Court Opinion

ID: 4486829
Source: CourtListenerOpinion
Date Created: 2020-01-17 10:06:20.615918+00
Date Added: 2024-06-11T15:04:11.901546
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

KENNETH LONEY and FAITH CRAWFORD-                                   UNPUBLISHED
LONEY,                                                              January 16, 2020

               Plaintiffs-Appellants,

v                                                                   No. 345655
                                                                    Wayne Circuit Court
STEVEN T. SLEEVA and DONALD PARKER,                                 LC No. 16-013693-NI

               Defendants,

and

GEICO INDEMNITY COMPANY,

               Defendant-Appellee.

Before: RIORDAN, P.J., and SAWYER and JANSEN, JJ.

PER CURIAM.

        Plaintiffs appeal as of right the trial court’s order granting summary disposition in favor
of defendant, Geico Indemnity Company (Geico), pursuant to MCR 2.116(C)(10) with respect to
plaintiffs’ claims for underinsured motorist coverage under their no-fault insurance policy with
Geico. We affirm.

                                            I. FACTS

       Plaintiffs purchased a no-fault insurance policy from Geico in 2013. Plaintiffs requested
the same coverage that they had under their former policy with another insurer, which included
both uninsured motorist (UM) liability coverage and underinsured motorist (UIM) liability
coverage. Plaintiffs allege that Geico’s agents orally informed them that its policy provided the
same coverage, including both UM and UIM coverage. The declarations page for the policy
issued by Geico stated that it provided UM coverage with a limit of $250,000 per person and
$500,000 per occurrence. The policy also provided the following definition of “uninsured auto”:

                                                -1-
               Uninsured auto is a motor vehicle which has no bodily injury liability
       bond or insurance policy applicable with liability limits complying with the
       financial responsibility law of the state in which the insured auto is principally
       garaged at the time of an accident. This term also includes an auto whose insurer
       is or becomes insolvent or denies coverage.

               The term uninsured auto does not include:

               (a) An insured auto . . . .

The policy also contained a merger clause that states: “This policy, along with the application
and declaration sheet, embodies all agreements relating to this insurance. The terms of this
policy cannot be changed orally.” Plaintiffs continued to renew Geico’s policy every six months
and the policy was in effect in January 2016, when plaintiffs were involved in an auto accident.

        On January 24, 2016, plaintiffs’ vehicle was struck from behind by a vehicle owned and
operated by defendant Steven Sleeva. Plaintiffs brought a third-party action against Sleeva,
alleging that they sustained serious impairment of body functions or permanent serious
disfigurement in the accident, MCL 500.3135. Sleeva was insured under a no-fault policy, but
his policy provided only the statutory minimum limits of liability coverage of $20,000 per person
and $40,000 per accident. MCL 257.520b(2); MCL 500.3009(1). After the accident, plaintiffs
contacted Geico regarding UIM coverage. Geico’s agents orally informed plaintiffs in recorded
telephone calls that UM and UIM coverages were combined in the policy. However, Geico
subsequently denied that its policy provided UIM coverage. In an amended complaint, plaintiffs
brought claims against Geico to recover UIM benefits under theories of breach of contract,
promissory estoppel, fraud, and negligent misrepresentation.

        Plaintiffs stipulated to dismiss their claims against Sleeva in exchange for payment of the
policy limits under Sleeva’s policy. Geico filed a motion for summary disposition with respect
to plaintiffs’ claims for UIM coverage. The trial court ruled that Geico’s policy was not
ambiguous and did not provide UIM coverage, and that plaintiffs could not rely on theories of
promissory estoppel, fraud, or negligent misrepresentation to obtain this coverage. Accordingly,
the court granted Geico’s motion pursuant to MCR 2.116(C)(10). This appeal followed.

