Court Opinion

ID: 4026217
Source: CourtListenerOpinion
Date Created: 2016-08-18 07:06:48.3753+00
Date Added: 2024-06-11T14:33:47.022093
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

MICHAEL E. MCCARTHA,                                                 UNPUBLISHED
                                                                     August 16, 2016
               Plaintiff-Appellant,

v                                                                    No. 326689
                                                                     Wayne Circuit Court
STATE FARM FIRE & CASUALTY                                           LC No. 14-006477-CZ
COMPANY,

               Defendant-Appellee.

Before: BECKERING, P.J., and CAVANAGH and GADOLA, JJ.

PER CURIAM.

       Plaintiff appeals as of right an order granting defendant’s motion for summary disposition
because no genuine issue of fact existed that exclusionary provisions in plaintiff’s homeowner’s
insurance policy precluded coverage for roof and interior water damage to his home. We affirm.

                   I. PERTINENT FACTS AND PROCEDURAL HISTORY

        On October 2, 2010, during a rainstorm, plaintiff’s daughter was alone sleeping inside
plaintiff’s home when she heard a “loud crash” on the roof. She went outside and observed a
large tree limb lying on the roof. It looked like the tree in plaintiff’s backyard had split and fell
toward the right side of the house. Photographs submitted by plaintiff show a large tree limb
resting on the corner of the edge, along the side of the house near or on the gutter. Plaintiff’s
daughter observed damage to the fence and gutter, but she did not notice any damage “from the
roof inward.”

        After the tree limb fell, plaintiff made an insurance claim with State Farm, his
homeowner’s insurer, for damage to his roof. A claims representative inspected the exterior of
the property and observed the condition of the roof to be “very bad,” “severely deteriorated,”
with signs of wear, tear, deterioration, and prior damage. There was a large hole in the middle of
the roof, worn shingles, areas missing shingles, and the remains of a blue tarp that appeared to
have been exposed to the weather for a significant time. Photographs of the roof taken at the
time of the loss also show an area of damage and deterioration on the back slope of the roof
toward the middle of the roof. State Farm paid plaintiff’s claim for the removal of tree debris
and for repairs to the visible damage to his gutter and fencing. But State Farm denied coverage
for the damage to the roof, determining that the damage was the result of wear, tear, deterioration
or neglect; policy exclusions precluded coverage for such losses.
                                                -1-
        Several months after State Farm denied his claim for loss to his roof, plaintiff made an
additional claim under his homeowner’s policy for interior water damage which he said occurred
after the tree limb fell on his house in October 2010, and resulted from that incident. After re-
inspecting the property in September 2011, State Farm denied plaintiff’s claim for interior water
damage, citing his failure to immediately notify State Farm of the damage; his failure to protect
the property at or after the time of the loss; the lack of policy coverage due to mold, rot, and
neglect; and his willful failure to cooperate in State Farm’s investigation of the loss.

        Thereafter, plaintiff filed this lawsuit, alleging that State Farm breached its insurance
contract in failing to pay his claims. State Farm moved for summary disposition pursuant to
MCR 2.116(C)(10), arguing that no genuine issue of material fact existed that the roof and
interior water damage was not accidental but was the result of wear and tear, deterioration, or
neglect—losses that were expressly excluded from coverage under the terms of the policy. State
Farm further argued that coverage for the claimed losses was precluded by the anti-concurrent
causation clause in the policy exclusions. State Farm supported its motion with deposition
testimony, affidavits, photographs, and other documentary evidence indicating that the visible
damage to the roof was not caused by the fallen tree limb; rather, plaintiff’s roof was already in a
poor and deteriorated condition, and had not been properly maintained at least several months
before the tree limb fell. The trial court granted State Farm’s motion for summary disposition,
concluding that the policy exclusion for wear, tear or deterioration, along with the anti-
concurrent causation exclusion, applied to preclude coverage for plaintiff’s claimed losses. This
appeal followed.

                            II. SUMMARY DISPOSITION MOTION

        Plaintiff argues that the trial court erred in granting State Farm’s motion for summary
disposition under MCR 2.116(C)(10). We disagree.

