Court Opinion

ID: 6344652
Source: CourtListenerOpinion
Date Created: 2022-05-27 06:05:35.756118+00
Date Added: 2024-06-11T09:04:49.288617
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                            STATE OF MICHIGAN

                            COURT OF APPEALS

ESTATE OF MICHAEL WELLS, by GREGORY                                  UNPUBLISHED
WELLS, Personal Representative,                                      May 26, 2022

               Plaintiff-Appellant,

v                                                                    No. 348135
                                                                     Macomb Circuit Court
STATE FARM FIRE & CASUALTY COMPANY,                                  LC No. 2017-003739-NI

               Defendant-Appellee,

and

JOSEPH NARRA,

               Defendant.

                                          ON REMAND

Before: GLEICHER, C.J., and SAWYER and M. J. KELLY, JJ.

PER CURIAM.

       This matter is again before us, now on remand by the Supreme Court. By order dated
February 4, 2022, the Supreme Court, in lieu of granting leave, reversed in part and vacated in part
our July 16, 2020, judgment and remanded this case to consider an additional issue presented on
appeal. Specifically, the Supreme Court gave the following directions on remand:

               On remand, the Court of Appeals shall consider whether the motor-vehicle-
       exclusion provision in defendant’s policy applies to deny coverage. If the court
       determines that the motor-vehicle-exclusion provision does apply, then it need not
       address whether plaintiff pled a covered accident under the policy. But if the court
       determines that the motor-vehicle-exclusion provision does not apply, then the
       court should reconsider whether plaintiff pled a covered accident under the policy.

                                                -1-
For the reasons discussed below, we conclude that the homeowner’s policy exclusion shields
defendant State Farm (“defendant”) from responsibility to pay the $475,000 award contained in
the underlying consent judgment.

        The facts of this case are fully set forth in our earlier opinion and need not be repeated at
length here. Briefly, plaintiff’s decedent was killed in a single-vehicle accident while an occupant,
along with other teenagers, in a 2008 Jaguar. Plaintiff alleged that the Jaguar was operated by one
of the other individuals in the car and that the driver was underage and intoxicated and that the
intoxication was due to alcohol or drugs furnished to them at the home of their friend Gregory
Bobchick. Bobchick’s parents were insured under a home-owners policy issued by defendant.
Plaintiff brought claims of both automobile negligence and social-host liability. After settling the
automobile claims, plaintiff entered into a consent judgment to settle the social-host claims for
$475,000. Plaintiff then sought declaratory judgment against defendant to determine that it was
liable for payment of that judgment under the home-owners policy. In lieu of filing an answer,
defendant moved for summary disposition arguing multiple reasons. The trial court granted
summary disposition in favor of defendant.

        Initially, we must determine whether our review is limited to the pleadings or whether it
would be appropriate to consider whether the offered evidence would establish a genuine issue of
material fact to be resolved at trial. It is clear to us that our Supreme Court expects this Court to
confine itself to analysis based on the pleadings alone. The Supreme Court’s March 26, 2021
order scheduling oral argument on the application for leave directed the parties to provide
supplemental briefing, twice referring to MCR 2.116(C)(8) and directing the parties to address in
their briefs the issue of what documents are properly considered for that purpose. Furthermore,
Justice ZAHRA’s concurrence to the February 4, 2022 remand order specifically encouraged this
Court to “closely consider” defendant’s homeowner’s policy and the consent judgment from
plaintiff’s underlying action.

        In looking at the pleadings alone, we conclude that the doctrine of judicial estoppel
precludes plaintiff from avoiding operation of the insured-owner exclusion. “Judicial estoppel is
an equitable doctrine, which generally prevents a party from prevailing in one phase of a case on
an argument and then relying on a contradictory argument to prevail in another phase.” Spohn v
Van Dyke Pub Sch, 296 Mich App 470, 479; 822 NW2d 239 (2012) (quotation marks and citations
omitted). Under the doctrine, “ ‘a party who has successfully and unequivocally asserted a position
in a prior proceeding is estopped from asserting an inconsistent position in a subsequent
proceeding.’ ” Paschke v Retool Indus, 445 Mich 502, 509; 519 NW2d 441 (1994) (emphasis in
original), quoting Lichon v American Univ Ins Co, 435 Mich 408, 416; 459 NW2d 288 (1990).
However, “the mere assertion of inconsistent positions is not sufficient to invoke estoppel; rather,
there must be some indication that the court in the earlier proceeding accepted that party’s position
as true.” Paschke, 445 Mich at 510. Further, the doctrine applies only where the claims are
“wholly inconsistent.” Id.

        The homeowner’s policy at issue includes an exclusion of coverage for personal liability,
or payment of medical expenses of others, stemming from “bodily injury or property damage
arising out of the ownership, maintenance, use, loading or unloading of . . . a motor vehicle owned
or operated by or rented or loaned to any insured . . . .”

