Court Opinion

ID: 9705297
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:01:33.858184+00
Date Added: 2024-06-11T18:22:09.688120
License: Public Domain

Cavanagh, J.
(dissenting). I would hold that the
insurer’s method of exclusion by definition is invalid. Most policyholders would consider the term “nonowned” clear without definition. Plaintiff’s practice, of defining this unambiguous term in an obscure manner, renders the clause unclear and ambiguous. This case presents the very same definitional exclusions that five members of this Court found unenforceable in Powers v DAIIE, 427 Mich 602; 398 NW2d 411 (1986). The lead opinion, signed by two justices, addressed six rules of contract interpretation in concluding that this form of exclusion is an ambiguous, unclear, technical construction that is contrary to the reasonable expectations of the insured. Id. at 611. Two of us concurred in that result. Id. at 643. Justice Levin wrote separately, but in agreement that the exclusion is unenforceable, because it is unconscionable and contrary to the reasonable expectations of an insured. Id. at 645-646. Because the identical unfair practice is at issue, I see no reason to overturn our previous refusal to enforce these clauses.
I agree that an insurer may exclude coverage for residual liability when an insured is driving a vehicle owned by a resident family member as long as the exclusion is clearly and unambiguously stated. Id. at 642. The lead opinion in Powers provided that these exclusions could be made clear to the insured by simply referencing the exclusionary definitions section. Id. at 629. Alternatively, the insurer could have listed the exclusions in the exclusions section of the policy. Id. at 628. In the thirteen years since Powers, the insurer has failed to incorporate any clarification into *572its policies. While the insurer has refused to place its insureds on notice regarding its coverage exclusions, this Court placed insurers on notice that this form of exclusion would not be enforced. Today, the majority validates the insurer’s defiance.
The majority asserts that the nonowned automobile definition is not an exclusion, but rather a “limitation on coverage by definition of a term used to specify the scope of coverage.” Ante, p 560, n 1. However, the exclusions section of the policy serves the same purpose of limiting coverage. The majority’s statement that the definition does not provide an exclusion here is questionable. It should be of no concern to the majority under its analysis that this definition operates to exclude coverage based on a definition contrary to the common meaning of “nonowned.”
I disagree that these definitional exclusions fairly place an insured on notice of coverage limits. The insured should not be forced to piece together portions of the contract to determine whether coverage exists.
Kelly, J., concurred with Cavanagh, J.