Court Opinion

ID: 9840073
Source: CourtListenerOpinion
Date Created: 2023-09-15 05:07:49.007179+00
Date Added: 2024-06-11T10:06:24.017111
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

JONATHAN F. BEARD,                                                     UNPUBLISHED
                                                                       September 14, 2023
               Plaintiff-Appellant,

v                                                                      No. 360695
                                                                       Wayne Circuit Court
PROGRESSIVE MARATHON INSURANCE, also                                   LC No. 21-016469-NF
known as PROGRESSIVE MARATHON
INSURANCE COMPANY,

               Defendant-Appellee.

Before: PATEL, P.J., and SWARTZLE and HOOD, JJ.

PER CURIAM.

        In this no-fault action for uninsured and underinsured motorist (UM/UIM) benefits,
plaintiff Jonathan Beard appeals as of right the order of the trial court granting in part, and denying
in part, summary disposition to defendant Progressive Marathon Insurance, also known as
Progressive Marathon Insurance Company (Progressive), under MCR 2.116(C)(10). We affirm.

                                        I. BACKGROUND

        This case arises out of a motor vehicle accident and Beard’s post-accident claim for
UM/UIM benefits under his insurance policy with Progressive. In late October 2018, Beard was
driving in the parking lane of southbound Van Dyke in Detroit. Another driver, Mahlieka Molita
Robinson, was also driving southbound on Van Dyke and, as she tried to change lanes to turn right
on Warren Avenue, she sideswiped Beard’s vehicle. Robinson was driving a rental vehicle at the
time of the accident. Flexdrive Services, LLC (Flexdrive) owned the rental vehicle and Empire
Fire and Marine Insurance Company (Empire) insured it. Flexdrive’s policy with Empire included
bodily injury liability coverage of up to $20,000 per person. At the time of the accident, Beard
had an insurance policy with Progressive that provided UM/UIM coverage of up to $50,000 per
person. In the portion of Beard’s policy governing UM/UIM benefits, it states:

               Any judgment or settlement for damages against an owner or operator of an
       uninsured motor vehicle that arises out of a lawsuit brought without [Progressive’s]
       written consent is not binding on [Progressive]. You are permitted to file a lawsuit

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         against [Progressive] within the statute of limitations to have any dispute settled by
         a court of proper jurisdiction when you believe [Progressive has] not appropriately
         responded to your requests concerning such proceedings or you believe
         [Progressive has] acted inappropriately in handling your claim. [Emphasis added.]

         The policy defines “uninsured motor vehicle” as “a land motor vehicle or trailer of any
type:”

         a. to which no bodily injury liability bond or policy applies at the time of the
         accident;

                                                 * * *

         e. to which a bodily injury liability bond or policy applies at the time of the
         accident, but the sum of all applicable limits of liability for bodily injury is less than
         the coverage limit for Uninsured/Underinsured Motorist Coverage shown on the
         declarations page.

The policy does not specifically define “underinsured motor vehicle.”

        Two other provisions of Beard’s policy are relevant here. First, a UM/UIM coverage
exclusion provided that Progressive could exclude UM/UIM coverage for “bodily injury sustained
by any person if that person or the legal representative of that person settles without [Progressive’s]
written consent.” Second, the general provisions found in Part VII of the policy state that “[i]f an
insured person recovers from another without our written consent, the insured person’s right to
payment under any affected coverage will no longer exist.”

        In mid-February 2021,1 Beard sued Progressive for personal-protection-insurance (PIP)
benefits and raised third-party claims against Robinson and Flexdrive in Wayne Circuit Court Case
No. 21-002005-NF. That case ultimately settled for $20,000 in mid-October 2021. Progressive
did not consent to Beard’s settlement with Robinson and Flexdrive in this previous case.

       In late November 2021, Beard sued Progressive, this time seeking UM/UIM benefits.
Beard alleged that Robinson was an “uninsured/underinsured motorist” and that Progressive
refused to pay him UM/UIM benefits.

         In late December 2021, Progressive answered the complaint, denying that it owed Beard
for the full policy limits of UM/UIM benefits and asserting that he may not be entitled to UM/UIM
benefits. It then moved for summary disposition under MCR 2.116(C)(10). Progressive argued
that because Empire insured the vehicle Robinson was driving at the time of the accident, Beard’s
claim for UM/UIM benefits should be dismissed. Progressive also asserted that Beard settled with

1
 We take judicial notice of when Beard filed his initial suit against Progressive, Robinson, and
Flexdrive. See MRE 201. See also Const 1963, art 6, § 1; People v Snow, 386 Mich 586, 591;
194 NW2d 314 (1972).

