Opinion ID: 1658184
Heading Depth: 2
Heading Rank: 2

Heading: pertinent case law

Text: We begin our consideration of the validity of the owned-vehicle exclusion by reviewing the pertinent case law of construction of insurance contracts. In Pietrantonio v Travelers Ins Co, 282 Mich 111; 275 NW 786 (1937), the plaintiff was injured in an automobile in which he was riding as a passenger. The plaintiff, at the time of the accident, was considering purchasing the car, and its owner, who was not in the automobile business, was demonstrating the car to him. The owner's insurance policy with the defendant contained an exclusion for accidents occurring `while the automobile is used in the business of demonstrating or testing.' Id. at 117. This Court held that, although the car was being demonstrated, it could not be said to have been used by its private owner in the business of demonstrating. The Court stated: It is a principle of law too well established in this jurisdiction and others to need discussion or citation of authorities, that a policy of insurance couched in language chosen by the insurer must be given the construction of which it is susceptible most favorable to the insured; that technical constructions of policies of insurance are not favored; and that exceptions in an insurance policy to the general liability provided for are to be strictly construed against the insurer. Pawlicki v Hollenbeck, 250 Mich 38 [229 NW 626 (1930)]. [ Id. at 116.] In Hooper v State Mutual Life Assurance Co, 318 Mich 384, 388; 28 NW2d 331 (1947), this Court considered language in a double-indemnity clause of a life insurance policy that excluded payment under certain circumstances. The policy language stated: This provision shall not cover homicide or death resulting directly or indirectly from self-destruction or any attempt thereat while sane or insane; or the commission of assault or felony by the insured; combat, war or any act of war; participation in an insurrection, riot, or strike; travel, or flight in any aircraft or balloon, or from being in, on, or about any kind of aircraft or balloon; participation in submarine operations, or descent or riding in a submarine; from any physical or mental disease, illness, or infirmity; from sickness resulting from the eating of any form of food or drinking of any form of liquid; hemophilia; or bacterial infection other than that occurring in connection with, or in consequence of, accidental bodily injuries; or from any kind of poisoning, whether voluntary or otherwise, or asphyxiation; or from carbon monoxide or gas, or fumes, of any kind, voluntary or involuntary, accidental or otherwise, taken, administered, absorbed, or inhaled. The insured was a victim of homicide. The plaintiff widow argued that the phrase resulting directly or indirectly from modified both homicide and death, and since the insured's murder did not fit within one of the exceptions, the double-indemnity provision applied. The insurer claimed that the twelve exceptions pertained only to the word death, and that all homicides were excluded from double-indemnity coverage. This Court noted that the insurance company would have the policy language read as though there were a comma or semicolon after the word homicide, and held that, construing the provision in the light most favorable to the insured, the phrase resulting directly or indirectly from modified either the word homicide or the word death or both. This Court quoted Boesky Bros Corp v USF & G Co, 267 Mich 628, 629-630; 255 NW 307 (1934): There is no question but that, in a case of ambiguity, the language must be strongly construed against the insurer. The courts have no patience with attempts by a paid insurer to escape liability by taking advantage of an ambiguity, a hidden meaning, or a forced construction of the language in a policy, when all question might have been avoided by a more generous or plainer use of words. In Francis v Scheper, 326 Mich 441, 445; 40 NW2d 214 (1949), the plaintiff was injured in an automobile accident while being transported home from work by his employer. Under the plaintiff's employment agreement, he received an hourly wage and transportation to and from work. The garnishee defendant casualty company denied coverage because of a clause in the policy excluding coverage for an employee injured while engaged in the employment of the insured. The Court found for the plaintiff, stating: The phrase, engaged in the employment, can fairly be construed as meaning, active in the work plaintiff was employed and paid to do. It was incumbent on defendant casualty company, who drafted the policy, in order to escape liability under the circumstances of this case, so to draft the policy as to make clear the extent of nonliability under the exclusion clause. [ Id. at 446-448.] In DeLand v Fidelity Health & Accident Mutual Ins Co, 325 Mich 9; 37 NW2d 693 (1949), we considered a life insurance policy which contained a prominent notice indicating it was noncancellable. The policy also contained, in a section entitled Additional Provisions, a sentence stating that the acceptance of renewal premiums was optional. Faced with the defendant insurer's claim that it was entitled to refuse to renew the policy, this Court stated: In our judgment the much obscured sentence: The acceptance of any renewal premium shall be optional with the company is inconsistent with the much more prominently printed words of the policy heretofore noted and renders the policy not only ambiguous but deceptive. [ Id. at 17.] The DeLand Court also quoted Schultz v Benefit Ass'n of Ry Employees of Chicago, 175 SC 182, 187; 178 SE 867 (1934): [T]he policyholder must be protected against confusing statements in policies, and, wherever there are two constructions that can be placed upon the policy, the construction most favorable to the policyholder will be adopted. [ DeLand, supra at 18.]