Case Name: PROGRESSIVE MICHIGAN INSURANCE COMPANY v. SMITH
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 2010-03-16
Citations: 287 Mich. App. 537
Docket Number: Docket No. 287505
Parties: PROGRESSIVE MICHIGAN INSURANCE COMPANY v SMITH
Judges: Before: MARKEY, P.J., and BANDSTRA and MURRAY, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 287
Pages: 537–551

Head Matter:
PROGRESSIVE MICHIGAN INSURANCE COMPANY v SMITH
Docket No. 287505.
Submitted December 1, 2009, at Grand Rapids.
Decided March 16, 2010, at 9:05 a.m.
Progressive Michigan Insurance Company brought an action in the Kent Circuit Court, Dennis B. Leiber, J., against William Smith, Sheri Harris, and Scott and Andrea Mihelsic, seeking a declaration regarding its obligations under a motor vehicle insurance policy issued to Harris to indemnify Smith after a default judgment was entered against Smith in an action by the Mihelsics for injuries sustained in a motor vehicle accident that occurred when a truck driven by Smith crossed the centerline of the road and struck the Mihelsics’ vehicle. Smith had added his friend Harris to the title of the truck when he purchased it because he had a suspended driver’s license and was unable to obtain license plates and insurance. Harris obtained the insurance and Smith paid for it. A form signed by Harris listed Smith as an excluded driver and the declarations page of the policy and the certificate of insurance also listed Smith as an excluded driver. The trial court allowed Pioneer State Mutual Insurance Company to intervene as a defendant and granted Progressive’s motion for summary disposition that was based on the named driver exclusion. The Mihelsics appealed, alleging that Progressive failed to use the required statutory language in some of the documents containing the named driver exclusion and, therefore, the exclusion was not valid.
In a lead opinion by Judge Bandstra and an opinion by Judge Murray concurring in the reasoning and the result of the lead opinion, the Court of Appeals held:
The named driver exclusion in the policy is invalid because it did not strictly comply with the wording of the statutorily required warning regarding the named driver exclusion. The trial court erred by granting Progressive’s motion for summary disposition and denying the Mihelsics’ cross-motion for summary disposition. The judgment of the trial court must be reversed and the case must be remanded to the trial court for further proceedings.
Judge BANDSTRA stated in the lead opinion that to satisfy the notice requirement of MCL 500.3009(2) the warning must appear on the certificate of insurance and at least one of the following, the face of the policy, the declaration page, or the certificate of the policy. The trial court correctly concluded that the requirements of § 3009(2) were not satisfied merely by inclusion of the correctly worded warning on the declaration page. The statute provides the warning that must be provided verbatim by insurers. Progressive failed to provide the statutorily required notice verbatim.
Judge Murray, concurring, wrote separately to point out that MCL 500.3009(2) unambiguously requires the named driver exclusion to be provided in the exact words that the Legislature mandated. The absurd result doctrine of statutory construction employed by the dissent cannot be used to modify an unambiguous statute. The statute’s unambiguous commands must be enforced.
Reversed and remanded.
Judge Markey, dissenting, would hold that Progressive complied with the statutory notice requirement when it substituted the term “responsible” for the term “liable” in the named driver exclusion on some of the insurance documents. Progressive accomplished the intent of the Legislature in enacting § 3009(2) notices by substituting the totally synonymous word “responsible” for the word “liable.” Although it is the Court’s function to apply the law as written, on rare occasions there may arise situations where following this philosophy with myopic rigidity effects not only a complete thwarting of the Legislature’s intent but also a profoundly unfair and inequitable result. The narrow facts of this case and the majority’s treatment of them create precisely that situation. Upholding the exclusion under the facts of this case would fulfill the Legislature’s intent. The judgment of the trial court should be affirmed.
Insurance — Motor Vehicle Liability Coverage — Named Excluded Operators — Notice of Excluded Operators.
The Insurance Code provides that, if authorized by the insured, automobile liability or motor vehicle liability coverage may be excluded when a vehicle is operated by a named excluded person; the warning that must be provided with regard to a named excluded person must be verbatim the warning provided in MCL 500.3009(2) and must appear on the certificate of insurance and at least one of the following: the face of the policy, the declaration page, or the certificate of the policy.
Bensinger, Cotant & Menkes, EC. (by Kerr L. Moyer), for Progressive Michigan Insurance Company.
RizzoBryan, EC. (by Devin R. Day), for Scott and Andrea Mihelsic.
Before: MARKEY, P.J., and BANDSTRA and MURRAY, JJ.

Opinion:
BANDSTRA, J.
In this matter of first impression, I would conclude that the warning notice requirement of MCL 500.3009(2) must be enforced as written. Thus, the named driver exclusion in the policy of insurance at issue here is invalid because it does not strictly comply with the statute.
BACKGROUND FACTS AND PROCEEDINGS BELOW
Defendants-appellants, Scott and Andrea Mihelsic, were injured in an automobile accident when a truck driven by defendant William Smith crossed the center-line of the road and struck their vehicle. When Smith purchased the truck, he did not have a driver's license because he had too many points on his record. In order to obtain license plates and insurance, he added his friend, defendant Sheri Harris, to the title. Harris obtained insurance with appellee, Progressive Michigan Insurance Company, and Smith paid for it. A form signed by Harris lists Smith as an excluded driver. The declaration page of the insurance policy also lists him as an excluded driver, as does the certificate of insurance.
