Court Opinion

ID: 9533421
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:31:40.57996+00
Date Added: 2024-06-11T13:29:02.953452
License: Public Domain

Markey, P. J.
(concurring in part and dissenting in part). I disagree with the majority’s analysis and disposition of the claims for breach of contract, agency, *27estoppel, and professional negligence by plaintiff Jeanette Mate, as personal representative of the estate of Shane Mate, deceased, but I agree with the majority in their resolution of plaintiff’s claim for reformation of contract. Although I have the utmost respect for my majority colleagues, I must dissent on these issues.
i
BREACH OF CONTRACT
On appeal, a trial court’s. grant or denial of summary disposition is reviewed de novo. Pinckney Community Schools v Continental Casualty Co, 213 Mich App 521, 525; 540 NW2d 748 (1995). This Court must review the record in the same manner as the trial court to determine whether the moving party was entitled to judgment as a matter of law. Phillips v Deihm, 213 Mich App 389, 398; 541 NW2d 566 (1995). A motion for summary disposition pursuant to MCR 2.116(C)(10) tests the factual support for a claim. A court must consider the pleadings, depositions, affidavits, admissions, and other documentary evidence submitted by the parties. The test is whether the kind of record that might be developed, given the benefit of any reasonable doubt to the nonmoving party, would leave open an issue on which reasonable minds might differ. The motion must not be granted unless the nonmoving party’s claim is impossible to support because of some deficiency that cannot be overcome. See Shallal v Catholic Social Services of Wayne Co, 455 Mich 604, 609; 566 NW2d 571 (1997); Skinner v Square D Co, 445 Mich 153, 161; 516 NW2d 475 (1994).
*28Unfortunately, the majority provides a skeletal rendition of the facts and a terse discussion of plaintiff’s breach of contract claim. Its analysis completely misses the point and consequently fails to address the true breach of contract issue. The breach of contract must be and is the threshold issue for analysis in this case. An insurance policy is first and foremost a contract. Specifically, an insured pays money in the form of premiums to obtain, in this case, no-fault automobile insurance. After Jeanette Mate and James Mate were divorced in 1989, Jeanette still required automobile insurance coverage for herself and, concomitantly, for anyone else living in her household. In 1991, defendant Buiten, Tamblin, Steensma & Associates, Inc. (the Buiten agency) first properly sold Jeanette a separate no-fault policy. Then, in 1992, the agency merely added the vehicles Jeanette owned to James Mate’s no-fault policy, issued certificates of insurance for those vehicles, and accepted premiums for the coverage. In other words, defendant Wolverine Mutual Insurance Company, through the Buiten agency, agreed to provide no-fault insurance to Jeanette Mate, i.e., the parties entered into a contract. In reality, Jeanette and her son, Shane, fell within no definition of an insured under Wolverine’s policy language. Consequently, Jeanette Mate had no no-fault coverage whatsoever,1 which, in turn, means that no one residing in her home was insured under the Wolverine policy she believed provided her no-fault coverage. Thus, when the majority decides the breach of contract claim in reference to whether the policy cov*29ered Shane Mate for underinsured motorists benefits, it is putting “the cart before the horse.” Obviously, there must be a policy in effect before one can analyze its terms of coverage. At the time of the accident, the only persons truly insured under the policy were James Mate and any of his resident relatives.
Here, though the majority recites the applicable standard of review, I believe it impossible to consider these facts in a light most favorable to the nonmoving party and apply the standards for the grant or denial of summary disposition and not find it evident that a genuine issue of material fact exists regarding whether plaintiff has a viable cause of action for breach of contract. Thus, I would reverse the grant of summary disposition with regard to plaintiff’s breach of contract claim.
n
AGENCY
Plaintiff also claims that a genuine issue of material fact exists regarding whether the Buiten agency was an agent of Wolverine Mutual Insurance Company. I again agree that a genuine issue of material fact exists with regard to this claim.
