Court Opinion

ID: 4176597
Source: CourtListenerOpinion
Date Created: 2017-06-10 02:18:18.695802+00
Date Added: 2024-06-11T14:38:48.044303
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

HOME-OWNERS INSURANCE COMPANY,                                     FOR PUBLICATION
                                                                   June 8, 2017
              Plaintiff/Counter-Defendant-                         9:05 a.m.
              Appellee,

v                                                                  No. 331260; 332457; 333695
                                                                   Marquette Circuit Court
DOMINIC F. ANDRIACCHI,                                             LC No. 14-052954-CZ

              Defendant/Counter-Plaintiff-
              Appellant.

HOME-OWNERS INSURANCE COMPANY,

              Plaintiff/Counter-Defendant-
              Appellant,

v                                                                  No. 332640
                                                                   Marquette Circuit Court
DOMINIC F. ANDRIACCHI,                                             LC No. 14-052954-CZ

              Defendant/Counter-Plaintiff-
              Appellee.

Before: SAWYER, P.J., and MURRAY and GLEICHER, JJ.

MURRAY, J.

        In Docket No. 331260, defendant/counter-plaintiff Dominic F. Andriacchi appeals as of
right the circuit court order granting plaintiff/counter-defendant Home-Owners Insurance
Company’s motion for summary disposition under MCR 2.116(C)(10) in this declaratory
judgment action regarding whether Home-Owners had a duty to provide insurance coverage for
Andriacchi under a policy that excluded coverage for loss caused by any “earth movement.” In
Docket No. 332457, Andriacchi appeals as of right a subsequent order granting fees and costs to
Home-Owners under MCR 2.625, while in Docket No. 332640, Home-Owners appeals as of
right, and Andraicchi appeals by delayed leave granted, that same order that also denied
Andriacchi’s motion to disqualify the trial judge and determined it to be frivolous, but declined

                                               -1-
to award Home-Owners sanctions under MCR 2.114 and MCL 600.2591. We affirm in part,
vacate in part, and remand for further proceedings.

                               I. FACTS AND PROCEEDINGS

        Home-Owners provided a “businessowners policy” of insurance to Andriacchi with
effective dates of June 1, 2013, through June 1, 2014. The policy covered risks of physical loss
unless the loss was “[e]xcluded in Section B., Exclusions” or “[l]imited in Paragraph A.4.,
Limitations.” On March 1, 2014, Andriacchi sought coverage under the policy for damages to
his building that occurred after a major street repair had taken place. A licensed professional
engineer retained by Home-Owners determined that “[e]arth movement beneath the interior
concrete floor slab has resulted in the observed structural damage at the subject law offices
building.” The preliminary engineering report stated:

       This earth movement resulted in the subsidence of supporting soils and interior
       concrete floor slab. The perimeter footings appear stable and undisturbed.

                                            * * *

       Supporting soils usually do not move and subside under older structures; any
       subsidence usually appears shortly after construction. However, a major
       infrastructure/street project that required long periods of dewatering and
       construction vibration was just completed per the insured. The interaction of
       original site soil preparation, fill quality, placement, and compaction under the
       interior concrete slab with recent dewatering and construction activity combined
       to create the recent earth movement event.

The claim was denied pursuant to an exclusion to coverage in Section B for “[a]ny earth
movement.” Home-Owners thereafter sought a declaration that it owed no duty to cover
Andriacchi’s losses because the losses were excluded under the policy.

        Home-Owners eventually filed a motion for summary disposition under MCR
2.116(C)(8), (C)(9), and (C)(10), arguing that the language of the exclusion barring coverage for
losses resulting from “any earth movement” is clear and unambiguous and fell squarely within
the acknowledged operative facts of Andriacchi’s loss. Home-Owners sought summary
disposition on its declaratory judgment claim as well as on Andriacchi’s counterclaims, and
requested costs and attorney fees under MCR 2.114.

        In response, Andriacchi maintained that the earth movement exclusion in the policy
applied only to natural earth movement, not to “man-made” earth movement. He contended that
the words “any earth movement” must be read in context with those that surround them and,
therefore, the exclusion was limited in application to natural phenomena; in the alternative,
Andriacchi maintained that the exclusion was subject to more than one reasonable interpretation
and was, therefore, ambiguous. Andriacchi sought summary disposition under MCR 2.116(I)(2),
and requested damages in the amount of $92,100 to repair his damaged property, statutory
interest, prejudgment interest, and actual attorney fees and costs.

                                               -2-
        The trial court held a hearing on the motion and, following the parties’ arguments,
concluded that “[a]ny earth movement means any earth movement. And I don’t need Latin rules
of statutory construction to turn that into anything else other than what it says.” The trial court
thereafter entered an order granting Home-Owners’s motion for summary disposition on the
basis “that [Home-Owners] has no duty to provide coverage for [Andriacchi’s] losses” and
dismissing Andriacchi’s counterclaim.