Appellants brought an action against Smith, and a default was entered against him on October 4, 2006. Progressive then brought this declaratory judgment action to determine its liability to indemnify Smith and moved for summary disposition pursuant to MCR 2.116(C)(10) on the basis of the named driver exclusion. Appellants responded and filed a countermotion for summary disposition. They argued, in part, that appellee had failed to use the required statutory language for exclusion of a named driver on the documents showing insurance coverage. Disagreeing, the trial court granted appellee's motion for summary disposition and denied appellants' cross-motion, leading to this appeal.
ANALYSIS
Summary disposition may be granted under MCR 2.116(C) (10) when "there is no genuine issue as to any material fact, and the moving party is entitled to judgment . as a matter of law." We review a trial court's decision on a motion for summary disposition de novo. Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). Further, statutory interpretation is a question of law that is reviewed de novo. United States Fidelity & Guaranty Co v Mich Catastrophic Claims Ass'n (On Rehearing), 484 Mich 1, 12; 773 NW2d 243 (2009).
" 'The primary goal of statutory interpretation is to give effect to the intent of the Legislature.' Fundamentally, '[t]his task begins by examining the language of the statute itself.' " Id. at 13 (citations omitted). Clear and unambiguous statutory language must be enforced as written. Id. at 12.
MCL 500.3009(2) states:
If authorized by the insured, automobile liability or motor vehicle liability coverage may be excluded when a vehicle is operated by a named person. Such exclusion shall not be valid unless the following notice is on the face of the policy or the declaration page or certificate of the policy and on the certificate of insurance: Warning — when a named excluded person operates a vehicle all liability coverage is void — no one is insured. Owners of the vehicle and others legally responsible for the acts of the named excluded person remain fully personally liable.
In this case, the warning on the declaration page of plaintiffs policy is identical to the portion of this statutory provision following the colon. However, in the warning provided both on the face of the policy and on the certificate of insurance, the last word is "responsible" instead of "liable."
Appellee argues, first, that the warning on the declaration page alone is adequate. According to appellee, the "and" in the second sentence of MCL 500.3009(2) links the "certificate of the policy" and the "certificate of insurance," meaning that placing the warning on both of these documents is an alternative to placing it on either "the face of the policy or the declaration page." Thus, appellee argues that, because warning language identical to the statute is found on the declaration page, the statutory notice provision was satisfied notwithstanding any failure of the language used on the other documents.
I disagree. Appellee's argument disregards the grammatical structure of the statute. The sentence, "Such exclusion shall not be valid unless the following notice is on the face of the policy or the declaration page or certificate of the policy and on the certificate of insurance," contains two parallel clauses after the verb "is": "on the face..." and "on the certificate of insurance . . ." The first clause contains three alternatives, separated from each other by "or." The first and second clauses are joined by "and." Therefore, to satisfy the statute, the warning must appear on at least one of the three alternatives mentioned in the first clause and on the certificate of insurance. Appellee's interpretation that a correctly worded warning on the declaration page alone satisfies the statute is inconsistent with the grammatical structure of the statute. The trial court correctly concluded that the requirements of § 3009(2) were not satisfied merely by the correctly worded warning on the declaration page.
Nonetheless, the trial court determined that the excluded driver provision was valid under the statute, explaining:
The fact that the warning on the certificate of insurance contained the word "responsible" rather than the word "liable" does not defeat the named driver exclusion election. If the Legislature intended that the warning must be taken verbatim from the statute and placed on the enumerated documents in order to be effective, it would have been simple to indicate as much in the statute itself. Absent such a requirement, this Court finds that Plaintiff complied with the mandates of MCL 500.3009(2) in that it received authorization from the insured; placed a suitable warning on the declaration page of the policy and on the certificate of insurance.
In essence, the trial court concluded that substantial compliance with the statute was sufficient; it was enough that a "suitable" warning was provided. I disagree.
Although there is no binding authority that states that "strict compliance" with § 3009(2) is necessary, the statute itself indicates that failure to follow its requirements results in the invalidity of the exclusion. Again § 3009(2) provides:
If authorized by the insured, automobile liability or motor vehicle liability coverage may be excluded when a vehicle is operated by a named person. Such exclusion shall not be valid unless the following notice is on the face of the policy or the declaration page or certificate of the policy and on the certificate of insurance: Warning — when a named excluded person operates a vehicle all liability coverage is void — no one is insured. Owners of the vehicle and others legally responsible for the acts of the named excluded person remain fully personally liable.
The Legislature did not merely set forth the substance of the required warning. Instead, the statute mandates use of "the following notice," which notice is explicitly provided for insurers to use verbatim. Further, the Legislature did not merely state that this notice is required, without specifying the effect of noncompliance. If the required warning notice is not provided, the named person "exclusion shall not be valid." The statute could not be clearer.
In this case, the verbatim statutorily mandated warning notice does not appear, as required, on the certificate of insurance. Accordingly, the mandate of the statute is clear: the named driver exclusion "shall not be valid. . . ." The trial court erred by granting appellee's motion for summary disposition and by denying appellants' cross-motion. I would reverse and remand for further proceedings consistent with this opinion. I would not retain jurisdiction.
Having fully prevailed on appeal, appellants should be allowed to tax costs. MCR 7.219.
The parties do not mention on appeal what warning, if any, appeared on the certificate of the policy.
But see Detroit Auto Inter-Ins Exch v Felder, 94 Mich App 40, 44; 287 NW2d 364 (1979).
As noted earlier, appellee did use the prescribed language on the policy's declaration page.
Whether the meaning of the language used by appellee conveys the same meaning as the statutorily mandated warning is immaterial. The statute does not require "the following notice or a notice of similar effect" or otherwise allow for any deviation from its terms.
In light of this determination, we need not consider appellants' other arguments on appeal.