Case Name: HENDERSON v. STATE FARM FIRE AND CASUALTY COMPANY
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1999-07-08
Citations: 460 Mich. 348
Docket Number: Docket No. 110822
Parties: HENDERSON v STATE FARM FIRE AND CASUALTY COMPANY
Judges: Weaver, C.J., and Brickley, Corrigan, and Young, JJ., concurred with Taylor, J.
Reporter: Michigan Reports
Volume: 460
Pages: 348–371

Head Matter:
HENDERSON v STATE FARM FIRE AND CASUALTY COMPANY
Docket No. 110822.
Argued March 10, 1999
(Calendar No. 10).
Decided July 8, 1999.
Daniel Henderson brought an action in the Macomb Circuit Court against Travis Twitchell and Dawn Mysierowicz for damages arising from injuries suffered while visiting the Twitchell home, where Mysierowicz was staying temporarily. State Farm Fire and Casualty Company defended Twitchell under a homeowner’s policy, but declined to provide a defense for Mysierowicz on the basis that she was not an insured within the meaning of the policy. Henderson obtained a default judgment of $75,000 against Mysierowicz. In consideration of a promise by Henderson not to proceed against her personal assets, Mysierowicz assigned all rights, benefits, and claims she had against State Farm to Henderson. Henderson subsequently filed a complaint, as Mysierowicz’ assignee, against State Farm, alleging that it had breached its obligations when it did not defend and provide coverage to Mysierowicz under the Twitchell homeowner’s policy, and that he was entitled to a judgment of $75,000 against State Farm. State Farm denied liability on the basis that Mysierowicz was not an “insured” as the term was defined in the insurance policy. The court, Mary A. Chrzanowski, J., granted summary disposition for State Farm, explaining that, although Mysierowicz resided with the Twitchell’s, she was not in the care of the insureds. The Court of Appeals, Markey, P.J., and Jansen and White, JJ., reversed in an opinion per curiam, finding the phrase “in the care of” in the policy to be ambiguous and ordered summary disposition for the plaintiff. 225 Mich App 703 (1997) (Docket No. 188579). State Farms appeals.
In an opinion by Justice Taylor, joined by Chief Justice Weaver, and Justices Brickley, Corrigan, and Young, the Supreme Court held:
A question of fact clearly exists that can only be resolved by a trier of fact. Neither party is entitled to judgment as a matter of law under MCR 2.116(C)(10).
1. The phrase “in the care of” is not ambiguous. It is a colloquial or idiomatic phrase that is peculiar to itself and readily understood as a phrase by speakers and readers of American English. Use of plain English in insurance policies and other legal instruments has been encouraged in recent years. When faced with plain English phrases in an insurance contract, any attempt to define each element or word of a phrase, as the Court of Appeals did, almost invariably will result in an inaccurate understanding of the phrase. The proper approach is to read the phrase as a whole, giving it its commonly used meaning. This requires a court to give contextual meaning to the phrase to determine what it conveys to those familiar with American English and its contemporary usage. The goal of the court in this endeavor is to construe the phrase so as to preserve the parties’ agreement.
2. In this case, both the trial court and the Court of Appeals erred. The trial court should not have granted summary disposition for State Farm when there was deposition testimony suggesting that Mysierowicz was “in the care of” Mrs. Twitchell at the time in question. The Court of Appeals likewise erred in concluding as a matter of law that Mysierowicz was “in the care of” Mrs. Twitchell at the time of the incident, given the evidence suggesting that she was not. Viewing all the facts in the light most favorable to the plaintiff forecloses a ruling, as a matter of law, that Mysierowicz was not “in the care of’ Mrs. Twitchell. Similarly, viewing all the facts in a light most favorable to State Farm forecloses a ruling as a matter of law that Mysierowicz was “in the care of” Mrs. Twitchell.
Reversed and remanded.
Justice Kelly, joined by Justice Cavanagh, dissenting, stated that the phrase “in the care of” is ambiguous, and the contract provision should be construed against the defendant, as its drafter. The plaintiff is entitled to judgment as a matter of law under MCR 2.116(C)(10) because there was no genuine issue of material fact. What the majority denominates an issue of fact is actually an issue of law that only a court should decide.
Sarvis & Herrmann, P.C. (by J. Steven Sarvis'), for plaintiff-appellee.