                                                    -2-
Robinson and Flexdrive in the previous case without Progressive’s consent, contrary to the terms
of Beard’s policy. It therefore argued that there was no genuine issue of material fact that Beard’s
settlement precluded UM/UIM coverage under the policy.2

        Beard responded to Progressive’s motion for summary disposition. He noted that his claim
was for underinsured motorist benefits and, at the time of the accident, Robinson was underinsured,
not uninsured. Beard admitted that he had settled his case against Robinson and Flexdrive. He
argued, however, that he still had a valid claim for underinsured motorist benefits. Specifically,
Beard argued that his policy did not define an “underinsured” motor vehicle. He asserted that the
policy only prohibited settlement without Progressive’s consent for damages against an owner or
operator of an “uninsured” motor vehicle. Beard therefore argued that the policy only prohibited
him from settling a case related to uninsured motor vehicles, and a genuine issue of material fact
remained regarding whether Progressive’s consent was required for settlements related to
underinsured motor vehicles.

        After a hearing, the trial court granted summary disposition of Beard’s claim for UM/UIM
benefits. The court concluded that the definition of “uninsured motor vehicle” in the policy
included the common understanding of “underinsured motor vehicle.” The trial court found that
the vehicle driven by Robinson in the accident constituted an uninsured vehicle under Beard’s
policy

       because the bodily injury liability bond or policy that applied at the time of the
       accident was in place, but the sum of all applicable limits of liability for bodily
       injury is less than the coverage limit for uninsured/underinsured motorist coverage
       shown on the declarations page. And the declarations page provided for $50,000.
       And because [Robinson’s] maximum for bodily injury was $20,000, then that other
       vehicle was under the terms of the policy, an uninsured vehicle and that’s the hiccup
       here.

The court determined that because the vehicle driven by Robinson was considered an “uninsured
motor vehicle” under the Progressive policy, Beard’s claim for UM/UIM benefits was barred by
the settlement he reached without Progressive’s consent. The trial court rejected Beard’s argument
that the policy’s language was ambiguous, and his claim that there was a question of fact regarding
whether his claim was barred under the policy’s terms. Beard’s attorney3 conceded that there was
no evidence that Beard tried to obtain consent from Progressive before settling with Robinson and
Flexdrive. The court concluded that because of Beard’s settlement without Progressive’s consent,

2
  Progressive also argued that Beard’s claim was barred by the statute of limitations. The trial
court denied Progressive’s motion for summary disposition as it related to the statute of limitations.
Progressive concedes on appeal that the trial court’s decision regarding the statute of limitations
is not at issue here.
3
  Though Beard’s attorney was Dionne E. Webster-Cox, Philip Alther, a recent law school
graduate, argued the motion on Beard’s behalf under MCR 8.120.

                                                 -3-
Progressive did not have to provide UM/UIM coverage to Beard. It therefore granted summary
disposition in part and denied it in part. This appeal followed.

                    II. PRESERVATION AND STANDARDS OF REVIEW

        An issue must be raised in or decided by the trial court for it to be preserved for appeal.
Glasker-Davis v Auvenshire, 333 Mich App 222, 227; 964 NW2d 809 (2020). “[I]ssue
preservation requirements only impose a general prohibition against raising an issue for the first
time on appeal.” Id. “Consistent[] with that principle, a party . . . need not preserve an objection
to a ‘finding or decision’ made by the trial court . . . .” Id., quoting MCR 2.517(A)(7).
Nevertheless, “so long as the issue itself is not novel, a party is generally free to make a more
sophisticated or fully developed argument on appeal than was made in the trial court.” Id. at 228.
“This Court also has the power to consider an issue when necessary, even if unpreserved or not
properly presented.” Id.

        Beard preserved his argument that the policy only prohibited settling lawsuits related to
uninsured motor vehicles, and that a factual dispute remained on that issue with respect to
underinsured motor vehicles. This Court reviews de novo a trial court’s decision on a motion for
summary disposition. El-Khalil v Oakwood Healthcare Inc, 504 Mich 152, 159; 934 NW2d 665
(2019). A motion under MCR 2.116(C)(10) “tests the factual sufficiency of a claim.” Id. at 160
(citation and emphasis omitted). In considering a motion under MCR 2.116(C)(10), the trial court
“must consider all evidence submitted by the parties in the light most favorable to the party
opposing the motion.” Id. (citation omitted). Such a motion “may only be granted when there is
no genuine issue of material fact.” Id. (citation omitted). “A genuine issue of material fact exists
when the record leaves open an issue upon which reasonable minds might differ.” Id. (quotation
marks and citation omitted). “The interpretation of a contract, such as an insurance policy, is also
reviewed de novo.” Webb v Progressive Marathon Ins Co, 335 Mich App 503, 507; 967 NW2d
841 (2021).