                                                -2-
        Plaintiff’s complaint underlying this case alleged that the subject 2008 Jaguar was “owned
by Robert Edmund Cerrito.” Apparently it is on this basis, with the implication that if Cerrito is
the owner, the Bobchicks are not owners, that plaintiff asserts in his brief on appeal that he had
“sufficiently pled in avoidance of this exclusion,” while arguing that “any argument regarding the
motor vehicle exclusion . . . should be remanded for consideration of its applicability after proper
factual development through discovery.” In fact, plaintiff’s assertion that Cerrito owned the
vehicle, taken as true for purposes of this analysis, is hardly dispositive with respect to the
exclusion, because “[t]here may be multiple owners of a vehicle for purposes of the no-fault act.”
Chop v Zielinski, 244 Mich App 677, 681; 624 NW2d 539 (2001).

        The statutory provisions governing what constitutes ownership of a motor vehicle “operate
to prevent users of motor vehicles from obtaining the benefits of personal protection insurance
without carrying their own insurance through the expedient of keeping title to their vehicles in the
names of family members.” Ardt v Titan Ins Co, 233 Mich App 685, 690; 593 NW2d 215 (1999).
MCL 500.3101(3)(l) thus defines “owner” for purposes of the no-fault act to include, under
subparagraph (i), “[a] person . . . having the use of a motor vehicle, under a lease or otherwise, for
a period that is greater than 30 days,” as well as, under subparagraph (iii), “[a] person that holds
the legal title to a motor vehicle.” But the contractual exclusion at issue is not limited to vehicles
owned by an insured, but rather includes vehicles operated by, or lent to, an insured. Plaintiff’s
pleadings, and operation of judicial estoppel, establish that the subject vehicle comes under this
exclusion.

        Not in dispute is that plaintiff, as we observed in our original opinion, “asserted automobile
owner’s liability, MCL 257.401, against the Bobchicks” in his lawsuit that resulted in settlement
of the “automobile claims with the Bobchicks” and their auto insurer.1 Unpub op at 2. This Court
further noted that plaintiff then entered an agreement “with the Bobchicks to settle plaintiff’s social
host liability claims for $475,000,” the result of which was that “a consent judgment in favor of
plaintiff against the Bobchicks was entered . . . providing for payment of $100,000 by [the
Bobchicks’ auto insurer] to settle plaintiff’s automobile claims and judgment against the
Bobchicks in favor of the plaintiff on its social host liability claim in the amount of $475,000.” Id.
at 2-3. Inherent in plaintiff’s position with regard to those facets of the related litigation is the
assertion that the Bobchicks had an insurable interest in the subject vehicle.
               Under Michigan law, an insured must have an “insurable interest” to
       support the existence of a valid automobile liability insurance policy. And, the
       insurable interest must be that of a named insured. An insurable interest need not
       be in the nature of ownership, but rather can be any kind of benefit from the thing
       so insured or any kind of loss that would be suffered by its damage or destruction.
       An individual can have an insurable interest in a motor vehicle without having title
       to the vehicle. . . . The insurable interest requirement arises out of long-standing

1
  Plaintiff’s second amended complaint in that action asserted that Robert Cerrito was the
registered owner of the subject Jaguar, but that the Bobchicks “took possession of, and took over
payments for, the Jaguar and regularly drove it” and that “On May 8, 2015, Defendants CERRITO,
BOBCHICK SR, DAWN BOBCHICK, BOBCHICK JR, and/or CERRITO was/were the owner(s)
of the Jaguar.”

                                                 -3-
        public policy. Public policy forbids the issuance of an insurance policy where the
        insured lacks an insurable interest. A policy is void when there is not an insurable
        interest. [Corwin v DaimlerChrysler Ins Co, 296 Mich App 242, 257-258; 819
        NW2d 68 (2012) (quotation marks, citations, and alteration brackets omitted).]

It would not be possible to have an insurable interest in a vehicle without meeting the criteria for
the exclusion here at issue, considered in light of the no-fault act’s definitions of “owner,” insofar
as it withholds coverage for personal liability stemming from “bodily injury or property damage
arising out of the ownership [or] use . . . of . . . a motor vehicle owned or operated by or . . . loaned
to any insured . . . .”

        Accordingly, plaintiff, having asserted the Bobchicks’ insurable interest all the way to
accepting a settlement from their auto insurer, should not now be allowed to take the “wholly
inconsistent” position that the Bobchicks’ association with the subject Jaguar is so remote or
attenuated that their homeowner’s policy’s exclusion of coverage in connection with ownership or
use of a vehicle owned or operated by, or lent to, an insured does not apply.

        Accordingly, we hold that the subject homeowner’s policy exclusion shields defendant
from the $475,000 in social host liability embodied in the August 15, 2017 consent judgment
between plaintiff and the Bobchicks, and, consistent with the remand order, we decline to revisit
the issues decided in our earlier opinions in this case.

      We affirm the trial court’s grant of summary disposition to defendant as to this issue.
Defendant may tax costs.

                                                                /s/ Elizabeth L. Gleicher
                                                                /s/ David H. Sawyer
                                                                /s/ Michael J. Kelly

                                                  -4-