                                  II. STANDARD OF REVIEW

        This Court reviews de novo a trial court’s decision on a motion for summary disposition
under MCR 2.116(C)(10). Johnson v Vanderkooi, 502 Mich 751, 761; 918 NW2d 785 (2018).
“In reviewing a motion brought under MCR 2.116(C)(10), we review the evidence submitted by
the parties in a light most favorable to the nonmoving party to determine whether there is a
genuine issue regarding any material fact.” Cuddington v United Health Servs, Inc, 298 Mich
App 264, 270; 826 NW2d 519 (2012). “A genuine issue of material fact exists when the record,
giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which
reasonable minds might differ.” Maurer v Fremont Ins Co, 325 Mich App 685, 707; 926 NW2d
848 (2018) (quotation marks and citation omitted). Issues concerning the interpretation of an
insurance policy, including whether contract language is ambiguous, are also reviewed de novo.

                                                -2-
Royal Prop Group, LLC v Prime Ins Syndicate, Inc, 267 Mich App 708, 713-714; 706 NW2d
426 (2005).

                                 III. BREACH OF CONTRACT

        Plaintiffs argue that the trial court erred by ruling that the Geico insurance policy was not
ambiguous and by ignoring extrinsic evidence that showed that UIM coverage was intended to
be included within the scope of UM coverage available under the policy. We disagree.

        “The Insurance Code has various requirements detailing the benefits that Michigan
automobile insurance policies must provide . . . .” Bazzi v Sentinel Ins Co, 502 Mich 390, 399;
919 NW2d 20 (2018). However, “[n]either uninsured motorist (UM) coverage nor UIM
coverage is required by Michigan law, and therefore the terms of coverage are controlled by the
language of the contract itself, not by statute.” Andreson v Progressive Marathon Ins Co, 322
Mich App 76, 84; 910 NW2d 691 (2017) (quotation marks and citation omitted). Insurance
policies are contracts and are subject to the same contract construction principles that apply to
any other species of contract. Rory v Continental Ins Co, 473 Mich 457, 461; 703 NW2d 23
(2005). “The primary rule in contract interpretation is to ascertain the parties’ intent.” Gurski v
Motorists Mut Ins Co, 321 Mich App 657, 666; 910 NW2d 385 (2017). “If the contractual
language is unambiguous, courts must interpret and enforce the contract as written because an
unambiguous contract reflects the parties’ intent as a matter of law.” Id. Courts must “read the
policy as a whole, giving meaning to each term and giving each term its plain and ordinary
meaning.” Wagner v Farm Bureau Mut Ins Co of Mich, 321 Mich App 251, 258; 908 NW2d
327 (2017). “When contract language is clear, unambiguous, and has a definite meaning, courts
do not have the ability to write a different contract for the parties, or to consider extrinsic
testimony to determine the parties’ intent.” Auto-Owners Ins Co v Campbell-Durocher Group
Painting and Gen Contracting, LLC, 322 Mich App 218, 225; 911 NW2d 493 (2017). “[C]ourts
cannot simply ignore portions of a contract in order to avoid a finding of ambiguity or in order to
declare an ambiguity.” Klapp v United Ins Group Agency, Inc, 468 Mich 459, 467; 663 NW2d
447 (2003).

         The Geico policy is unambiguous. The declarations page states that it provides UM
coverage to the limit of $250,000 per person and $500,000 per occurrence, but it does not state
that it provides UIM coverage. Moreover, the policy’s definition of “uninsured auto” expressly
states that the term does not include “[a]n insured auto . . . .” Thus, the policy cannot be read as
allowing the UM coverage to apply to an insured auto that is underinsured. Plaintiffs argue that
the policy is ambiguous because it does not contain a definition of “underinsured” motorist, but it
excludes punitive and exemplary damages from “underinsured” coverage. Plaintiffs’ argument
implies that an exclusion in an insurance policy can create a category of coverage, in this case
UIM coverage, that is otherwise omitted in the policy, by stating that the exclusion applies to the
omitted category as well as the included categories. “[E]xclusionary clauses limit the scope of
coverage provided under the insurance contract; they do not grant coverage.” Hawkeye-Security
Ins Co v Vector Constr Co, 185 Mich App 369, 384; 460 NW2d 329 (1990). Disavowing
punitive damages for both UM and UIM coverage does not create UIM coverage that was not
provided in the policy.