       Andriacchi thereafter filed a motion to disqualify the trial judge “for ex parte
communication and bias” as a result of the court’s reading of Home-Owners’s reply brief that he
had apparently not received before the hearing, and purported bias against him. The trial court
denied the motion to disqualify, stating:

       I’m denying the motion for a disqualification.           I’m finding that the
       communication—so called communication or reply brief, which was
       accompanied by a proof of service, and not—Mr. Andriacchi is not objecting to
       the proceeding, and gave a nine- or ten-minute argument without benefit of the
       reply brief, and I’m not sure the reply brief would have helped him because it
       didn’t change anything about what the plaintiff was arguing. So I’m finding that
       it was not an ex parte communication.

               . . . And the court rule has a 14-day window there for good reason.
       Number one, I don’t think I’ve shown any bias or prejudice. Number two, as Mr.
       Smith pointed out, it’s disingenuous to wait until you get an adverse ruling on a
       substantive motion, and then to raise all of these prejudicial allegations, going
       back to when the case was filed. But I allowed Mr. Andriacchi to make a record
       on all of those perceived—he calls it scolding or evidence of prejudice. I think
       he’s made a sufficient record.

              But to the extent that they go back more than 14 days from the filing of his
       motion, they’re denied for that reason. They’re also denied because I don’t
       believe they’re prejudicial. I was trying to provide some guidance.

       The State Court Administrator assigned Judge Charles Goodman to review the motion for
disqualification. After a hearing, Judge Goodman issued a detailed order affirming the denial of
the motion to disqualify the trial judge, finding that “[t]he record before this Court shows no
evidence of favoritism, prejudice, bias or improper conduct on the part of” the trial judge.

        After Andriacchi filed his claim of appeal, Home-Owners filed a motion to tax attorney
fees and costs under MCR 2.114, MCR 2.625, and MCL 600.2591, in the amount of $18,694.43.
Home-Owners requested costs and fees under MCR 2.114 and MCL 600.2591, for Andriacchi
having filed a frivolous defense, counterclaim, and motion to disqualify, and costs under MCR
2.625, for prevailing on the motion for summary disposition. In response, Andriacchi argued
that his position was not frivolous due to the lack of Michigan precedent, and that Home-Owners
was entitled at most to $20 in costs for the summary disposition motion, and disputed the
remainder of the costs requested.

                                                -3-
       At a subsequent hearing, Home-Owners conceded that it was not entitled to a $150
charge for statutory costs for proceeding to trial, as there was no trial. The trial court then ruled:

               I’ve never awarded costs—actual attorney fees. I . . . came very close in
       this case, but I am not going to award them. I . . . am, frankly, uncomfortable
       awarding fees to a party defending my disqualification.

               And with respect to attorney fees on the underlying claim, I did grant a
       motion for summary disposition. I believe that the law is clear, but that Mr.
       Andriacchi was making an effort to establish Michigan precedent to the contrary
       on that . . . policy language.

                                               * * *

               I’m . . . finding that the statutory costs [under MCR 2.625], Mr. Smith, of
       course, can be imposed.

       The trial judge clarified that Andriacchi’s motion to disqualify was frivolous pursuant to
MCR 2.114 and MCL 600.2591, and then entered an order and judgment (1) denying Home-
Owners’s motion “for violation of MCR 2.114 and MCL 600.2591 regarding the defense of the
coverage issue” for reasons stated on the record, and (2) finding the defense motion to disqualify
the judge to be frivolous pursuant to MCR 2.114 and MCL 600.2591, but declining to award
costs and attorney fees. A second order and judgment was entered granting Home-Owners’s
motion to tax costs pursuant to MCR 2.625, in the amount of $821.76.1

                                          II. ANALYSIS

    A. DOES THE EXCLUSION APPLY ONLY TO NATURAL EARTH MOVEMENTS?

       For the reasons explained below, we hold that the trial court properly granted Home-
Owners’s motion for summary disposition because the earth movement exclusion plainly
excluded coverage for loss caused by “any” earth movement, and there is no material factual
dispute that Andriacchi’s loss was caused by earth movement.

       Because the trial court considered documentary evidence in granting the motion for
summary disposition, we review the trial court’s order as one granted pursuant to MCR
2.116(C)(10). See Cuddington v United Health Servs, Inc, 298 Mich. App. 264, 270; 826 NW2d
519 (2012). Summary disposition is appropriate under MCR 2.116(C)(10) if “there is no
genuine issue as to any material fact, and the moving party is entitled to judgment . . . as a matter
of law.” In conducting the de novo review, this Court construes the affidavits, pleadings,
depositions, admissions, and other documentary evidence submitted by the parties in a light most

1
  This Court granted defendant’s motion for stay pending resolution of the appeal in an order
entered on May 2, 2016.

                                                 -4-
favorable to the non-moving party. Liparoto Constr, Inc v Gen Shale Brick, Inc, 284 Mich. App.
25, 29; 772 NW2d 801 (2009).

       Home-Owners does not dispute that it insured Andriacchi’s property with an “all-risk”
policy. “Notwithstanding the presence of an ‘all-risks’ provision in an insurance policy, the loss
will not be covered if it comes within any specific exclusion contained in the policy.” 10A
Couch, Insurance, 3d, § 148.68, p 164. Here, the policy provides for various exclusions, of
which one, the earth movement exclusion, is the focus of the parties. The exclusion provides, in
pertinent part:

       B. EXCLUSIONS

       1. We will not pay for loss or damage caused directly or indirectly by any of the
       following. Such loss or damage is excluded regardless of any other cause or
       event that contributes concurrently or in any sequence to the loss.