The majority correctly quotes from Harwood v Auto-Owners Ins Co, 211 Mich App 249, 254; 535 NW2d 207 (1995), and Mayer v Auto-Owners Ins Co, 127 Mich App 23, 26; 338 NW2d 407 (1983), when it states that “[o]rdinarily, an independent insurance agent or broker is an agent of the insured, not the insurer.” Ante at 20. In their respective analyses, Harwood refers only to Mayer and Mayer refers only to 16 Appleman, Insurance Law & Practice, § 8722, pp 322-324, and to 2 Restatement 2d, Agency, § 376, *30comment a, p 173. Mayer, supra. This issue received very cursory treatment in Harwood and Mayer and by the majority in this case as well. Initially, the proposition that an independent agent is an agent of the insured is modified by the word “ordinarily.” It is not black letter law. Moreover, even as a general proposition it is suspect, and its legal underpinnings weak. The precise problem with the perfunctory conclusion that an insurance agency is the agent of the insured, here purportedly Jeanette Mate, is articulated by Keeton & Widiss, Insurance Law, A Guide to Fundamental Principles, Legal Doctrines, and Commercial Practices (Student ed, 1988), § 2.5b(3), pp 83-84:
The term “insurance broker” is often used to characterize an individual who is thought to act primarily on behalf of a purchaser in an insurance transaction. . . . Because brokers receive compensation from the insurers, it seems evident that a persuasive argument can be made for not treating a broker as an agent of the insurance purchaser. In response to this point, it has sometimes been urged that a “broker” is an agent of the insurer, but only for the limited purpose of collecting premiums on policies transmitted to the broker for delivery. Although such a limited agency relationship may actually exist in a few situations, it almost certainly is the exception rather that the general pattern. The relationships between most brokers and the insurance companies they place coverages with typically involve significantly greater ongoing contacts and interactions than the relationship with any individual applicant for insurance or insured. Accordingly, so long as the general rule prevails that an agent may not serve two principals simultaneously, it seems clear that in most contexts there is more justification for treating a broker as an agent of an insurer than as an agent of the purchaser.
Furthermore, the treatise goes on to discuss the liability of a broker and an insurer when an insurance *31company has been specified or otherwise indicated. The authors note:
The insurance purchaser usually is not versed in the intricacies of the insurance business. The prospective insured seeks the assistance of a specialist and relies on the sales representative’s knowledge of both the insurance business in general and insurance coverages in particular. If a sales representative fails to secure the appropriate insurance— by purporting to make a contract that is in fact beyond his or her authority, or arranging for coverage that turns out to be defective in some way, or fails to make any insurance arrangements — the applicant or purchaser should have a cause of action against the sales representative who has committed such a misfeasance without regard as to whether the insurance company has eocplicitly or implicitly been identified. This seems even more justified today than in the past, as agents and brokers have increasingly promoted their professional expertise in serving the public’s insurance needs.
' * * *
Finally, a sales representative often acts on behalf of both the insurer and the applicant, and such an intermediary owes a duty to exercise due care and reasonable diligence in the pursuit of the insured’s or the applicant’s business. [Keeton, § 2.5(c)(2), pp 89-90 (emphasis added).]
In this case, Paul Buiten referred to Jeanette and her ex-husband as his “clients.” He further indicated that “as agents, we’re contracted with insurance companies to place business with them. We are given binding authority.”
The tenor of Mr. Buiten’s testimony suggests that from his perspective his primary relationship is with the insurance companies with which he contracts and by which he is paid. Hence, because there is no well-settled law in Michigan unequivocally characterizing *32an independent insurance agent as the agent of the insured, there exists a genuine issue of both law and fact. Moreover, depending on the facts of a specific case, an agent could be dually serving two principals.
The analysis proffered by Keeton and Widiss takes into account the realities of the relationship between an independent agent and the insurance company and provides a far more fair and sensible approach to the characterization of the intertwined relationships among insurers, insureds, and independent agents or brokers.