                                                 -3-
        Plaintiffs argue that Geico’s online statement describing “uninsured coverage” as
coverage “for injuries caused by motorists who don’t carry sufficient coverage for the extent of
your damages” should be consulted in order to construe the intended meaning of UM coverage
within the policy. However, the online statement is extrinsic evidence that cannot be considered
to alter the terms of the policy because the policy is not ambiguous. Plaintiffs’ reliance on an
online claim form that includes a section for UM and UIM benefits is similarly misplaced
because it too is extrinsic evidence. Because the policy is not ambiguous and there is no genuine
issue of fact regarding whether the terms of the policy provide for UIM coverage, the trial court
properly granted summary disposition for Geico with respect to plaintiffs’ claim for breach of
contact.

   IV. PROMISSORY ESTOPPEL, FRAUD, AND NEGLIGENT MISREPRESENTATION

       Plaintiffs next argue that the trial court erred by also granting summary disposition for
Geico with respect to their claims for promissory estoppel, fraud, and negligent
misrepresentation. We disagree.

        “In order to invoke promissory estoppel, the party relying on it must demonstrate that (1)
there was a promise, (2) the promisor reasonably should have expected the promise to cause the
promisee to act in a definite and substantial manner, (3) the promisee did in fact rely on the
promise by acting in accordance with its terms, and (4) the promise must be enforced to avoid
injustice.” Crown Tech Park v D&N Bank, FSB, 242 Mich App 538, 548-549; 619 NW2d 66
(2000). “A promise is a manifestation of intention to act or refrain from acting in a specific way,
so made as to justify a promise in understanding that a commitment has been made.” Zaremba
Equip, Inc v Harco Nat’l Ins Co, 280 Mich App 16, 41; 761 NW2d 151 (2008) (quotation marks
and citation omitted). “We are to exercise caution in evaluating an estoppel claim and should
apply the doctrine only where the facts are unquestionable and the wrong to be prevented
undoubted.” Novak v Nationwide Mut Ins Co, 235 Mich App 675, 687; 599 NW2d 546 (1999).

        “[W]hen an insurance agent elects to provide advice regarding coverage and policy
limits, the agent owes a duty to exercise reasonable care. The insured has a duty to read its
insurance policy and to question the agent if concerns about coverage emerge.” Zaremba Equip,
280 Mich App at 36. “[T]he law applied in Michigan leaves no room to doubt that as a general
rule, an insured must read his or her insurance policy.” Id. at 29. “This court has many times
held that one who signs a contract will not be heard to say, when enforcement is sought, that he
did not read it, or that he supposed it was different in its terms.” Id.

        Geico’s declarations page indicated that plaintiffs had only UM coverage, not UIM
coverage, and the written policy’s definition of “uninsured auto” expressly excluded insured
autos. Consequently, it was not reasonable for plaintiffs to rely on Geico’s agents’ oral
representations that the policy included UIM coverage. Plaintiffs received their first written
policy in 2013, and they periodically renewed it until the time of their accident in January 2016.
Accordingly, there is no genuine issue of material fact that plaintiffs had a reasonable
opportunity to review the policy and should have been aware that it did not provide UIM
coverage. Thus, they could not reasonably continue to rely on any prior oral statements to
expand the scope of coverage unambiguously stated in the policy. For this reason, plaintiffs’
fraud claim fails. Barclae v Zarb, 300 Mich App 455, 476; 834 NW2d 100 (2013) (“[c]ommon-

                                                -4-
law fraud or fraudulent misrepresentation entails a defendant making a false representation of
material fact with the intention that the plaintiff would rely on it, the defendant either knowing at
the time that the representation was false or making it with reckless disregard for its accuracy,
and the plaintiff actually relying on the representation and suffering damage as a result” and “[a]
claim for negligent misrepresentation requires plaintiff to prove that a party justifiably relied to
his detriment on information prepared without reasonable care by one who owed the relying
party a duty of care”).