                                             * * *

               b. Earth Movement.

                (1) Any earth movement (other than sinkhole collapse), such as an
       earthquake, landslide or earth sinking, rising or shifting. But if loss or damage by
       fire or explosion results, we will pay for that resulting loss or damage.

The interpretation of this particular insurance contract clause appears to be a question of first
impression in this state. Andriacchi takes the position that the exclusion is ambiguous and must
be construed to apply only when the earth movement occurs due to natural, as opposed to man-
made, causes. Home-Owners takes the opposite view, contending that the exclusion is
unambiguous and covers earth movement, whether natural or man-made.

        “[I]n reviewing an insurance policy dispute [courts] must look to the language of the
insurance policy and interpret the terms therein in accordance with Michigan’s well-established
principles of contract construction,” the predominant rule being that “an insurance contract must
be enforced in accordance with its terms.” Henderson v State Farm Fire & Cas Co, 460 Mich.
348, 353-354; 596 NW2d 190 (1999). Courts will “look to the plain language of the insurance
policy in determining the scope of coverage . . . .” Busch v Holmes, 256 Mich. App. 4, 9; 662
NW2d 64 (2003). Although a court strictly construes exclusions in favor of an insured, Auto-
Owners Ins Co v Churchman, 440 Mich. 560, 567; 489 NW2d 431 (1992), “[c]lear and specific
exclusions must be given effect,” and “coverage under a policy is lost if any exclusion within the
policy applies to an insured’s particular claims,” Holmes, 256 Mich. App. at 9. “Respect for the
freedom to contract entails that we enforce only those obligations actually assented to by the
parties.” Wilkie v Auto-Owners Ins Co, 469 Mich. 41, 63; 664 NW2d 776 (2003). A court cannot
rewrite a contract if its terms are expressly stated. McDonald v Farm Bureau Ins Co, 480 Mich.
191, 197; 747 NW2d 811 (2008).

       Again, the earth movement exclusion refers to “any earth movement.” The word “any” is
not defined in the insurance policy, “but is commonly understood to be all-encompassing,
meaning ‘every’ or ‘all,’ and can be ‘used to indicate one selected without restriction’ or ‘to

                                               -5-
indicate a maximum or whole.’ ” Ionia Ed Ass’n v Ionia Pub Sch, 311 Mich. App. 479, 486; 875
NW2d 756 (2015), quoting Merriam-Webster’s Collegiate Dictionary (11th ed). Thus, “any
earth movement” means “every” or “all” movement of the earth without restriction or distinction
as to the type (i.e., natural or man-made).

         Relying on the doctrine of ejusdem generis, Andriacchi argues that the term “earth
movement” is constricted by the words of limitation, “such as.” Because the exclusion only
identifies natural events—“earthquake, landslide or earth sinking, rising or shifting”—
Andriacchi argues that the term “earth movement” is limited to naturally occurring events.
Reliance on the doctrine is misplaced. Under the ejusdem generis doctrine, “when a general
word or phrase follows a list of specifics, the general word or phrase will be interpreted to
include only items of the same class as those listed.” Black’s Law Dictionary (10th ed).2 But as
the trial court recognized, that doctrine (nor, for that matter, any other canon of statutory
interpretation) does not apply where the language of the contract is clear, see, e.g., Utica State
Savings Bank v Village of Oak Park, 279 Mich. 568, 573; 273 N.W. 271 (1937), as is the case
here. Further, the phrase “such as” conveys that the cited examples are not all-inclusive or
restrictive in nature, and thus does not serve to narrow the types of earth movement excluded
under the policy. Moreover, the cited examples of earth movement are not only caused by
natural phenomena. For example, landslides can occur naturally or be caused by man, as can the
“sinking, rising or shifting” of the earth.

       Andriacchi relies on a Michigan Institute of Continuing Legal Education (ICLE) treatise
and foreign authority in support of his argument that the exclusion is capable of two or more
reasonable constructions and is, therefore, ambiguous. He cites Michigan Insurance Law and
Practice, which provides as follows:

       Earth movement. The earth movement exclusion applies only to naturally
       occurring phenomena such as earthquake; landslide; mine subsidence; earth
       sinking, rising, or shifting; and volcanic eruption or explosion. The exclusion
       does not apply to earth movement caused by non-natural means. [Fabian,
       Michigan Insurance Law and Practice, ch 10, § 10.89, p 407.]

The authors, however, provide no authority in support of this statement. But they do
appropriately recognize that, in insurance cases, what is dispositive is the actual language used in
the policy, which can vary between insurers:

       This chapter is a basic summary of property insurance based on the ISO
       [Insurance Services Office, Inc.] forms, which are the most common forms used
       by insurance companies. The practitioner should be aware that many insurers, if
       not most, have modified many of the ISO forms and issue insurance policies that
       contain different language and requirements than the ISO forms. Therefore, the

2
 This canon also applies to statutes like this one, where the general word or phrase is followed
by specific examples. See Huggett v Dep’t of Natural Resources, 464 Mich. 711, 718; 629
NW2d 915 (2001).

