was the agent of plaintiff, not of defendant Auto-Owners. Because there is no question of material fact that defendant Roscommon Agency was not the agent of defendant Auto-Owners, the trial court properly granted defendant's motion for summary disposition.
Like the insurance agents in Mayer and Harwood, Paul Buiten testified that Buiten & Associates is an independent insurance agency with the power to place insurance with various insurance companies, including Wolverine. Such testimony is usually sufficient to establish that an independent insurance agent is the agent of the insured, not the insurer. Plaintiff relies on Paul Buiten's deposition testimony to the effect that Buiten considers the insureds to be his "clients." However, our review of Paul Buiten's testimony in context reveals that in responding to plaintiff's question regarding whether Buiten & Associates was acting as Wolverine's agent, Paul Buiten testified that he was not Wolverine's agent but rather "the insureds are our clients." Viewing the facts in a light most favorable to plaintiff, there is no genuine issue of material fact regarding Buiten's status as an agent. The lower court properly found that Buiten was not acting as the agent of Wolverine.
v
ESTOPPEL
Next, plaintiff contends that the trial court erred in granting defendant Wolverine's motion for summary disposition because a genuine issue of material fact allegedly exists regarding whether Wolverine is estopped from disclaiming coverage for plaintiff's claim.
In certain circumstances, estoppel may operate to hold a defendant insurer, agent, or broker liable for coverage that differs from the express terms of the contract. Parmet Homes, Inc v Republic Ins Co, 111 Mich App 140, 148; 314 NW2d 453 (1981). Equitable estoppel arises only " ' "when one by his acts, representations, or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts." ' " Lichon v American Universal Ins Co, 435 Mich 408, 415; 459 NW2d 288 (1990) (citations omitted).
Plaintiff argues that Buiten's silence regarding the fact that Shane Mate was not "fully covered" under the automobile insurance policy satisfies the first element of equitable estoppel. Plaintiff has presented no evidence that either Buiten or Wolverine intentionally or negligently induced Shane Mate to believe that he would be insured under the policy for underinsurance benefits. Although the record reveals that both Buiten and Wolverine were aware that Jeanette and James Mate were living at separate addresses, plaintiff presented no evidence that defendants were aware of Shane Mate's presence in either household. Jeanette Mate testified that she had not inquired regarding the type of coverage Shane would receive but merely assumed that he would be "covered" under the policy.
"Generally, an insurance agent does not have an affirmative duty to advise a client regarding the adequacy of a policy's coverage." Bruner v League General Ins Co, 164 Mich App 28, 31; 416 NW2d 318 (1987). "Instead, the insured is obligated to read the policy and raise questions concerning coverage within a reasonable time after issuance." Id. Therefore, it was Jeanette Mate's failure to notify Buiten that Shane was living in her household that resulted in Shane's lack of underinsurance coverage. Because Buiten was under no obligation to advise Shane Mate regarding the adequacy of his coverage, Buiten's silence with regard to such adequacy cannot constitute the culpable negligence or intentional act required for equitable estoppel. Therefore, the trial court properly granted Wolverine's motion for summary disposition regarding plaintiff's assertion of equitable estoppel.
VI
NEGLIGENCE — PROFESSIONAL MALPRACTICE
Plaintiff personal representative also argues that a genuine issue of material fact exists regarding the existence of a special relationship between Shane Mate and Buiten. We disagree. In Bruner, supra at 34, we stated the following test for a special relationship:
While it is perhaps difficult to derive any absolute rule of law from these cases, it is apparent that something more than the standard policyholder-insurer relationship is required in order to create a question of fact as to the existence of a "special relationship" obligating the insurer to advise the policyholder about his or her insurance coverage. There must be, in a long-standing relationship, some type of interaction on a question of coverage, with the insured relying on the expertise of the insurance agent to the insured's detriment.