        We review de novo a trial court’s decision on a motion for summary disposition. Hayley
v Allstate Ins Co, 262 Mich. App. 571, 573; 686 NW2d 273 (2004). “A motion under MCR
2.116(C)(10) tests the factual sufficiency of the complaint.” Maiden v Rozwood, 461 Mich. 109,
120; 597 NW2d 817 (1999). “In evaluating a motion for summary disposition brought under this
subsection, a trial court considers affidavits, pleadings, depositions, admissions, and other
evidence submitted by the parties, MCR 2.116(G)(5), in the light most favorable to the party
opposing the motion.” Id. “Where the proffered evidence fails to establish a genuine issue
regarding any material fact, the moving party is entitled to judgment as a matter of law.” Id.
‘“When a motion under subrule (C)(10) is made and supported as provided in this rule, an
adverse party may not rest upon the mere allegations or denials of his or her pleading, but must,
by affidavits or as otherwise provided in this rule, set forth specific facts showing that there is a
genuine issue for trial.”’ Id., quoting MCR 2.116(G)(4).

        We also review de novo the construction of an insurance contract. Sunshine Motors, Inc
v New Hampshire Ins Co, 209 Mich. App. 58, 59; 530 NW2d 120 (1995). “An insurance policy is
a contract that should be read as a whole to determine what the parties intended to agree on.”
McKusick v Travelers Indemnity Co, 246 Mich. App. 329, 332; 632 NW2d 525 (2001). “In
interpreting insurance policies, we are guided by well-established principles of construction.” Id.

                                                -2-
“The policy must be enforced in accordance with its terms; therefore, if the terms of the contract
are clear, we cannot read ambiguities into the policy.” Id.

                Exclusionary clauses in insurance policies are strictly construed in favor of
       the insured. However, coverage under a policy is lost if any exclusion within the
       policy applies to an insured’s particular claims. Clear and specific exclusions
       must be given effect. It is impossible to hold an insurance company liable for a
       risk it did not assume.” [Auto-Owners Ins Co v Churchman, 440 Mich. 560, 567;
       489 NW2d 431 (1992) (citations omitted).]

        We agree that the policy exclusions apply to preclude coverage for the roof and interior
water damage in this case. The first exclusion at issue clearly and unambiguously excludes
coverage for any loss consisting of, or directly and immediately caused by, wear, tear, or
deterioration, and provides:

               1. We do not insure for any loss to the property described in Coverage A
       which consists of, or is directly and immediately caused by, one or more of the
       perils listed in items a. through n. below, regardless of whether the loss occurs
       suddenly or gradually, involves isolated or widespread damage, arises from
       natural or external forces, or occurs as a result of any combination of these:

                                              * * *

              g. wear, tear, marring, scratching, deterioration, inherent vice, latent defect
       or mechanical breakdown[.]

        On the evidence presented, there is no genuine issue of material fact that the damage to
the roof consisted of wear, tear, or deterioration. There is no dispute that, in March 2010, before
the tree limb fell in October 2010, plaintiff received several quotes to replace the roof and that,
even before March 2010, plaintiff attempted to perform repairs to the roof himself in an area
where the shingles were “stripped away” or “just about gone.” Testimony by Jack McCauley,
plaintiff’s own expert who observed plaintiff’s property in March 2010 for the purpose of
providing quotes to replace the roof and to do some interior work, testified that the roof was in
“[v]ery poor condition,” shingles were deteriorated, falling off, and missing, and roof boards
were showing where shingles were completely off. McCauley believed there was a hole in the
roof and that the roof, which appeared to be twenty years old, had not been maintained in any
way.

        McCauley also observed water damage in the bathroom, a back bedroom, and kitchen,
which was caused by water leaking from the roof. The damage included deteriorated wet plaster,
peeling paint and plaster, and holes in the ceilings. McCauley testified that the roof needed to be
replaced “right away” in March 2010, and if it was not repaired, water would continue to enter
the house and cause interior damage. Plaintiff’s daughter also testified that, before the tree limb
fell in October 2010, the roof was “already bad.” Water was entering plaintiff’s bedroom, by the
side door, and next to the kitchen, and there was a hole in the ceiling over plaintiff’s bedroom.