                                                -6-
       authors urge all readers to thoroughly review each policy of insurance before
       reaching any conclusions about the duties of the parties or the coverages afforded
       and to not assume that the policy of insurance provides the same coverages and
       duties as the ISO forms. [Id. at § 10.1, p 347.]

        Of the foreign authority3 cited by Andriacchi in support of his argument that the earth
movement exclusion is ambiguous, only three cases involve an earth movement exclusion that
contains language similar to the instant exclusion. Rankin v Generali-US Branch, 986 S.W.2d
237, 237 (Tenn App, 1998), involved a virtually identical exclusion. There, the front basement
wall of a building partially collapsed and was damaged as the result of heavy machinery parked
near the building. Id. The owner of the building sought coverage under his insurance policy, but
the insurance company denied coverage in part under the earth movement exclusion, id., which
excluded coverage for “ ‘[a]ny earth movement (other than sinkhole collapse), such as an
earthquake, landslide, mine subsidence or earth sinking, rising or shifting,’ ” id. at 239. The
court reviewed the exclusion and determined that because the exclusion included the terms
“earthquake,” “mine subsidence,” and “landslide,” all naturally occurring events, it is “ ‘apparent
that the policy is intended to exclude only “occasional major disasters” . . . rather than “human
action . . . occurring within the immediate vicinity of the damage.” ’ ” Id., quoting Winters v
Charter Oak Fire Ins Co, 4 F Supp 2d 1288, 1293 (D NM, 1988), quoting Wyatt v Northwestern
Mut Ins Co of Seattle, 304 F Supp 781, 783 (D Minn, 1969). The court ultimately held that the
earth movement exclusion did not preclude coverage. Id. at 240.

        In Winters, another often-cited case on this issue, a waterline broke in the insured’s
clubhouse, causing subsequent shifting of the soil beneath the building, leading to structural
damage. Winters, 4 F Supp 2d at 1290. The insurer contended that the damage fell within the
exclusion for “ ‘[a]ny earth movement (other than sinkhole collapse), such as an earthquake,
mine subsidence, landslide, or earth sinking, rising or shifting.’ ” Id. at 1292. The Winters court
concluded, based on the construction of the term “earth movement” in United Nuclear Corp v
Allendale Mut Ins Co, 103 NM 480; 709 P2d 649 (1985), that “earth movement” includes only
naturally occurring phenomena. Winters, 4 F Supp 2d at 1291. The policy provision at issue in
United Nuclear, however, was not precisely the same as the earth movement exclusion in
Winters. In United Nuclear, 103 NM at 482, the policy provided coverage for “[c]ollapse of
buildings . . . , except that there shall be no liability for loss or damage caused by or resulting
from flood, earthquake, landslide, subsidence or any other earth movement.” The term “any
other earth movement” was a general term following a list of specific terms. The United Nuclear

3
  Andriacchi also cites Powell v Liberty Mut Fire Ins Co, 127 Nev 156, 159 (2011) (policy
excluded loss due to “Earth movement”); Fayad v Clarendon Nat’l Ins Co, 899 So2d 1082, 1084
(Fla, 2005) (policy excluded “Earth movement”); Murray v State Farm Fire & Cas Co, 203 W
Va 477, 484 (1998) (first policy excluded loss caused by “Earth movement, including, but not
limited to . . .” ; second policy excluded loss due to “Earth movement” that “includes but is not
limited to . . .”); Peters Twp Sch Dist v Hartford Accident & Indemnity Co, 833 F2d 32 (CA 3,
1987) (policy excluded loss due to “earth movement, including but not limited to . . .”).

                                                -7-
court applied the doctrine of ejusdem generis to the term “earth movement” and construed it to
cover only naturally occurring phenomena. Id. at 483-484.

        In Wyatt, 304 F Supp at 782, the insurance company denied coverage under a
homeowners’ policy for damage to a house caused by excavation work on an adjacent property.
The insurance company denied coverage under the earth movement exclusion “for loss caused
by, resulting from, contributed to or aggravated by any earth movement, including but not
limited to earthquake, landslide, mud flow, earth sinking, rising or shifting; unless loss by fire or
explosion ensues, and this Company shall then be liable only for such ensuing loss . . . .” Id.

        The homeowners argued that this provision was meant to exclude damage from “natural
causes and natural phenomena” and that “where the proximate and efficient cause of damage
definitely is the action of a third-party, this exclusion does not apply even though the actions of
such third-party may incidentally have caused some ‘earth movement.’ ” Id. at 782-783. They
reasoned that the purpose of the exclusion was to relieve insurers from unpredictable “major
disasters” that cause widespread damage. Id. at 783.

       In resolving the issue, the Wyatt court looked to other provisions in the policy that it said
gave force to the view that the exclusion was not intended to cover “ ‘earth movement’
occurr[ing] under a single dwelling, allegedly due to human action of third persons in the
immediate vicinity of the damage.” Id. The “other” provisions excluded losses from “floods,
tidal waves, a back up of water below the surface, changes in temperature and changes in the
law,” and the court noted that “[a]ll of these are phenomena likely to affect great numbers of
people when they occur.” Id.

