Court Opinion

ID: 7960363
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:36:34.374349+00
Date Added: 2024-06-11T16:34:25.040897
License: Public Domain

Jansen, P.J.
(concurring in part and dissenting in part). I respectfully dissent from the majority’s decision to reverse the grant of summary disposition regarding the equitable subrogation claim. Unlike the majority, I do not believe that plaintiff has stated a claim based on equitable subrogation. I agree with the majority that the remainder of plaintiff’s claims for breach of fiduciary duty, breach of contract, and negligence should be dismissed for the reasons set forth in the majority’s opinion. Therefore, I would affirm the trial court’s decision to grant summary disposition in defendants’ favor in its entirety.
Equitable subrogation is a legal fiction through which a person who pays a debt for which another is primarily responsible is substituted or subrogated to all the rights and remedies of the other. Commercial Union Ins Co v Medical Protective Co, 426 Mich 109, 117; 393 NW2d 479 (1986). In other words, equitable subrogation permits one party to stand in the shoes of another. Atlanta Int'l Ins Co v Bell, 438 Mich 512, 521-522; 475 NW2d 294 (1991). However, the subrogee acquires no greater *208rights than those possessed by the subrogor, and the subrogee may not be a mere volunteer. Commercial Union Ins Co, supra, p 117.
The doctrine of equitable subrogation has been applied to permit excess insurers to sue primary insurers as equitable subrogees of the insured in some circumstances. Id., p 112. It has also been applied to prevent the inequitable assumption of liability by one insurer when a second insurer also has a legal obligation to the insured. Auto Club Ins Ass’n v New York Life Ins Co, 440 Mich 126; 485 NW2d 695 (1992). Under this doctrine, an insurance company has been permitted to bring a legal malpractice claim against an attorney it had retained for its insured. Atlanta Int'l Ins Co, supra.
In the present case, I find that the trial court correctly held that plaintiff, individually, cannot maintain an action under the doctrine of equitable subrogation because she volunteered payment and petitioned the bankruptcy court to compel the trustee to accept the payment. Plaintiff was not obligated to pay the other creditors herself. As a volunteer, equitable subrogation is not available to plaintiff. Commercial Union Ins Co, supra. Accordingly, the trial court did not err in holding that plaintiff failed to state a claim for equitable subrogation. MCR 2.116(C)(8).
I would also find that the trial court properly ruled that the Beaty estate cannot maintain an action under the doctrine of equitable subrogation. As the trial court noted, the creditors and the trustee do not share merged interests in the management of the bankruptcy estate. I agree with the majority that the trustee’s fiduciary duty is owed to the bankruptcy estate and its best interests, not to the individual creditors or shareholders of the *209estate. Further, the creditors do not share any ties to the trustee’s attorney. Thus, I do not believe that Beaty’s estate should be able to "stand in the shoes” of the trustee to enforce the trustee’s fiduciary duty owed to the bankruptcy estate. The two parties, Beaty’s estate and the bankruptcy estate, simply do not share the same interests. Compare Atlanta Int’l Ins Co, supra, pp 521-524, with Auto Club Ins Ass’n, supra, pp 132-138.
Further, I find the majority’s opinion to be inherently contradictory. The majority holds that the trustee’s attorney has a duty to the bankruptcy estate and that the duty does not extend to the creditors or shareholders. Specifically, the majority holds that the trustee’s attorney owed no duty and assumed no duty to plaintiff or Beaty’s estate. Yet the majority allows plaintiff, as the representative of the Beaty estate, to stand in the shoes of the trustee to maintain a cause of action against the trustee’s attorney. If the trustee’s attorney does not owe a duty to the creditors or shareholders and does not owe a fiduciary duty to plaintiff or Beaty’s estate, I fail to see how plaintiff (a shareholder) has stated a claim under the doctrine of equitable subrogation.
The mere fact that the trustee’s attorney was from the same law firm as the trustee should not be the deciding factor in this case. The trustee owes a fiduciary duty to the bankruptcy estate and the duties of the trustee’s attorney are essentially the same. Thus, I do not believe that plaintiff should be allowed to stand in the shoes of the trustee to bring a claim against the trustee’s attorney with respect to the Beaty estate only. If plaintiff was pursuing a claim on behalf of the bankruptcy estate, then such an action might be permissible because the trustee’s attorney does owe a duty to the entire bankruptcy estate. However, *210that is not the case here where plaintiff is pursuing a claim solely on behalf of the Beaty estate.
Accordingly, I conclude that the trial court did not err in granting summary disposition in defendants’ favor of all the claims in plaintiff’s complaint. I would affirm.