       McCauley further testified that the poor, deteriorated condition of the roof shown in the
photographs taken at the time of the loss in October 2010 was consistent with the damage he
                                                -3-
observed in March 2010, before the tree limb fell, and that the tree limb did not cause the
deterioration damage to the roof. McCauley believed that the interior water damage depicted in
the 2011 photographs was also generally consistent with the damage he observed in March 2010,
before the tree limb fell. From this testimony, it can be reasonably inferred that the claimed
damage to the roof did not result from the fallen tree limb but consisted of prior damage
attributable to wear, tear, or deterioration.

        Plaintiff asserted that State Farm failed to prove that the roof damage was the result of
deterioration and denied that he had experienced any water leaks, damage, or problems with the
roof before the tree limb fell. However, plaintiff failed to advance any evidence to dispute the
testimony of McCauley, as well as his daughter, regarding the poor and deteriorated condition of
the roof existing before the tree limb fell. Photographs showed the deteriorated condition of the
roof in that shingles were missing, falling off, and curling, and there appeared to be a hole in the
roof.1 The photographs submitted by plaintiff to support his claim of loss show the tree limb
resting on the corner of the edge along the side of the house, away from this damaged area.
Plaintiff claimed that the tree limb hit the roof, bounced, and then rolled off the side, causing the
damage. Plaintiff was not at home when the tree fell, and thus, he did not witness the incident.
Plaintiff’s speculation does not rise to the level of a genuine issue of material fact for trial. See
Maiden, 461 Mich. at 120 (a party opposing the motion may not rest on mere allegations or
denials, but must set forth specific facts showing a genuine issue for trial).

        And although McCauley opined that the falling tree limb could cause a hole in the roof,
he viewed the photographs and did not see how it could have struck the roof and then rolled off
to the side of the house. The photographs do not reveal damage in the specific spot where
plaintiff claimed the tree limb struck over his daughter’s bedroom. Viewing the photographs,
McCauley testified, it did not even look like the tree landed on the roof, but “kind of went down
the side of the house,” damaging the gutters. He also testified that there was “no way” other tree
branches shown in another photograph submitted by plaintiff caused the hole in the roof.
Plaintiff’s daughter also testified that her recollection of the damage she observed after the tree
limb fell was to the gutter and fence on the side of the house.

        We recognize that McCauley noted on his quote to replace the roof several months after
the incident that “there is strong evidence that holes in the roof were caused by falling branches
from tree in backyard.” However, McCauley testified during his deposition that he said that only
because plaintiff asked him to, so that insurance would pay for the roof repairs. McCauley
confirmed his opinions that: (1) the roof was deteriorated, in poor condition, and leaking before

1
  We disagree with plaintiff’s argument that State Farm was required to substantiate the
deterioration with scientific and/or engineering evidence to satisfy the exclusion. The terms
“deterioration” and “wear and tear” are not defined by the policy so they are accorded their plain
meaning. See Royce v Citizens Ins Co, 219 Mich. App. 537, 542; 557 NW2d 144 (1996). The
ordinary and plain meaning of “deteriorate,” as defined by Webster’s New World Dictionary,
Second College Edition (1984), is simply “worse, inferior,” and “wear and tear” is defined as
“loss and damage resulting from use.”

                                                -4-
the tree limb fell; (2) the branches on the roof would not have caused the deterioration of the roof
or the slippage of the shingles; and (3) the photographs of the roof taken at the time of loss in
October 2010 showed the same poor condition that existed when he observed the property in
March 2010.2

        On the evidence presented, it is undisputed that the poor and deteriorated condition of
plaintiff’s roof was evident months before the tree limb fell and there is no evidence, only mere
speculation, that the claimed damage to the roof was caused by the fallen tree limb.
Accordingly, there is no genuine issue of material fact that the claimed damage falls squarely
within the policy exclusion expressly excluding coverage for loss consisting of wear, tear, or
deterioration. “Coverage under a policy is lost if any exclusion within the policy applies to a
particular claim.” Allstate Ins Co v Keillor (After Remand), 450 Mich. 412, 420; 537 NW2d 589
(1995). The exclusion also precluded coverage for the interior water damage as a direct and
immediate result of the deterioration of the roof, regardless of whether the loss occurred
suddenly or gradually.