        Beard did not raise below his argument that, in the absence of a subrogation clause, the
requirement to obtain Progressive’s consent before agreeing to a settlement is arbitrary, so the
issue is unpreserved. See Glasker-Davis, 333 Mich App at 227. We therefore review this issue
for plain error. See Mr Sunshine v Delta College of Trustees, ___ Mich App ___, ___; ___ NW2d
___ (2022) (Docket No. 358042); slip op at 2; see also Wischmeyer v Schanz, 449 Mich 469, 483,
483 n 26; 536 NW2d 760 (1995); Kern v Blethen-Coluni, 240 Mich App 333, 336; 612 NW2d 838
(2000).4 To demonstrate plain error, a party must show: (1) that an error occurred, (2) that the

4
  Our Court has applied two different standards to unpreserved issues in the civil context: plain-
error, see, e.g., Wischmeyer, 449 Mich at 483 & n 26; Mr Sunshine, ___ Mich App at ___; slip op
at 2; Kern, 240 Mich App at 336, and the so-called “raise-or-waive” rule, see, e.g., In re
Conservatorship of Murray, 336 Mich App 234, 240-242; 970 NW2d 372 (2021); Jawad A Shah,
MD, PC v State Farm Mut Auto Ins Co, 324 Mich App 182, 192-194, 194 n 5; 920 NW2d 148
(2018) (acknowledging that the Michigan Supreme Court has applied the plain-error standard in
the civil context and noting that the Michigan Supreme Court has yet to hold that plain-error is the
correct standard to apply). Our Supreme Court has yet to state definitively which standard is the

                                                -4-
error was plain, and (3) that the plain error affected the outcome of the proceedings. Mr Sunshine,
___ Mich App at ___; slip op at 2.

                              III. CONSENT FOR SETTLEMENT

       Beard argues that the trial court erred in granting summary disposition of his claim for
underinsured motorist benefits on the basis of his settlement of his earlier lawsuit without
Progressive’s consent. He contends that the terms of his policy with Progressive were ambiguous,
and he did not need to obtain permission to settle with Robinson and Flexdrive because the relevant
consent provision only applied to uninsured motorist benefits, not underinsured motorist benefits.
We disagree.

        Because uninsured and underinsured motorist benefits are “not mandated by statute, the
scope, coverage, and limitations of underinsurance protection are governed by the insurance
contract and the law pertaining to contracts.” Dawson v Farm Bureau Mut Ins Co of Michigan,
293 Mich App 563, 568; 810 NW2d 106 (2011). Regarding uninsured and underinsured motorist
benefits, this Court “must look to policy interpretation to determine under what circumstances
benefits are to be provided.” Auto-Owners Ins Co v Leefers, 203 Mich App 5, 10-11; 512 NW2d
324 (1993). “Insurance policies are interpreted like any other contract.” Bridging Communities,
Inc v Hartford Cas Ins Co, ___ Mich App ___, ___; ___ NW2d ___ (2023) (Docket No. 355955);
slip op at 5, lv pending. “Our goal in contract interpretation is to give effect to the intent of the
parties, to be determined first and foremost by the plain and unambiguous language of the contract
itself.” Kendzierski v Macomb County, 503 Mich 296, 311; 931 NW2d 604 (2019) (citation
omitted). “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. (citation omitted). “A contract is ambiguous when, after considering the entire contract,
its words may reasonably be understood in different ways.” Auto-Owners Ins Co v Seils, 310 Mich
App 132, 146; 871 NW2d 530 (2015). “Thus, when a fair reading of the entire contract of
insurance leads one to understand that there is coverage under particular circumstances and another
fair reading of it lends one to understand there is no coverage under the same circumstances the
contract is ambiguous.” Id. (quotation marks and citation omitted). “An ambiguous provision in
an insurance contract is construed against the insurer and in favor of coverage.” Id.

       We agree with Progressive that the UM/UIM benefits provision in the Progressive policy
includes the term “underinsured motor vehicle,” but Beard’s arguments fail for a more basic
reason: under the policy, settlement without consent may preclude coverage for uninsured,
underinsured, or other benefits. Two other provisions in the policy govern settlements without
consent, and neither references “uninsured” or “underinsured” vehicles. The first relevant

appropriate standard for the civil context. In practice, both standards are unforgiving. Here, we
apply the plain-error standard because it provides a workable standard, as opposed to “raise-or-
waive,” which treats an issue as waived unless a panel decides there is a compelling reason to
address an otherwise waived issue. See Walters v Nadell, 481 Mich 377, 387-388; 751 NW2d 431
(2008); see also Shah, 324 Mich App at 194-195 (declining to exercise jurisdiction to review a
waived issue for want of a compelling reason to do so).