Thus, for these reasons and because I do not believe either Harwood or Mayer is controlling on this issue, MCR 7.215(H)(1), I believe there exists a genuine issue of material fact regarding whether the Buiten agency was an agent of Wolverine Mutual Insurance Company, or a dual agent of both Wolverine and Jeanette Mate.
in
EQUITABLE ESTOPPEL
I also firmly believe that there exists a genuine issue of material fact regarding whether Wolverine is estopped from disclaiming coverage for plaintiffs claim. As the majority noted, there are circumstances where estoppel may operate to hold a defendant insurer, agent, or broker hable for coverage that differs from the express terms of the contract. Parmet Homes, Inc v Republic Ins Co, 111 Mich App 140, 148; 314 NW2d 453 (1981). Equitable estoppel exists
“ ‘when one by his acts, representations, or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts *33on such belief so that he will be prejudiced if the former is permitted to deny the existence of such facts.’ ” [Lichon v American Universal Ins Co, 435 Mich 408, 415; 459 NW2d 288 (1990) (citations omitted)].
Here, the record evidences that both the Buiten agency and Wolverine knew these important facts: (1) that Jeanette and James Mate had been divorced for several years and were living at separate addresses, (2) that Jeanette Mate was legally required to have her own no-fault insurance policy before she or anyone living in her residence would be covered, and (3) that Jeanette Mate needed, asked for, and believed she had no-fault insurance because she owned, at all relevant times, at least one vehicle requiring insurance. Nonetheless, the Buiten agency, despite the accurate information contained within its own records and a letter of inquiry from Wolverine requiring verification of several of these pivotal facts, either intentionally or negligently provided Jeanette Mate with no-fault insurance certificates allowing her to believe she and her resident relatives, in fact, had no-fault insurance. In addition, Jeanette Mate, a longtime client, asked the Buiten agency various questions about coverage, and, as expected and as usual, she relied upon its answers, this time to her detriment.
The majority’s rationale for its decision regarding the issue of equitable estoppel is that “[p]laintiff has presented no evidence that either Buiten or Wolverine intentionally or negligently induced Shane Mate to believe that he would be insured under the policy . . . .” Ante at 22 (emphasis added). That statement is a nonsequitur. It also defies common sense. Shane, as Jeanette Mate’s teenage son, would only have been *34covered, i.e., be an. insured, as a resident relative under bis mother’s policy. In other words, under this factual situation, it is undisputed that Jeanette would be and should have been the named insured on the policy, so it is irrelevant whether Buiten or Wolverine were aware of Shane Mate’s presence in either household. Shane had no driver’s license, owned no vehicle, and obviously was not the primary driver of any vehicle. He would have been covered solely because of his residence with an insured, i.e., either Jeanette Mate or James Mate, as his stepfather. Jeanette Mate, as Shane’s parent, as the only potential named insured on an insurance policy, and now, tragically, as the personal representative of Shane’s estate, is the only person pertinent to the issue of equitable estoppel.
Moreover, the majority grossly misunderstands the issue and instead frames it primarily as one regarding the adequacy of a policy’s coverage. I agree with the majority’s citations of Bruner v League General Ins Co, 164 Mich App 28; 416 NW2d 318 (1987), wherein it is stated that an insurance agent does not have an affirmative duty to advise a client regarding the adequacy of a policy’s coverage and, indeed, an insured is obligated to read an insurance policy and raise any questions the insured might have concerning coverage within a reasonable time after issuance.