       Even assuming that the fallen tree limb aggravated the water damage to the interior of the
home, coverage for the damage would be precluded under the policy’s exclusion for neglect of
the insured. That exclusion expressly excludes coverage for any loss that would not have
occurred in the absence of neglect:

               2. We do not insure under any coverage for any loss which would not have
       occurred in the absence of one or more of the following excluded events. We do
       not insure for such loss regardless of: (a) the cause of the excluded event; or (b)
       other causes of the loss; or (c) whether other causes acted concurrently or in any
       sequence with the excluded event to produce the loss; or (d) whether the event
       occurs suddenly or gradually, involves isolated or widespread damage, arises
       from natural or external forces, or occurs as a result of any combination of these:

                                              * * *

              d. Neglect, meaning neglect of the insured to use all reasonable means to
       save and preserve property at and after the time of a loss, or when the property is
       endangered.

Under this provision, known as an anti-concurrent causation clause, a loss is plainly excluded
from coverage if it would not have occurred in the absence of the insured’s neglect in failing to
use all reasonable means to save and preserve the property at and after the time of a loss or when
the property is endangered, regardless if there is a contributing cause acting concurrently or in

2
  Plaintiff also submitted a quote from a construction company which evaluated the roof for
storm damage almost a year after the tree limb fell, claiming it was evidence that the roof was
not deteriorated. But the quote stated that it was impossible to determine the extent of storm
damage caused by a tree “[d]ue to the poor condition of the roof,” which supports the testimony
regarding the roof’s condition.

                                                -5-
any sequence with the neglect to produce the loss. See Sunshine Motors, Inc, 209 Mich. App. at
59-60.

        Given the poor and deteriorated condition of the roof that McCauley opined would cause
water to continue to enter the house if not repaired several months before the claimed loss, there
is no dispute that the house was clearly “endangered” from leaking water even months before the
tree limb fell. Plaintiff also admittedly did not take any action to repair or protect the roof after
the tree limb fell, but before he started experiencing water leaking through the ceiling, even
though the insurance contract obligated him to protect the property from further damage or loss
at or after the claimed loss occurred and make reasonable and necessary temporary repairs.
Plaintiff’s failure to act under these circumstances clearly constituted neglect within the meaning
of the policy. And under the anti-concurrent coverage clause, coverage for the water damage
caused by plaintiff’s neglect was excluded regardless of any other cause that may have acted to
produce the loss.

        In summary, plaintiff failed to set forth evidence to refute State Farm’s clear evidence
that the damage to the roof was the result of wear, tear, or deterioration which existed months
before the tree limb fell. Further, the neglect exclusion also precluded coverage for the water
damage. Accordingly, plaintiff cannot recover under the policy and summary disposition of his
breach of contract claim against State Farm was proper.

                                   III. MOTION TO AMEND

      Plaintiff also argues that the trial court abused its discretion in denying his motion to
amend his complaint. Because plaintiff’s proposed claims are not actionable, we disagree.

        We review a trial court’s decision regarding leave to amend a complaint for an abuse of
discretion. PT Today, Inc v Comm’r of the Office of Fin & Ins Servs, 270 Mich. App. 110, 142;
715 NW2d 398 (2006). An abuse of discretion occurs when the trial court’s decision falls
outside the range of reasonable and principled outcomes. In re Kostin Estate, 278 Mich. App. 47,
51; 748 NW2d 583 (2008). “This Court will not reverse a trial court’s decision regarding leave
to amend unless it constituted an abuse of discretion that resulted in injustice.” PT Today, Inc,
270 Mich. App. at 142.