Draugelis & Ashton, L.L.P. (by Floyd C. Virant), for defendant-appellant.
Amici Curiae:
Charters, Heck, O’Donnell, Petrulis & Zorza, PC. (by Eric S. Goldstein), for Michigan Trial Lawyers Association.
Dykema, Gossett, P.L.L.C. (by Lori M. Silsbury), for Insurance Information Association of Michigan.

Opinion:
Taylor, J.
We granted leave to appeal in this case to review the Court of Appeals first impression construction of the phrase "in the care of" in a homeowner's insurance policy. The Court of Appeals determined that the phrase was ambiguous and that there was no genuine issue of material fact that Dawn Mysierowicz, plaintiff's assignor, came within the definition of an insured under defendant's insurance policy because she was "in the care of" the named insured. We find that the Court of Appeals erred in reaching this holding. Because we conclude that neither plaintiff nor defendant was entitled to summary disposition, we reverse and remand to the trial court for further proceedings.
BACKGROUND FACTS AND PROCEEDINGS BELOW
In early 1993, Mysierowicz' mother was in the process of divorcing her father and was unable to provide a home for her. Bonnie Twitchell, the mother of Mysierowicz' boyfriend Travis Twitchell, agreed that Mysierowicz could stay at the Twitchell home on a temporary basis. On June 19, 1993, plaintiff Daniel Henderson was visiting the Twitchell household. An altercation occurred with some strangers in front of the Twitchell home during which plaintiff was stabbed. Henderson subsequently filed a lawsuit alleging that Travis Twitchell and Mysierowicz had negligently provoked the strangers, resulting in his being injured.
The lawsuit was tendered to State Farm Fire and Casualty Company. State Farm assumed a defense for Travis Twitchell, but declined to provide a defense for Mysierowicz on the basis that she was not an "insured" within the meaning of the insurance policy. Plaintiff obtained a default judgment for $75,000 against Mysierowicz. In consideration of a promise by Henderson not to proceed against her personal assets, Mysierowicz assigned all rights, benefits and claims she had against State Farm to Henderson.
Henderson subsequently filed a complaint, as Mysierowicz' assignee, against State Farm alleging that it had breached its obligations when it did not defend and provide coverage to Mysierowicz under the Twitchell homeowner's policy. Plaintiff alleged that he was entitled to a judgment of $75,000 against defendant. State Farm filed an answer denying liability on the basis that Mysierowicz was not an "insured" as the term was defined in the insurance policy.
After depositions of Mysierowicz and the Twitchells were taken, plaintiff filed a motion for summary disposition under MCR 2.116(C)(9) (failure to state a valid defense) and MCR 2.116(C)(10) (no genuine issue of material fact). Plaintiff argued on the basis of deposition testimony that he filed with his motion that Mysierowicz fit within the definition of an "insured" in the insurance policy. Defendant responded by filing its own motion for summary disposition under MCR 2.116(C)(10). Defendant also cited and provided deposition testimony it said demonstrated that Mysierowicz was not an "insured" and that it had properly refused to defend or provide coverage in the earlier lawsuit.
The trial court denied plaintiffs motion and granted defendant's motion. The court explained:
This Court finds that Dawn Mysierowicz was at the age of 18, [a] legal adult suffering from no physical or mental disabilities. She resided with the Twitchelfls] and was not under the[ir] control, guidance, supervision, management or custody. As such it is clear to this Court that State Farm's policy of insurance did not provide coverage to her because she was not, "In the care of," the insureds. Thus, this Court finds no genuine issue as to any material fact.
Plaintiff filed a claim of appeal. After consulting dictionary definitions of the word "care" and some out-of-state cases, the Court of Appeals determined that "care" had many meanings and thus the phrase "in the care of" was ambiguous because it could also reasonably be understood to have different meanings. The Court ultimately reversed the order granting summary disposition for defendant and further found that there was no genuine issue of material fact that Mysierowicz came within the definition of "insured" because she was "in the care of" Bonnie Twitchell, the named insured under defendant's homeowner's policy. 225 Mich App 703; 572 NW2d 216 (1997). We subsequently granted defendant's application for leave to appeal. 459 Mich 880 (1998).