Here, no relationship of any kind existed between Shane Mate and Buiten. The record lacks any evidence that Buiten advised Shane in any way regarding the adequacy of his insurance coverage. In fact, Paul Buiten testified that he was unaware that Shane even existed. Because plaintiff personal representative has failed to sustain her burden of submitting evidence in support of her claim of a special relationship between Shane and Buiten, the trial court correctly granted summary disposition in favor of defendant Buiten. MCR 2.116(G)(4).
vn
REFORMATION OF CONTRACT
Finally, plaintiff personal representative contends that a genuine issue of material fact exists concerning reformation of the insurance policy on which plaintiff bases her claims.
"Courts will reform an instrument to reflect the parties' actual intent where there is clear evidence that both parties reached an agreement, but as the result of mutual mistake, or mistake on one side and fraud on the other, the instrument does not express the true intent of the parties." Olsen v Porter, 213 Mich App 25, 29; 539 NW2d 523 (1995); see also Harwood, supra at 253-254. Plaintiff personal representative alleges neither fraud nor mutual mistake by Buiten, but, rather, claims that Buiten was obligated to inform Shane Mate of his need for underinsurance coverage. Because Shane Mate was not a party to the insurance contract, plaintiff cannot obtain reformation of the contract. Id. at 254. In addition, because plaintiff has not alleged fraud or mutual mistake in the insurance contract, the trial court properly denied plaintiffs request to reform the insurance contract.
vm
THE DISSENT
This is a contract case with related claims of equitable estoppel, professional malpractice, and contract reformation. The present case does not involve statutorily required no-fault first-party benefits or residual liability insurance, but, rather, optional contractually based underinsurance benefits. The dissent mistakenly believes that "the problem here is not one of 'adequate coverage' " but rather no insurance coverage at all. Post at 34. The dissent writes "Jeanette Mate had no knowledge that, in reality, neither she nor her son, as her resident relative, had any no-fault coverage at all because of the Buiten agency's placing her vehicle under James Mate's policy." Post at 34-35. First, as permissive drivers, not specifically excluded, both Jeanette Mate and Shane Mate would be insured under the policy for residual tort liability, MCL 500.3131; MSA 24.13131, MCL 257.520(2); MSA 9.2220(2). See, generally, Citizens Ins Co of America v Federated Mut Ins Co, 448 Mich 225; 531 NW2d 138 (1995). Further, under the first-party priority scheme, both would be insured for pip benefits if injured while occupying the vehicle. MCL 500.3114(4)(a); MSA 24.13114(4)(a). Because Shane Mate's death arose out of the use and operation of a motor vehicle, we assume that all applicable no-fault benefits have been paid to his estate by the insurance carrier with priority. See, generally, MCL 500.3114; MSA 24.13114. The dissent fails to recognize the important legal distinction between an insured under the policy and a "named insured." See, generally, Transamerica Ins Corp of America v Hastings Mut Ins Co, 185 Mich App 249; 460 NW2d 291 (1990). As indicated above, persons who are not "named insureds" under a contract of insurance may nonetheless be insured for defined risks.
Our dissenting colleague writes as if Jeanette Mate, individually, were the plaintiff. She is not. The plaintiff is Jeanette Mate, as personal representative of the estate of Shane Mate, deceased, not Jeanette Mate 'individually. Although the dissent's position on the issues of agency and estoppel is contrary to established Michigan law, the more fundamental error of the dissent is a misunderstanding that plaintiff personal representative has no standing to assert the tort claims. Absent a duty, assumed or otherwise, defendants owed no obligation to plaintiff personal representative. See, generally, Panich, supra. Here, no duty to plaintiff personal representative is alleged.
In conclusion, we have not "bizzarely twisted both the facts of this case and their application to the pertinent law," as alleged by the dissent. Post at 34. Rather, we have applied the established law to the facts, parties, and claims.
Affirmed.
Whitbeck, J., concurred.
It is unclear whether James Mate possessed an insurable interest in the vehicle. Nevertheless, this issue is waived because it was not raised in the lower court or on appeal.
We disagree with plaintiff's underlying premise that automobile insurance without optional underinsurance protection is "inadequate coverage."