        A court should freely grant leave to amend a complaint “when justice so requires.” MCR
2.118(A)(2). “Thus, a motion to amend should ordinarily be denied only for particularized
reasons, including . . . futility.” PT Today, Inc, 270 Mich. App. at 143. “There is no injustice if
the proceedings would have reached the same result if the trial court had not denied a party leave
to amend its pleadings.” Id. at 142. “An amendment would be futile if (1) ignoring the
substantive merits of the claim, it is legally insufficient on its face; (2) it merely restates
allegations already made; or (3) it adds a claim over which the court lacks jurisdiction.” Id. at
143 (internal citations omitted).

       Here, over two years after filing his initial complaint alleging breach of contract, plaintiff
sought to amend his complaint to add additional factual allegations regarding State Farm’s
allegedly negligent and fraudulent conduct in: inspecting the property damage and handling his
claim; reporting to the underwriters; and canceling his policy. Plaintiff added claims seeking

                                                -6-
damages for “bad faith in insurance” and violations of the Michigan’s Insurance Code. Plaintiff
also sought additional compensatory damages, as well as statutory and punitive damages. State
Farm opposed the amendment on the basis that allowing amendment over two years into the
litigation would cause undue delay and, moreover, the amendments would be futile because the
additional claims alleged were not actionable in Michigan. The trial court agreed and denied
plaintiff’s motion to amend on both bases. We agree that plaintiff’s proposed claims are not
actionable, making amendment futile. See PT Today, Inc, 270 Mich. App. at 143.

                               A. BAD FAITH IN INSURANCE

       First, plaintiff moved to amend his complaint to add a tort claim for “bad faith in
insurance,” essentially alleging that State Farm failed to fully perform in good faith the duties
owed under the insurance contract in investigating and handling his insurance claim. But
Michigan has declined to recognize an independent tort cause of action for an insurer’s bad faith
handling of an insured’s claim or denial of benefits arising from an insurer’s breach of an
insurance contract.3

        Further, to the extent that the allegations contained in plaintiff’s proposed amended
complaint may be read to allege that State Farm negligently performed its obligations under the
contract by failing to act reasonably in handling plaintiff’s claim, such claims arose from the
insurance contract and, thus, do not support an independent tort claim. The duty to use ordinary
care in performance of the contract arises out of the contract and is not independent of the
contract. Burnside v State Farm Fire & Cas Co, 208 Mich. App. 422, 432-433; 528 NW2d 749
(1995) (TALBOT, J., concurring). Thus, “when there is a mere breach of contract, whether in
good faith or not, there is no independent tortious action . . . .” Id. at 432. Accordingly,
plaintiff’s claim for “bad faith in insurance” is not actionable and, thus, the proposed amendment
adding this claim to his complaint would be futile. See PT Today, Inc, 270 Mich. App. at 143.

                  B. VIOLATIONS OF MICHIGAN’S INSURANCE CODE

        Plaintiff also sought to add claims seeking statutory damages for alleged violations of
Michigan’s Insurance Code, MCL 500.100 et seq. First, plaintiff sought to amend his complaint
to add a claim for violation of MCL 500.2005/MCL 500.2005a of the Uniform Trade Practices
Act (UTPA), alleging that State Farm committed unfair and deceptive acts by making
misrepresentations of material facts to its underwriters that induced the underwriters to terminate
his policy. However, no private cause of action may be brought under the UTPA; rather,
plaintiffs who believe the UTPA has been violated may complain to the Insurance

3
  See, e.g., Hearn v Rickenbacker, 428 Mich. 32, 37; 400 NW2d 90 (1987) (breach of an insurer’s
duty to act in good faith in the handling and payment of claims is not a tort recognized in
Michigan); Casey v Auto Owners Ins Co, 273 Mich. App. 388, 401-402; 729 NW2d 277 (2006)
(“An alleged bad-faith breach of an insurance contract does not state an independent tort
claim.”); Runions v Auto-Owners Ins Co, 197 Mich. App. 105, 109-110; 495 NW2d 166 (1992)
(the “tort of bad-faith handling of an insurance claim” is “nonexistent” and there is no cause of
action in tort where the only tortious conduct alleged is the insurer’s failure to pay the claim).