        Additionally, plaintiffs’ claim of negligent misrepresentation fails because plaintiffs’
evidence does not establish that Geico’s agent undertook any duty by going beyond presenting
the product and taking plaintiffs’ order. Zaremba Equip, 280 Mich App 16 (an insurance agent
whose principal is the insurance company owes no duty to advise a potential insured about any
coverage because the agent’s job consists merely of presenting the product of his principal and
taking orders as can be secured from those who want to purchase the coverage offered).
Viewing the evidence in a light most favorable to plaintiffs, Geico’s agents orally informed
plaintiffs that Geico’s policy provided the same coverage that plaintiffs had with their prior
insurer, including UIM coverage. Moreover, even if Geico’s agents negligently misrepresented
that its policy provided the same coverage that plaintiffs had under their old policy, once
plaintiffs received the written policy and had a reasonable time to review it, they should have
discovered that it unambiguously did not provide UIM coverage. Thus, they were not justified in
continuing to believe that the policy provided UIM coverage, particularly when they continued to
renew the policy thereafter. Consequently, Geico was entitled to summary disposition with
respect to plaintiffs’ claim for negligent misrepresentation.

                              V. FRAUD IN THE INDUCEMENT

       Plaintiffs argue that the merger clause in Geico’s policy is voidable because Geico
induced them to purchase the policy through fraud. Fraud in the inducement occurs where a
party materially misrepresents future conduct under circumstances in which the assertions may
reasonably be expected to be relied upon and are relied upon and renders a contract voidable at
the option of the defrauded party. Custom Data Solutions, Inc v Preferred Capital, Inc, 274
Mich App 239, 242; 733 NW2d 102 (2006); Bazzi, 502 Mich at 408. However, as explained
above, plaintiffs’ claims are invalid regardless of the merger clause.

                VI. EVIDENCE CONSIDERED IN SUMMARY DISPOSITION

        Plaintiffs also argue that the trial court’s decision to grant Geico’s motion for summary
disposition was based on improper considerations and an improper assessment of the credibility
of plaintiffs and the agents they spoke to. Plaintiffs rely on the following remarks by the trial
court at the hearing on Geico’s motion:

               THE COURT. But there’s no, I guess I should ask, there’s no phone calls
       before --

               [PLAINTIFF’S COUNSEL]. No, Your Honor, there’s no phone calls
       before, but the –

                                                -5-
               THE COURT. And your guy is an insurance guy, right?

               [PLAINTIFF’S COUNSEL]. Right, but I believe that goes to –

              THE COURT. Not only an insurance guy, but a guy kind of high up that
       does claims and --

              [PLAINTIFF’S COUNSEL]. Your Honor, I don’t believe that’s an
       appropriate consideration for summary disposition.

                                              * * *

              [PLAINTIFF’S COUNSEL]. I mean if you call GEICO, called them right
       now they’d probably tell us it includes underinsured coverage.

               THE COURT. Some lady on, some minimum wage --

         It is well-established that in deciding a motion for summary disposition under MCR
2.116(C)(10), “[t]he trial court is not permitted to assess credibility, weigh the evidence, or
resolve factual disputes, and if material evidence conflicts, it is not appropriate to grant a motion
for summary disposition under MCR 2.116(C)(10).” Pioneer State Mut Ins Co v Dells, 301
Mich App 368, 377; 836 NW2d 257 (2013). However, the trial court’s remarks were extraneous
to its legal analysis. The court acknowledged that it was “troubled by the after-the-fact phone
calls,” but it concluded that the calls do not “change the terms of the policy.” The court also
acknowledged that “probably 99.9% of people don’t” read their policies, but it correctly
observed that “the law in Michigan doesn’t permit an insured to make a recovery of benefits
based upon his or her assumption that their policy contained a non-existent coverage.” These
statements indicate that the trial court’s decision was based on legal principles of elevating clear
and unambiguous policy language over an insured’s subjective beliefs. The trial court did not
determine that plaintiffs’ evidence was unworthy of belief, but that it was ineffective to support
plaintiffs’ claims.

                                        V. CONCLUSION

        The trial court properly granted summary disposition pursuant to MCR 2.116(C)(10).
Plaintiffs’ breach of contract claim fails because the Geico policy was not ambiguous and did not
provide for UIM coverage. Plaintiffs’ claims of promissory estoppel, fraud, or negligent
misrepresentation fail because plaintiffs had ample time to review the Geico policy and should
have been aware that it did not provide UIM coverage. We affirm.

                                                              /s/ Michael J. Riordan
                                                              /s/ David H. Sawyer
                                                              /s/ Kathleen Jansen

                                                -6-