STANDARD OF REVIEW
We review the grant or denial of a motion for summary disposition de novo. Groncki v Detroit Edison Co, 453 Mich 644, 649; 557 NW2d 289 (1996). Further, the construction and interpretation of an insurance contract is a question of law for a court to determine that this Court likewise reviews de novo. Morley v Automobile Club of Michigan, 458 Mich 459, 465; 581 NW2d 237 (1998). Whether contract language is ambiguous is also a question of law which we review de novo. Port Huron Ed Ass'n v Port Huron Area School Dist, 452 Mich 309, 323; 550 NW2d 228 (1996). It is axiomatic that if a word or phrase is unambiguous and no reasonable person could differ with respect to application of the term or phrase to undisputed material facts, then the court should grant summary disposition to the proper party pursuant to MCR 2.116(C)(10). Moll v Abbott Laboratories, 444 Mich 1, 28, n 36; 506 NW2d 816 (1993). Conversely, if reasonable minds could disagree about the conclusions to be drawn from the facts, a question for the factfinder exists. Id.
PRINCIPLES UTILIZED IN INTERPRETING INSURANCE CONTRACTS
Initially, in reviewing an insurance policy dispute we must look to the language of the insurance policy and interpret the terms therein in accordance with Michigan's well-established principles of contract con struction. Arco Industries Corp v American Motorists Ins Co, 448 Mich 395, 402; 531 NW2d 168 (1995).
First, an insurance contract must be enforced in accordance with its terms. Upjohn Co v New Hampshire Ins Co, 438 Mich 197, 207; 476 NW2d 392 (1991). A court must not hold an insurance company liable for a risk that it did not assume. Auto-Owners Ins Co v Churchman, 440 Mich 560, 567; 489 NW2d 431 (1992). Second, a court should not create ambiguity in an insurance policy where the terms of the contract are clear and precise. Id. Thus, the terms of a contract must be enforced as written where there is no ambiguity. Stine v Continental Casualty Co, 419 Mich 89, 114; 349 NW2d 127 (1984).
While we construe the contract in favor of the insured if an ambiguity is found, Auto Club Ins Ass'n v DeLaGarza, 433 Mich 208, 214; 444 NW2d 803 (1989), 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 construction merely for the purpose of benefitting an insured. Upjohn Co, supra at 208, n 8. The fact that a policy does not define a relevant term does not render the policy ambiguous. Auto Club Group Ins Co v Marzonie, 447 Mich 624, 631; 527 NW2d 760 (1994). Rather, reviewing courts must interpret the terms of the contract in accordance with their commonly used meanings. Group Ins Co of Michigan v Czopek, 440 Mich 590, 596; 489 NW2d 444 (1992). Indeed, we do not ascribe ambiguity to words simply because dictionary publishers are obliged to define words differently to avoid possible plagiarism. Upjohn Co, supra at 209, n 8.
ANALYSIS
The Court of Appeals erred in concluding that the phrase "in the care of" was ambiguous. It is not. The Court of Appeals failed to recognize that this phrase is a colloquial or idiomatic phrase that is peculiar to itself and readily understood as a phrase by speakers and readers of our language.
An example of a court recognizing that parsing phrases word by word may lead to an inaccurate interpretation is informative. In Nat'l Security Archive v United States Dep't of Defense, 279 US App DC 308, 310; 880 F2d 1381 (1989), the United States Court of Appeals for the District of Columbia, in analyzing the phrase "educational institution," stated:
It is often the case that words, used in conjunction, convey a meaning different from that which they would bear if interpreted separately.[ ]
Utilization of plain English in insurance policies and other legal instruments has been on occasion required, but in all cases encouraged, in recent years. This change requires courts to utilize less rigid methods of inteipretation than the old densely written policies demand. With this in mind, when faced with plain English phrases in an insurance contract, any attempt to define each element, or word, of the phrase, as the Court of Appeals did, will almost invariably result in an inaccurate understanding of the phrase. Rather, the proper approach is to read the phrase as a whole, giving the phrase its commonly used meaning. Group Ins Co v Czopek, supra at 596. This requires a court to give contextual meaning to the phrase to determine what the phrase conveys to those familiar with our language and its contemporary usage. This approach is consistent with the parallel rule for statutory construction, which requires that all nontechnical words and phrases be defined according to the common and approved usage of the language. MCL 8.3a; MSA 2.212(1). Thus, when the meaning of a colloquial phrase is in dispute, the court must not mechanistically parse the meaning of each word in the phrase; instead, it must look to the contextual understanding and consider the phrase as a whole.