                                                -7-
Commissioner. Crossley v Allstate Ins Co, 155 Mich. App. 694, 697; 400 NW2d 625 (1986);
Safie Enterprises, Inc v Nationwide Mut Fire Ins Co, 146 Mich. App. 483, 494; 381 NW2d 747
(1985). Thus, such amendment would have been futile. See PT Today, Inc, 270 Mich. App. at
143.

        Second, plaintiff sought to amend his complaint to add a claim for violation of MCL
500.2124, a provision contained within the Essential Insurance Act, MCL 500.2101 et seq.,
which concerns home and automobile insurance. Flumignan v Detroit Auto Inter-Ins Exch, 131
Mich. App. 121, 123; 345 NW2d 910 (1983). Plaintiff alleged that State Farm committed “gross
negligence” and “bad faith with malice” when it knowingly and fraudulently communicated false
and unsubstantiated information to its underwriters regarding the reasons for cancellation of his
policy.

        Whether a private cause of action for damages exists for the violation of a statute depends
on the Legislature’s intent to create a right of action for the statutory violation. Epps v 4
Quarters Restoration LLC, 498 Mich. 518, 534-535; 872 NW2d 412 (2015); Lash v Traverse
City, 479 Mich. 180, 192-193; 735 NW2d 628 (2007). MCL 500.2124 does not expressly create
a private right of action. Instead, its language evidences a legislative intent to limit exposure to
civil liability against the commissioner or its employees, an insurer or its employees or its
authorized representatives, or a licensed insurance agent for certain statements made concerning
an insured, unless the statement was made with gross negligence or in bad faith with malice in
fact. MCL 500.2124(1), (2). The Michigan Insurance Code, of which MCL 500.2124 is a part,
also does not expressly provide a private cause of action for enforcement of its provisions.
“Nevertheless, it is sometimes possible that a court can infer a private cause of action from a
statute when necessary to remediate its breach.” Epps, 498 Mich. at 534. An inference is
appropriate when there is no express remedy for its violation, but it is deemed, exclusively or in
part,

       (a) to protect a class of persons which includes the one whose interest is invaded;
       (b) to protect the particular interest which is invaded; (c) to protect that interest
       against the kind of harm which has resulted; and (d) to protect that interest against
       the particular hazard from which the harm results. [Id. (citations and quotations
       omitted.)]

         In this case, there is no basis to infer a private cause of action for damages to enforce
MCL 500.2124. Chapter 21 of the Insurance Code expressly provides a mechanism for
enforcement of its provisions. Epps, 498 Mich. at 534. Under MCL 500.2113(1), if a person has
reason to believe that an insurer, as alleged in this case, has improperly denied him insurance, he
is entitled “to a private informal managerial-level conference with the insurer and to a review
before the commissioner, if the conference fails to resolve the dispute.” If either party disagrees
with a determination of the commissioner, the commissioner, upon request, is required to hear
the matter as a contested case under the Administrative Procedures Act, MCL 24.201 et seq.
MCL 500.2113(5); Flumignan, 131 Mich. App. at 128-129, citing 1981 AACS R 500.1508-1513.
Under the administrative regulations, if the commissioner finds an improper termination,
coverage may be reinstated. Rule 500.1514. Because Chapter 21 has its own legislatively
created remedial scheme for the insured to redress an improper termination of insurance, it

                                                -8-
should not be interpreted to allow an insured a private cause of action for damages for violations
of its provisions. Epps, 498 Mich. at 534-535.

        The crux of plaintiff’s allegation is that his insurance was terminated because of the false
and unsubstantiated statements State Farm’s claims representative knowingly made, in bad faith,
to its underwriters regarding the condition of his property. Plaintiff could have contested the
allegedly improper termination by pursuing the matter through the remedial scheme specifically
provided for in Chapter 21 of the Insurance Code, MCL 500.2113, and thus, was not without a
remedy under the Code. See Epps, 498 Mich. at 534-535; Fisher v WA Foote Mem Hosp, 261
Mich. App. 727, 730-731; 683 NW2d 248 (2004).4 Because plaintiff had no private cause of
action for the alleged violation of MCL 500.2124, such amendment would have been futile. See
PT Today, Inc, 270 Mich. App. at 143.