       At no time did the Wyatt court discuss the specific language in the policy and whether the
words were ambiguous. Instead, the court announced its “interpretation” wholly apart from the
express policy terms, which it then said created ambiguity in the exclusionary language. Id. at
783-784. However, the court did not conclude from the types of earth movement set forth in the
exclusion that it was limited to “natural phenomena.” Rather, the court reached a much more
narrow holding, i.e., that the exclusion did not cover what occurred in the case where the policy
covered the acts of others:

       Certainly not all earth movements, or at least those where some human action
       causes such are included in the exclusion. If this interpretation creates an
       ambiguity in the language then it is necessary to decide what earth movements
       were intended to be covered. The class cited in the exclusionary clause is
       therefore held, if not limited to natural phenomena, at least not to exclude
       coverage in the case at bar.

              There is no dispute that the policy here involved covers acts of others than
       the owner. [Id. at 783.]

        Home-Owners has, of course, found authority interpreting earth movement exclusions
using language similar to the exclusion at hand, but reaching results more palatable to its view.
In Stewart v Preferred Fire Ins Co, 206 Kan 247; 477 P2d 966 (1970), the plaintiff’s house sunk
into a pre-existing cavern or shaft area of a mining operation after soil under and around the

                                                -8-
foundation gave way. Id. at 248. The insurance policy excluded “ ‘loss caused by, resulting
from, contributed to or aggravated by any earth movement, including but not limited to
earthquake, landslide, mud flow, earth sinking, rising or shifting[.]’ ” Id. at 248. In challenging
the denial of the claim based on the earth movement exclusion, the plaintiff argued that the
language was ambiguous and urged the court to apply the ejusdem generis doctrine to find that
“the enumerated events, earthquake, landslide and earth sinking are all events which have their
origin in nature, are ‘acts of God . . . .’ ” Id. at 249.

       The court declined to apply the doctrine because it found the policy was not ambiguous:

       Before the rule of ejusdem generis can be applied the clause must be ambiguous.
       The term ‘earth movement’ taken in its plain, ordinary and popular sense means
       any movement of earth whether it be up, down or sideways. The words
       ‘earthquake, landslide, mud flow’ and the term ‘earth sinking, rising or shifting’
       all refer to vertical or horizontal movements of earth or soil, wet and dry. We fail
       to see how the exclusionary clause can be considered ambiguous. The words used
       may not reasonably be understood to have two or more possible meanings. [Id. at
       249-250 (citations omitted).]

        The Stewart court also observed that, even if it were to apply the ejusdem generis
doctrine, this still would not lead to the narrow construction suggested by the plaintiff. It stated:
“[W]e cannot agree that landslides, mud flows, earth sinking, rising or shifting are natural
phenomena or ‘acts of God’. . . . For the most part the events enumerated in the exclusionary
clause originate from the negligence or carelessness of man in failing to follow proper
conservation practices.” Id. at 250. Thus, “[w]hen earthquakes, which fall within the legal
definition of an ‘act of God’, are included along with landslides, mud flows and earth sinking
there is no apparent basis for the restriction urged by appellants under the rule of ejusdem
generis.” Id.

       In Century Park East Homeowners Ass’n v Northbrook Prop & Cas Ins Co, 21 F Appx
708, 708 (CA 9, 2001), the plaintiff brought an action against the insurer to recover for damages
to a building caused by sinking of a slab. Like the policy in the present case, the insurance
policy contained an exclusion for “any earth movement” and a list of examples prefaced by the
phrase “such as.” Id. at 709. The court concluded that the plain language of the “unqualified
phrase ‘any earth movement’ includes all types of movement, both sudden and sluggish
movement, and both natural and artificial movement.” Id. The court also held that “[t]he
additional ‘such as’ language does not serve to limit that.” Id. The court recognized that a
policy provision that is capable of two or more constructions, both of which are reasonable, will
be deemed ambiguous, but that “that certainly does not mean that a provision is ambiguous
simply because a court, somewhere, has deemed it so.” Id.

       The cases cited by the parties contain, for the most part, reasonable interpretations of
those varying earth movement exclusions. Indeed, it is not unreasonable to read some of these
exclusions as limited to naturally occurring events. But we cannot read the exclusion at issue in
such a limited manner. For, as already discussed, the exclusion here applies to “any” earth
movement, revealing that the parties clearly intended that coverage would not apply for any earth

                                                -9-
movement, be it the result of natural phenomena or the upshot of human activities. The trial
court’s conclusion that the exclusion applied to this damage was correct.

        Further supporting this conclusion is the lead-in clause. As noted earlier, that clause
states that any loss or damage caused by an earth movement “is excluded regardless of any other
cause or event that contributes concurrently or in any sequence to the loss.” This lead-in phrase,
in conjunction with the broad earth movement provision, reinforces the notion that the exclusion
applies to any earth movement, because the exclusion applies even if it occurs in part because of
a concurrent cause or event. See, e.g., One Place Condo LLC v Traveler’s Prop Cas Co,
unpublished opinion of the United States District for the Northern District of Illinois, issued
October 6, 2014 (No. 11C2520); Gillin v Universal Underwriters Ins Co, unpublished opinion of
the United States District Court for the Eastern District of Pennsylvania, issued March 4, 2011
(No. 09-5855). And there is certainly no limitation on what can cause the concurrent cause or
event. Hence, as these and other courts have recognized, the plain language of the lead-in clause
makes clear that the exclusion applies regardless of whether it occurs because of a concurrent
event or cause, including a manmade occurrence.