Unfortunately, the problem here is not one of “adequate coverage.” The majority has bizarrely twisted both the facts of this case and their application to the pertinent law in concluding that Shane Mate’s state of mind had anything whatsoever to do with whether he should have had no-fault coverage. As stated previously, Jeanette Mate had no knowledge that, in real*35ity, neither she nor her son, as her resident relative, had any no-fault coverage at all because of the Buiten agency’s placing her vehicle under James Mate’s policy. When Jeanette spoke to the Buiten agency at one point before the accident, she asked whether there was any reason she could not be covered under her ex-husband’s policy. In response, Buiten then listed her vehicles under her former husband’s policy, accepted premiums for payment on that policy, issued no-fault insurance certificates, and, by doing so, deluded Jeanette Mate into believing she had no-fault coverage for herself and, therefore, for her resident relatives. As a result, she allowed a separate no-fault policy Buiten previously had sold her to lapse, which had, in fact, contained provisions for both underinsured and uninsured motorist benefits. Under these facts, the majority’s conclusion, ante at 23, that “[therefore, it was Jeanette Mate’s failure to notify Buiten that Shane was living in her household that resulted in Shane’s lack of underinsurance coverage” is mystifying and has frightening ramifications for thousands of parents who have children living with them. Were this a situation where Jeanette Mate had maintained her own policy as the law requires and that insurance did not contain a provision providing for underinsurance coverage, the majority’s “inadequacy of insurance” analysis would be well taken. However, the issue here is clearly not one of “inadequacy of coverage.” The trial court clearly erred in granting defendants summary disposition with regard to this issue as well.
*36IV
NEGLIGENCE — PROFESSIONAL MALPRACTICE
Finally, I also agree that there exists a genuine issue of material fact regarding the existence of a special relationship between Jeanette and the Buiten agency so as to invoke a duty of care. As previously discussed, an insurance agent generally does not have an affirmative duty to advise a client regarding the adequacy of a policy’s coverage. But as also noted in Bruner, supra at 31-32, a duty may arise where a “special relationship” exists between the insurer or its agent and the insured. If that duty is breached, liability may be imposed on the basis of that breach.
Bruner, in my opinion, supports plaintiff’s claim of professional negligence against the Buiten agency, but at the very least there exists a question of fact regarding the existence of a “special relationship.” In discussing what constitutes a “special relationship,” the Court in Bruner, supra at 34, stated in pertinent part:
There must be, in a long-standing relationship, some type of interaction on a question of coverage, with the insured relying on the expertise of the insurance agent to the insured’s detriment.
Again, the majority concludes that no special relationship of any sort existed between Shane Mate and the Buiten agency. And, again, the majority, in a rationale that is puzzling, states that “[t]he record lacks any evidence that Buiten advised Shane in any way regarding the adequacy of his insurance coverage.” Ante at 24. The majority again misses the point: the focus is on the agency’s relationship with Jeanette Mate, not with her resident child, Shane. The Buiten agency had a long-term relationship with both Jeanette and James *37Mate since 1978, had many, many contacts with them over numerous years, and had interaction with them on coverage questions.
Here, the transcripts unequivocally demonstrate that Jeanette Mate conversed with the Buiten agency and specifically asked whether there was any reason she couldn’t be covered under her ex-husband’s policy. The Buiten agency’s witnesses themselves recalled many conversations with Jeanette Mate, their file notes reflect coverage changes, address changes, notice of divorce, and so forth. Unlike the plaintiff in Bruner, Jeanette and James Mate, on the basis of the Buiten agency’s own witnesses’ testimony, appeared to have had far more dealings with their insurance agency than is usually found in a “standard” client-agent relationship. Bruner, supra at 34. Moreover, again unlike the plaintiff in Bruner, Jeanette previously had underinsured motorist coverage when she had her separate policy, and so did James Mate in his policy in effect at the time of this accident. Jeanette expressly requested the Buiten agency to provide her with no-fault insurance benefits, apparently just expecting them to be comparable to those that she had when she was married to and living with James Mate and when she had her own separate policy. The Buiten agency sold all these insurance policies to Jeanette and her ex-husband. Because these are factual developments that could well justify the finding of a special relationship between Jeanette and Buiten, the trial court certainly erred in granting defendants summary disposition pursuant to MCR.2.116(C)(10). I would reverse and remand for further proceedings.

 Defense counsel conceded during oral argument that Jeanette herself was not an insured under James Mate’s no-fault policy either.