        Third, plaintiff sought to amend his complaint to add a claim for violation of MCL
500.4503, which governs insurance fraud and is included in Chapter 45 of the Insurance Code,
MCL 500.4501 et seq. Plaintiff sought statutory penalties, under MCL 500.4511, for State
Farm’s fraudulent insurance acts specified in MCL 500.4503. The insurance fraud provisions
under Chapter 45 do not expressly create a private cause of action. Thus, plaintiff’s claim under
MCL 500.4503 is precluded if the code provides an adequate means of enforcing its provisions.
See Epps, 498 Mich. at 534-535; Fisher, 261 Mich. App. at 730-731. MCL 500.4503 defines
fraudulent insurance acts for the purpose of criminal liability under MCL 500.4511(1). MCL
500.4511(1) provides that a person who commits a fraudulent insurance act is guilty of a felony
and sets forth the punishment for violations of MCL 500.4503. Chapter 45 of the Insurance
Code, thus, adequately provides its own remedial scheme to redress the alleged violations
through the imposition of criminal liability for fraudulent acts. Epps, 498 Mich. at 534-535;
Fisher, 261 Mich. App. at 730-731. Therefore, we conclude that plaintiff also does not have a
private cause of action to redress the alleged fraudulent acts under MCL 500.4503, making futile
an amendment to his complaint to add the claim. See PT Today, Inc, 270 Mich. App. at 143.

        Finally, although plaintiff did not include a proposed claim of common-law fraud in his
motion to amend, he argues on appeal that such amendment is warranted. We generally do not
consider an issue on appeal that was not properly raised and decided by the trial court. See
Walters v Nadell, 481 Mich. 377, 387; 751 NW2d 431 (2008) (citation omitted). Nevertheless,
this issue is without merit.

       “[T]o constitute actionable fraud plaintiffs must establish that (1) defendant made a
material representation; (2) it was false; (3) when it was made defendant knew that it was false,
or made it recklessly, without knowledge of its truth and as a positive assertion; (4) defendant

4
  Further, the general provisions of Michigan’s Insurance Code, of which Chapter 21 is a part,
also provide a remedial scheme for the commissioner to enforce violations of the Code. See
MCL 500.150(1)(a), (b). And MCL 500.230 states that, unless otherwise provided, every
penalty under the Code shall be sued for and recovered in the name of the prosecuting attorney,
which “precludes a private party from recovering penalties specified in the code unless otherwise
provided.” Young v Mich Mut Ins Co, 139 Mich. App. 600, 604-605; 362 NW2d 844 (1984).

                                                -9-
made it with the intent that it should be acted upon by plaintiff; (5) plaintiff did act in reliance
upon it; and (6) plaintiff thereby suffered injury.” Webb v First of Mich Corp, 195 Mich. App.
470, 473; 491 NW2d 851 (1992). Here, plaintiff alleged that State Farm’s claims representative
knowingly or recklessly made material misrepresentations regarding the deteriorated condition of
plaintiff’s roof with the intent that plaintiff would act on them, i.e., inducing him to pay for the
repairs to his roof by threatening to cancel plaintiff’s homeowner’s policy if he did not replace
his own roof. However, plaintiff did not allege that he acted in reliance on the alleged
misrepresentations concerning the condition of his roof. In fact, plaintiff admits that he did not
repair the roof. Thus, plaintiff failed to state a claim of actionable fraud, making futile an
amendment to add such a claim. See PT Today, Inc, 270 Mich. App. at 143.