                                     B. COSTS AND FEES

        This Court reviews for an abuse of discretion the trial court’s ruling on a motion to tax
costs under MCR 2.625. Guerrero v Smith, 280 Mich. App. 647, 670; 761 NW2d 723 (2008).
“An abuse of discretion occurs when the decision results in an outcome falling outside the
principled range of outcomes.” Radeljak v DaimlerChrysler Corp, 475 Mich. 598, 603; 719
NW2d 40 (2006). However, whether a particular expense is taxable as a cost is a question of
law. Guerrero, 280 Mich. App. at 670. This Court reviews de novo questions about the correct
interpretation and application of statutes and court rules. Henry v Dow Chem Co, 484 Mich. 483,
495; 772 NW2d 301 (2009); Hess v Cannon Twp, 265 Mich. App. 582, 589; 696 NW2d 742
(2005).

        “Costs will be allowed to the prevailing party in an action, unless prohibited by statute or
by these rules or unless the court directs otherwise, for reasons stated in writing and filed in the
action.” MCR 2.625(A)(1). “The power to tax costs is purely statutory, and the prevailing party
cannot recover such expenses absent statutory authority.” Guerrero, 280 Mich. App. at 670.

        As the prevailing party, Home-Owners sought to tax costs for the following expenses:
(1) $20 for proceedings before trial under MCL 600.2441(2)(a), (2) $20 for the summary
disposition motion under MCL 600.2441(2)(b), (3) $150 for trial under MCL 600.2441(2)(c), (4)
$35.20 for a court reporter fee, (5) a $516.56 expert witness fee under MCL 600.2164, and (6)
$80 for various motion fees under MCL 600.2441. At the hearing, Home-Owners acknowledged
that it could not tax the $150 trial fee. The trial court ruled that Home-Owners could tax
“statutory costs” under MCR 2.625(A), but did not expressly designate the items for which it
allowed costs. It did, however, address Andriacchi’s objections to the itemized invoice appended
to Home-Owners’s motion for attorney fees and costs, which included the same costs as the
January 18, 2016 taxation of costs form with the exception of the removal of the $150 “trial” fee
under MCL 600.2441(2)(c), and the inclusion of a $150 filing fee under MCL 600.2441(2)(c).

                                               -10-
       Andriacchi asserts that the trial court erred by failing to apply MCR 2.625(C) to limit
Home-Owners’s costs to “$0 or, at most, $100” because damages were not awarded. MCR
2.625(C), entitled, “Costs in Certain Trivial Actions,” provides that, “[i]n an action brought for
damages in contract or tort in which the plaintiff recovers less than $100 (unless the recovery is
reduced below $100 by a counterclaim), the plaintiff may recover costs no greater than the
amount of damages.” Here, Home-Owners’s action was not one for “damages,” it was for a
declaratory judgment that it owed no duty to cover defendant’s loss under the insurance policy.
Andriacchi cites no authority for the argument that MCR 2.625(C) is applicable to an action
seeking only a declaratory judgment. Because Home-Owners’s action is not one for damages,
MCR 2.625(C) does not serve to limit its recoverable costs.

        Andriacchi also argues that Home-Owners was not entitled to expert witness fees because
MCL 600.2164 bars the assessment of expert witness fees as a cost when the expert does not
testify. MCL 600.2164(1) provides, in relevant part, “No expert witness shall be paid, or receive
as compensation in any given case for his services as such, a sum in excess of the ordinary
witness fees provided by law, unless the court before whom such witness is to appear, or has
appeared, awards a larger sum, which sum may be taxed as a part of the taxable costs in the
case.” (Emphasis added.)

       Both the language of the rule and caselaw are against Andriacchi’s position. In Herrera v
Levine, 176 Mich. App. 350, 357-358; 439 NW2d 378 (1989), this Court concluded: “The
language ‘is to appear’ in § 2164 applies to the situation at bar in which the case was dismissed
before defendant had a chance to call its proposed expert witnesses at trial. Furthermore, the trial
court was empowered in its discretion to authorize expert witness fees which included
preparation fees.” Hence, a party may recover expert fees under MCL 600.2164 where a case is
dismissed before that expert can testify at trial.

         Andriacchi further contends that the expert (an engineer) was hired and his report was
completed 21 days before the lawsuit was filed and, therefore, that the report is “analogous to a
‘critical assessment of the opposing party’s position’ which is ‘not regarded as [a] properly
compensable expert witness fee.’ ” The record reveals that the engineer was retained to inspect
Andriacchi’s building and determine the cause of the damages to the building after Andriacchi
initially objected to Home-Owners’s determination that the damages were caused by earth
movement. Home-Owners included with its motion for summary disposition the affidavit of the
engineer, in which he opined regarding the cause of the damages. The costs sought by Home-
Owners in connection with the expert’s time were necessary for the expert to develop his opinion
regarding the cause of the damages. Indeed, Andriacchi relied upon the expert’s finding that the
damages were caused by earth movement in opposing Home-Owners’s motion for summary
disposition. Costs for expert witness fees were properly awarded.