The tools available to a court in seeking to establish the meaning of such phrases include common understandings of which the court can take notice, as well as other sources such as specialized dictionaries or publications. Furthermore, it must not be forgotten that the goal of the court in this endeavor is to construe the phrase so as to preserve the parties' agreement.
While the meaning of the phrase "in the care of" is not ambiguous, this is not to say that application of the phrase to a given set of facts will always be easy. This is the case here. While the facts are not in dispute here, reasonable persons could disagree about the conclusions to which they lead. Said another way, individual factfinders could reasonably give different weight to the same facts, causing them to reach opposite conclusions regarding whether Mysierowicz was "in the care of" Mrs. Twitchell at the time of the stab bing. Thus, it was improper to grant summary disposition to either party in this case.
THE GENERAL MEANING OF THE PHRASE
Given that the contract does not define the phrase "in the care of," and because interpretation of an insurance contract is a question of law, it falls to us to provide some guidance regarding the meaning of the phrase. In our view, the following nonexclusive common-sense factors are relevant for the factfinder to consider in answering when someone is "in the care of" someone else:
(1) is there a legal responsibility to care for the person;
(2) is there some form of dependency;
(3) is there a supervisory or disciplinary responsibility;
(4) is the person providing the care providing substantial essential financial support;
(5) is the living arrangement temporary or permanent, including how long it has been in existence and is expected to continue;
(6) what is the age of the person alleged to be "in the care of" another (generally, the younger a person the more likely they are to be "in the care" of another);
(7) what is the physical or mental health status of the person alleged to be "in the care of" another (a person with health problems is more likely to be "in the care" of another); and
(8) is the person allegedly "in the care of" another gainfully employed (a person so employed is less likely to be truly dependent on another)?
FACTS OF RECORD SUGGESTING MYSIEROWICZ WAS "IN THE CARE" OF BONNIE TWITCHELL
The Court of Appeals relied on deposition testimony establishing the following in concluding there was no genuine issue of material fact that Mysierowicz was "in the care of" Bonnie Twitchell: (1) Mysierowicz paid no rent and contributed nothing in terms of the monthly mortgage payments, property taxes and utilities; (2) Mrs. Twitchell performed all household chores including meals when she was home; (3) Travis hoped that everyone regarded Mysierowicz as a member of the family and considered the three of them to be living as one family unit; (4) Mrs. Twitchell had assumed responsibility for Mysierowicz' well-being; (5) Mysierowicz was primarily dependent on Mrs. Twitchell for food and shelter; and (6) Mrs. Twitchell provided virtually total financial support for Mysierowicz.
FACTS OF RECORD SUGGESTING MYSIEROWICZ WAS NOT "IN THE CARE" OF BONNIE TWITCHELL
The Court of Appeals reached its conclusion that there was no genuine issue of material fact that Mysierowicz was "in the care of" Mrs. Twitchell, while acknowledging: (1) Mysierowicz was eighteen years old; (2) the living arrangement was temporary; (3) Mysierowicz was responsible for purchasing all her personal items, including toiletries and clothing and maintaining the car her parents had purchased for her; (4) Mysierowicz had a telephone in her own name in the Twitchell house; (5) Mysierowicz agreed to contribute $20 a week toward an average weekly grocery bill of $50; (6) neither Bonnie nor Travis Twitchell exercised any control over Mysierowicz' activities; (7) Mrs. Twitchell did not sign an agreement to take care of Mysierowicz nor did she consider herself responsible for Mysierowicz; and (8) Mysierowicz was free to come and go as she pleased, while providing for some of her own support.
Those factors cited by the Court of Appeals in support of its ruling, which are supported by the record, would allow a reasonable factfinder to conclude that Mysierowicz was "in the care of" Mrs. Twitchell at the time Henderson was stabbed. However, the eight other factors cited immediately above would similarly allow a reasonable factfinder to conclude that Mysierowicz was not "in the care of" Mrs. Twitchell at the time of the stabbing.