                                   C. PUNITIVE DAMAGES

        Finally, plaintiff moved to amend his complaint to add a claim for punitive damages.
“Punitive damages, which are designed to punish a party for misconduct, are generally not
recoverable in Michigan.” Casey v Auto Owners Ins Co, 273 Mich. App. 388, 400; 729 NW2d
277 (2006). “The exception is if [such damages] are expressly authorized by statute.” Id.
Plaintiff did not cite any statute that would grant him punitive damages. Instead, he generally
alleged a right to punitive damages “resulting from the oppressive conduct undertaken by
Defendant State Farm for willfully and maliciously, in conscious disregard of the rights and
interests of Plaintiff, along with and for Defendants negligence and contempt directed towards
the injuring of Plaintiff; sum to be fixed at trial.” This allegation is not sufficient to support a
claim for punitive damages. Accordingly, amendment of plaintiff’s complaint to add his claim
for punitive damages would be futile. See PT Today, Inc, 270 Mich. App. at 143.

        Because the trial court properly denied plaintiff’s motion to amend his complaint on the
basis of the futility of his proposed claims, we do not address whether the motion to amend, filed
over two years after the initial complaint, was unduly delayed.

                           IV. MOTION TO COMPEL DISCOVERY

       Plaintiff also argues that the trial court abused its discretion in denying in part his motion
to compel discovery. We disagree.

        This Court reviews for an abuse of discretion a trial court’s decision on a motion to
compel discovery. Cabrera v Ekema, 265 Mich. App. 402, 406; 695 NW2d 78 (2005). An abuse
of discretion occurs when the trial court’s decision falls outside the range of reasonable and
principled outcomes. In re Kostin Estate, 278 Mich. App. at 51.

        “It is well settled that Michigan follows an open, broad discovery policy that permits
liberal discovery of any matter, not privileged, that is relevant to the subject matter involved in
the pending case.” Reed Dairy Farm v Consumers Power Co, 227 Mich. App. 614, 616; 576
NW2d 709 (1998). “[T]he purpose of discovery is to simplify and clarify issues. Thus, the rules
should be construed in an effort to facilitate trial preparation and to further the ends of justice.”
Id. (citation omitted). However, a trial court should also protect the interests of the party
opposing discovery so as not to subject that party to excessive, abusive, or irrelevant discovery
requests.” Cabrera, 265 Mich. App. at 407.

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       Plaintiff argues that State Farm’s internal procedures and guidelines for investigating
claims would lead to discovery of material that could potentially provide a “basis to a windfall of
dishonest acts committed by” the claims representative and for further unlawful acts prohibited
by statute. Likewise, regarding the underwriting report sought, plaintiff argues that it would
“bring forth” his complaint of insurance fraud and reveal that the claims representative’s reports
regarding the condition of plaintiff’s property were false and misleading.

        However, the only claim at issue in this case is State Farm’s alleged breach of contract in
denying coverage for plaintiff’s claimed loss. Although the good faith of the parties is relevant
to a breach of contract claim, Isagholian v Transamerica Ins Corp, 208 Mich. App. 9, 12; 527
NW2d 13 (1994), State Farm would not be subject to any legal duty arising from its internal
guidelines and procedures. Rather, the insurance contract governs State Farm’s duties and
obligations. And the underwriting reports concern the cancellation of plaintiff’s insurance
policy, which occurred after plaintiff made his claim for loss and is not at issue in this case
involving State Farm’s alleged breach of contract in failing to pay plaintiff’s claim for losses
under the policy. Accordingly, the materials sought by plaintiff are not relevant or “reasonably
calculated to lead to the discovery of admissible evidence” in this breach of contract action. See
MCR 2.302(B)(1).

       Furthermore, the trial court reviewed the underwriting materials in camera to see if there
was anything that State Farm did not produce that should have been produced. Plaintiff was also
provided with the entire claim file, as redacted for privileged information, including the activity
log notes of the claims representative, which noted what the claims representative reported to the
underwriters about the condition of the roof. On this record, we find no abuse of discretion in
denying the motion to compel discovery. See MCR 2.302(B)(1); Cabrera, 265 Mich. App. at
406.

       Affirmed.

                                                            /s/ Jane M. Beckering
                                                            /s/ Mark J. Cavanagh
                                                            /s/ Michael F. Gadola

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