        We do agree with Andriacchi that the trial court abused its discretion when it awarded
Home-Owners $35.20 as taxable costs for court reporter fees incurred in ordering a hearing
transcript, because the trial court could not award costs incurred in seeking the transcript for
purposes of appeal. MCL 600.2543(2) provides, “Only if the transcript is desired for the purpose
of moving for a new trial or preparing a record for appeal shall the amount of reporters’ or
recorders’ fees paid for the transcript be recovered as a part of the taxable costs of the prevailing
party in the motion, in the court of appeals or the supreme court.” In Van Elslander v Thomas

                                                -11-
Sebold & Assoc, Inc, 297 Mich. App. 204, 223; 823 NW2d 843 (2012), this Court held that
“[a]lthough the cost of trial transcripts constitutes a taxable cost in an appeal, it is inappropriate
to include the cost of transcripts prepared for an appeal as costs recoverable by the prevailing
party in a civil action.” Thus, the trial court lacked authority to award the court reporter fees,
and this cost should be vacated from the costs awarded to Home-Owners. On remand, the trial
court should enter an amended judgment excluding this cost from the costs awarded.

        Next, Andriacchi contends that the trial court abused its discretion by awarding $80 for
motion fees. Under MCL 600.2529(1)(e) and (2), motion fees are taxable as costs. The trial
court did not specifically address the requested motion fees at the March 14, 2016 hearing, but it
did express that Home-Owners was entitled to the “statutory fees.” It appears undisputed that
Home-Owners actually paid $80 in motion fees.

        According to Andriacchi, the $20 fee for the motion to set aside a default and the $20 fee
for the motion to compel production of documents were not recoverable because Home-Owners
did not request costs in their respective motions.4 Andriacchi also asserts that the $20 fee for the
motion for an order to show cause for his failure to turn over the settlement agreement pursuant
to the court’s June 25, 2015 order was not recoverable because “there was no basis for the
motion.” However, Andriacchi has provided no authority in support of these arguments, and the
language of the statute does not provide him with relief. The trial court had authority to tax
motion fees under MCL 600.2529.5

        C. SHOULD SANCTIONS HAVE BEEN AWARDED FOR THE MOTION TO
                              DISQUALIFY?

       This Court reviews a trial court’s decision regarding sanctions based on frivolous
pleadings or claims for clear error. Kitchen v Kitchen, 465 Mich. 654, 661-662; 641 NW2d 245
(2002). “A finding is clearly erroneous where, although there is evidence to support the finding,
the reviewing court on the entire record is left with the definite and firm conviction that a
mistake has been made.” Ambs v Kalamazoo Co Rd Comm, 255 Mich. App. 637, 652; 662 NW2d
424 (2003).

4
 Andriacchi also asserts that he was entitled to taxable costs incurred in reliance on the default
under MCR 2.603 and MCR 2.625. However, that issue is not the subject of the order from
which this appeal is taken.
5
  Andriacchi argues that the $20 motion fee for Home-Owners’s motion for summary disposition
was awarded twice “as part of the $80 motion fee and also a motion resulting in dismissal (or
judgment).” However, the lower court register of actions reveals that Home-Owners paid a $20
motion fee for its motion for summary disposition on July 27, 2015, and subsequently filed a $20
motion fee on September 14, 2015, for entry of an order on the court’s ruling granting Home-
Owners’s motion for summary disposition. The $20 fee for the motion for summary disposition
was not awarded twice.

                                                -12-
       The trial court found that Andriacchi’s motion to disqualify the trial judge was frivolous
under both MCR 2.114 and MCL 600.2591. Home-Owners argues that sanctions are mandatory
under MCL 600.2591(1) and MCR 2.114(E), if the trial court finds a violation of the statute or
court rule.6 Home-Owners is correct. Sanctions are mandatory if a court determines that a
document was signed in violation of MCR 2.114(E). Andriacchi argues that MCR 2.114(E) is
not mandatory, but the court rule clearly provides that

       [i]f a document is signed in violation of this rule, the court, on the motion of a
       party or on its own initiative, shall impose upon the person who signed it . . . an
       appropriate sanction, which may include . . . reasonable expenses incurred
       because of the filing of the document, including reasonable attorney fees. . . .
       [Emphasis added.]

Thus, the trial court abused its discretion by refusing to award sanctions. See Cvengros v Farm
Bureau Ins, 216 Mich. App. 261, 268; 548 NW2d 698 (1996).7

                           D. WERE THE FINDINGS SUFFICIENT?

        Andriacchi argues that the trial court failed to make any findings that would facilitate
appellate review of the trial court’s frivolousness determination and, therefore, this Court should
vacate that part of the April 11, 2016 order holding that the defense motion to disqualify was
frivolous.8

       The lower court record reveals that Home-Owners sought to tax fees and costs under
MCR 2.114 and MCR 2.625 “for a frivolous defense,” arguing that “this is a frivolous defense
where no further explanation is needed.” Home-Owners subsequently filed a “supplemental
brief for MCL 600.2591 sanctions” for Andriacchi’s assertion of a frivolous defense and