In our judgment, both the trial court and the Court of Appeals erred. The trial court should not have granted summary disposition to defendant because there was deposition testimony from which a reasonable person could conclude that Mysierowicz was "in the care of" Mrs. Twitchell at the time of the stabbing. The Court of Appeals likewise erred in concluding as a matter of law that Mysierowicz was "in the care of" Mrs. Twitchell at the time of the incident, because there was evidence from which a reasonable person could conclude that she was not.
conclusion
Each side cited deposition testimony supporting its position. Viewing all the facts in the light most favorable to plaintiff forecloses a ruling, as a matter of law, that Mysierowicz was not "in the care of" Mrs. Twitchell. Similarly, viewing all the facts in a light most favorable to defendant forecloses a ruling as a matter of law that Mysierowicz was "in the care of" Mrs. Twitchell. We are satisfied that a question of fact clearly exists in this case that can only be resolved by a trier of fact. Neither party is entitled to judgment as a matter of law under MCR 2.116(C)(10).
Reversed and remanded for further proceedings.
Weaver, C.J., and Brickley, Corrigan, and Young, JJ., concurred with Taylor, J.
The insurance policy contained the following definition of the word "insured":
4. "insured" means you and, if residents of your household: a. your relatives; and b. any other person under the age of 21 who is in the care of a person described above. [Emphasis added.]
Travis Twitchell was twenty years old and Mysierowicz was eighteen years old.
We reject Justice Kelly's claim that the phrase is ambiguous because both parties attach materially different meanings to the phrase and advocate different applications of the phrase. The fact that each party is advocating a definition that supports its desired outcome in a case of first impression does not make a phrase ambiguous. If this were the test, all terms and phrases would be rendered ambiguous.
The major flaw in the Court of Appeals approach, as will be discussed below, was failing to deal with the disputed phrase as a phrase.
Furthermore, even when one engages in a word-by-word analysis, such as the Court of Appeals did here, the mere fact that various dictionaries define the word "care" differently does not make the word "care" ambiguous. To so hold would make virtually any word ambiguous, thus derailing proper interpretation where word by word explication is called for. See our discussion of the proper understanding of the word "of" in Horace v City of Pontiac, 456 Mich 744, 755-756; 575 NW2d 762 (1998).
To nail down the point, the court wryly gave the phrase "monkey business" as an example of a phrase that had a different meaning than the sum of its constituent parts. Id. at 310-311, n 4.
The Legislature since 1990 has required basic insurance policies to be written in plain English. MCL 500.2236; MSA 24.12236. The legal profession has also taken a strong interest in having documents written in plain English. For example, the Michigan Bar Journal regularly publishes articles encouraging, and even giving awards regarding, the use of plain English in contracts, pleadings, and the like. Indeed, the Plain English Committee even has its own Web site. See www.michbar.org/committees/penglish/pengcom.html.
As stated in 2 Couch, Insurance, 3d, § 21:5, p 21-9:
The trend in the insurance industry is toward drafting policies using "plain English." As a result, many of the words and phrases that have created difficulty in interpretation and have required judicial intervention have been deleted or redefined, leaving the courts with new words and phrases to interpret.
For example, a glossary of idiomatic expressions could in a given case help one understand such sports metaphors as: (1) a "hail Mary pass," (2) a "hat trick," (3) "down for the count," or (4) even the venerable "home run."
For example, if a legal phrase of art such as "equitable remedies" is found in a contract, the phrase would be interpreted in accord with common-law understandings and case-law explanations that those familiar with such terms of art are held to understand.
See, e.g., Horace Mann Ins v Stark, 987 F Supp 562, 567 (WD Mich, 1997) (a "term is not rendered ambiguous merely because its meaning may vary according to the circumstances"); Gredig v Tennessee Farmers Mut Ins Co, 891 SW2d 909, 914 (Term App, 1994) ("the fact that words may be difficult to apply to a given factual situation does not make those words ambiguous").
Contrary to the dissent, Travis Twitchell's subjective hope is not evidence that Mysierowicz was "in the care of' Mrs. Twitchell.
However, Mrs. Twitchell denied being responsible for Mysierowicz "in any way."
Mysierowicz testified that she was not capable of completely supporting herself without assistance.
However, Mysierowicz was working full-time and paid the majority of her own living expenses. Hence, the record does not corroborate the dissent's reference to this unsupported assertion.
It is axiomatic that the trial court must give the benefit of all reasonable doubt to the nonmoving party when considering the motion. SSC Associates Ltd Partnership v Detroit General Retirement System, 192 Mich App 360, 364; 480 NW2d 275 (1991).
None of the out-of-state cases cited by the dissent persuade us that plaintiff is entitled to judgment as a matter of law.