Case Name: LICHON v. AMERICAN UNIVERSAL INSURANCE COMPANY
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1988-11-21
Citations: 173 Mich. App. 178
Docket Number: Docket No. 104078
Parties: LICHON v AMERICAN UNIVERSAL INSURANCE COMPANY
Judges: Before: Danhof, C.J., and Sawyer and D. R. Freeman, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 173
Pages: 178–187

Head Matter:
LICHON v AMERICAN UNIVERSAL INSURANCE COMPANY
Docket No. 104078.
Submitted June 9, 1988, at Lansing.
Decided November 21, 1988.
Leave to appeal applied for.
Defendant, American Universal Insurance Company, insured a party store owned by plaintiff, Dennis S. Lichon. The policy contained a clause which excluded coverage for losses occurring "while the hazard is increased by any means within the control or knowledge of the insured.” Two fires damaged the party store and plaintiff filed a claim for his losses. Defendant refused to pay the claim. Plaintiff then brought an action in the Saginaw Circuit Court alleging that defendant wrongfully refused to pay the claim. Defendant moved for summary disposition based on plaintiff’s conviction, following a plea of nolo contendere in a separate criminal action, to attempted burning of real property (the party store). The trial court, Leopold P. Borrello, J., granted defendant’s motion. Plaintiff appealed.
The Court of Appeals held:
1. MRE 410 precludes the admission of evidence of a nolo contendere plea in proceedings which are brought against the person who made the plea, but not in proceedings which are brought by that person.
2. Michigan follows the majority position which differentiates between allowing the collateral use of the plea of nolo contendere as an admission of misconduct and allowing the collateral use of the fact of conviction and finds a conviction imposed after a plea of nolo contendere as conclusive as a conviction entered after a plea of guilty or entered after a plea of not guilty and a trial.
Affirmed.
Sawyer, J., dissented. He would not allow the use of evidence of plaintiff’s nolo contendere plea to support the grant of defendant’s motion for summary disposition. He would require defendant to establish the fact of arson at trial.
References
Am Jur 2d, Evidence §§ 701, 702.
Plea of nolo contendere or non vult contendere. 89 ALR2d 540. See the Index to Annotations under Nolo Contendere.
1. Evidence — Nolo Contendere Pleas.
Evidence of a nolo contendere plea made in criminal proceedings may not be admitted in civil proceedings thereafter brought against the person who made the plea; such evidence may be admitted in civil proceedings brought by the person who made the plea (MRE 410).
2. Evidence — Nolo Contendere Pleas.
The Michigan Supreme Court has adopted the majority position which differentiates between allowing the collateral use of a plea of nolo contendere as an admission of misconduct and allowing the collateral use of the fact of conviction and finds a conviction imposed after a plea of nolo contendere as conclusive as a conviction entered after a plea of guilty or after a plea of not guilty and a trial.
Joseph J. Trogan, for plaintiff.
Braun, Kendrick, Finkbeiner, Schafer & Murphy (by Gregory E. Meter and Scott C. Strattard), for defendant.
Before: Danhof, C.J., and Sawyer and D. R. Freeman, JJ.
Circuit judge, sitting on the Court of Appeals by assignment.

Opinion:
Danhof, C.J.
Plaintiff appeals as of right from a Saginaw Circuit Court opinion and judgment which granted defendant's motion for summary disposition. MCR 2.116(C)(10). We affirm.
Defendant issued an insurance policy which covered plaintiff's party store. The policy contained a clause which excluded coverage for losses occurring "while the hazard is increased by any means within the control or knowledge of the insured." Two fires damaged plaintiff's party store. Plaintiff filed a claim for his losses. Plaintiff sued defendant when defendant refused to pay the claim.
Criminal charges arising from the fires were brought against plaintiff. Plaintiff pled nolo contendere to attempted burning of real property, MCL 750.73; MSA 28.268 and MCL 750.92; MSA 28.287. Plaintiff's plea was accepted and he was sentenced to one year in the county jail. Defendant moved for summary disposition based on plaintiff's plea-based conviction. The lower court granted defendant's motion. Plaintiff claims that the lower court erred in granting the motion.
A motion for summary disposition under MCR 2.116(C)(10) tests the factual sufficiency of the plaintiff's claim. The trial court must consider the entire record and give the nonmoving party the benefit of every reasonable doubt in determining whether there is a genuine issue of material fact. Aetna Casualty & Surety Co v Sprague, 163 Mich App 650, 653; 415 NW2d 230 (1987). The motion must not be granted unless it is impossible to support the claim at trial because of some deficiency which cannot be overcome. Michigan National Bank — Oakland v Wheeling; 165 Mich App 738, 743-744; 419 NW2d 746 (1988).
Plaintiff relies, in part, on MRE 410, which provides that evidence of a nolo contendere plea is not admissible in any civil or criminal proceeding against the person who made the plea. This provision could be interpreted to make evidence of a nolo contendere plea inadmissible against the person who made the plea in any proceeding by or against the person. One of the reasons for pleading nolo contendere is to minimize repercussions such as civil litigation. See Guilty Plea Cases, 395 Mich 96, 134; 235 NW2d 132 (1975), cert den 429 US 1108; 97 S Ct 1142; 51 L Ed 2d 561 (1977). However, this interpretation goes too far by allowing the use of a nolo contendere plea not only as a shield, but as a sword. We favor an interpretation of MRE 410 which would preclude the admission of evidence of a nolo contendere plea in proceedings which are brought against the person who made the plea, but not in proceedings which are brought by that person.
The lower court granted defendant's MCR 2.116(0(10) motion based on plaintiffs conviction. In a case concerning attorney discipline proceedings, State Bar Grievance Administrator v Lewis, 389 Mich 668; 209 NW2d 203 (1973), our Supreme Court adopted the majority position which differentiates between allowing the collateral use of a nolo contendere plea as an admission of misconduct and allowing the collateral use of the fact of a conviction. This position preserves the benefits of the nolo contendere plea to a defendant who fears subsequent civil liability based upon an admission of guilt to a criminal charge. At the same time, however, the majority position looks to the conviction and sentence imposed by the court after the plea and finds the conviction as conclusive as a conviction entered after a plea of guilty or entered after a plea of not guilty and a trial. There is no compelling reason to differentiate between a conviction entered after a nolo contendere plea and a conviction entered after any other plea. Lewis, supra, pp 680-681. This Court adopted Lewis' reasoning in a termination of parental rights case, and rejected the respondent's MRE 410 challenge to the admissibility of evidence of his conviction which was based on a nolo contendere plea. In re Andino, 163 Mich App 764; 415 NW2d 306 (1987).
An insurance company can deny coverage based on the insured's criminal conduct. Sprague, supra; State Farm Fire & Casualty Co v Groshek, 161 Mich App 703; 411 NW2d 480 (1987); Transamerica Ins Co v Anderson, 159 Mich App 441; 407 NW2d 27 (1987); Yother v McCrimmon, 147 Mich App 130; 383 NW2d 126 (1985); State Farm Fire & Casualty Co v Jenkins, 147 Mich App 462; 382 NW2d 796 (1985).
Defendant was convicted of attempted burning of real property. This conviction established defendant's violation of his insurance policy's exclusionary clause and bars his recovery for the damage which he caused. Sprague, supra, pp 654-655. It would be contrary to public policy and a mockery of justice to allow a convicted felon to profit from his crime. Imperial Kosher Catering, Inc v The Travelers Indemnity Co, 73 Mich App 543, 545-546; 252 NW2d 509 (1977).
Affirmed.
D. R. Freeman, J., concurred.