6
  Sanctions for the filing of a frivolous motion to disqualify must be evaluated under MCR 2.114,
not under MCL 600.2591, because MCL 600.2591 provides for sanctions related to a frivolous
civil action or defense. Thus, only MCR 2.114 is addressed here despite the fact that the trial
court’s order refers to both MCR 2.114 and MCL 600.2591.
7
  Andriacchi cites to MCL 600.2591(1), and argues that “[o]nly ‘the court that conducts the civil
action’ has the authority to issue sanctions under MCL 600.2591.” He appears to be asserting
that the motion for disqualification was not part of the “civil action” after he sought review of the
trial court’s denial of the motion for disqualification. However, he has failed to sufficiently brief
the argument that a chief judge’s review of a trial judge’s denial of a request for disqualification
under MCR 2.003(C)(3) (and now under MCR 2.003(D)(3)), is the equivalent of an appeal for
which the trial court has no jurisdiction to award costs. This argument is abandoned. See MCR
7.212(C)(5); In re ASF, 311 Mich. App. 420, 440; 876 NW2d 253 (2015).
8
 The trial court did not award sanctions for filing a frivolous motion and, therefore, there is no
award of sanctions to review. However, because Home-Owners is challenging the trial court’s
refusal to award sanctions after finding that the motion to disqualify was frivolous, Andriacchi’s
argument that the motion was not frivolous becomes relevant.

                                                -13-
frivolous attempt to disqualify the trial judge. At the associated hearing, the trial court stated,
“I’m finding that the motion to disqualify me for ex parte communication was frivolous, but I am
uncomfortable in imposing actual attorney fees to a firm that was basically defending my
position.” Andriacchi thereafter filed objections to Home-Owners’s proposed order, and a
hearing was held. The trial court stated:

                I just want to clarify one point. In your first proposed order, you indicated
       that . . . I found the motion to disqualify frivolous, but refused to award costs. I
       believe—and if I didn’t say it, what I meant to say is that I don’t think it was in
       my wheelhouse to make that call. When Judge Goodman had the case, I think he
       should have been asked to (inaudible) issue.

               So with that said, I am finding that the two proposed orders prompted by
       the defendant’s [sic] bill of costs are proper, and the statutory costs that are
       involved, as far as the expert witness, he was clearly retained, and was going to
       testify in this case if it went any further. So (inaudible) case in my further
       discretion to award expert fees, I am awarding his costs and signing the orders as
       presented by Mr. Smith.

The trial court entered two separate orders, one making a finding of frivolousness and the other
declining to award costs.

       This Court has explained the issuance of sanctions under MCR 2.114(E),9 as follows:

               Whenever an attorney or party signs a motion, that person’s signature
       constitutes “certification” that he or she has “read the document” and, “to the best
       of his or her knowledge, information, and belief formed after reasonable inquiry,
       the document is well grounded in fact and is warranted by existing law or a good-
       faith argument for the extension, modification, or reversal of existing law,” and
       that the motion was not made for “any improper purpose, such as to harass or to
       cause unnecessary delay or needless increase in the cost of litigation.” MCR
       2.114(D). If a party brings a motion that has been signed in violation of MCR
       2.114(D), the trial court must “impose upon the person who signed it, a
       represented party, or both, an appropriate sanction . . . .” MCR 2.114(E). The
       trial court may not assess punitive damages, but may order the person who signed
       it or a represented party to pay “the other party or parties the amount of the
       reasonable expenses incurred because of the filing . . . .” MCR 2.114(E). [Kaeb v
       Kaeb, 309 Mich. App. 556, 565; 873 NW2d 319 (2015).]

       The trial court denied Home-Owners’s request for sanctions after it concluded, with no
analysis, that “the motion to disqualify me for ex parte communication was frivolous.” The trial

9
  Again, the issue is being analyzed under MCR 2.114(E) alone. MCL 600.2591 is not
applicable to a frivolous motion because a motion does not involve a claim or defense in a civil
action.

                                               -14-
court’s subsequent written order gave no indication as to why it found that the motion was
frivolous, though the reasons why it would make that conclusion are fairly apparent from the
record. After all, the basis for the recusal motion was that the judge read a reply brief filed with
the court that had a proof of service, but that defense counsel may not have received. This
clearly is not a plausible theory for recusal. But because we employ the deferential clearly
erroneous standard to the trial court’s determination whether an action was frivolous, the trial
court’s failure to articulate a clear basis for its decision makes it impossible to ascertain whether
the trial court clearly erred in finding the motion frivolous. We must vacate and remand for
appropriate findings. Triple E Produce Corp v Mastronardi Produce Ltd, 209 Mich. App. 165,
176; 530 NW2d 772 (1995). The trial court should decide Home-Owners’s motion for sanctions,
articulating on the record or in a written opinion the basis of its ruling. If the trial court finds a
violation of MCR 2.114, it must “impose . . . an appropriate sanction . . . .” MCR 2.114(E). See
Cvengros, 216 Mich. App. at 268. The $35.20 costs shall also not be included in any amended
order.

        Affirmed in part, vacated in part, and remanded for further proceedings. No costs,
neither party having prevailed in full. MCR 7.219(A). We do not retain jurisdiction.

                                                              /s/ Christopher M. Murray
                                                              /s/ David H. Sawyer
                                                              /s/ Elizabeth L. Gleicher

                                                -15-