                                                -5-
provision is found in the exclusions of the UM/UIM coverage provisions. It states that UM/UIM
coverage “will not apply” “to bodily injury sustained by any person if that person or the legal
representative of that person settles without our written consent.” There is no mention of an
“uninsured” or “underinsured” motor vehicle in this exclusion. The second provision is found in
the policy’s “General Provisions” section (Part VII). It provides: “If an insured person recovers
from another without our written consent, the insured person’s right to payment under any affected
coverage will no longer exist.” As with the relevant UM/UIM exclusion, there is no mention of
an uninsured or underinsured motor vehicle in this general provision. All that matters under these
provisions to preclude coverage (underinsured, uninsured, or other types of coverage) is that the
insured, Beard, settled without Progressive’s consent. There is no dispute that is what happened
here. Accordingly, the trial court properly granted summary disposition of Beard’s UM/UIM
claim.

        Because Beard settled his previous case with Robinson without Progressive’s consent,
Progressive is not required to provide UM/UIM coverage to Beard. The policy unambiguously
states that UM/UIM coverage “will not apply . . . to bodily injury sustained by any person if that
person or the legal representative of that person settles without our written consent.” Because
Beard settled his previous lawsuit arising out of the accident without Progressive’s consent, the
trial court did not err in granting summary disposition of Beard’s claim for UM/UIM benefits.

        As stated, the parties focus on whether the UM/UIM benefits provision in the Progressive
policy includes the term “underinsured motor vehicle.” Beard says that it does not, pointing out
that the term “underinsured motor vehicle” is absent from the UM/UIM provision, which only
includes the term “uninsured motor vehicle.” Progressive, on the other hand, argues that the
definition of “uninsured motor vehicle” encompasses “underinsured” vehicles. We agree with
Progressive.

         Beard incorrectly relies on language from the “Insuring Agreement” portion of the
UM/UIM coverage section that, he says, means he was only prohibited from settling with an
uninsured driver, not an underinsured driver. That language states, in relevant part: “Any judgment
or settlement for damages against an owner or operator of an uninsured motor vehicle that arises
out of a lawsuit brought without our written consent is not binding on us.” Beard’s reliance on
this language is misplaced because it relates to a lawsuit brought without consent, not a settlement
reached without consent.

         Even if this provision applied, under the policy’s terms, the definition of “uninsured motor
vehicle” in the policy includes underinsured vehicles. The term “underinsured motor vehicle” is,
as Beard notes, absent from the policy. But, as Progressive asserts, the policy defines an
“uninsured motor vehicle” as, in relevant part, a vehicle to which “a bodily injury liability . . .
policy applies at the time of the accident, but the sum of all applicable limits of liability for bodily
injury is less than the coverage limit for Uninsured/Underinsured Motorist Coverage shown on the
declarations page.” Here, a bodily injury liability policy applied to the vehicle driven by Robinson
at the time of the accident—it had a coverage limit of $20,000. The sum of the applicable limits
of liability for bodily injury—$20,000—was less than the coverage limit for UM/UIM coverage
shown on Beard’s declarations page—$50,000. It was underinsured and constituted an “uninsured
motor vehicle” under the Progressive policy. That the policy only includes the term “uninsured
motor vehicle,” not “underinsured motor vehicle,” is immaterial here because, the definition of

                                                  -6-
“uninsured motor vehicle” encompasses underinsured vehicles. See Wilkie, 469 Mich at 59
(recognizing that this Court will not “discern ambiguity solely because an insured might interpret
a term differently than the express definition provided in a contract.”) (quotation marks and citation
omitted). In other words, whether the “natural and ordinary meaning” of “underinsured” differs
from that of “uninsured,” as Beard contends, is irrelevant when the policy provides its own
definitions. See Cavalier Mfg Co v Employers Ins of Wausau (On Remand), 222 Mich App 89,
94; 564 NW2d 68 (1997) (“[T]he terms of an insurance contract are interpreted according to the
definitions set forth therein, or, if none are provided, are given a meaning in accordance with their
common usage.”).

                                       IV. SUBROGATION

        Beard also argues that even if Progressive is correct that settlement agreements entered
with “underinsured” parties require the insurer’s consent, this requirement is arbitrary in the
absence of a subrogation clause in the policy. Though somewhat unclear, Beard appears to argue
that, without a right to subrogation, requiring an insurer’s consent to settle has no purpose and is
unreasonable. We disagree.

        Beard asserts that the policy does not contain a subrogation clause, and Progressive,
therefore, does not have a right to subrogation. He is incorrect for two reasons. First, the policy
contains a subrogation clause. Though it may not be explicitly labeled as a subrogation clause, we
look to substance not form. See Highland Park v State Land Bank Auth, 340 Mich App 593, 607;
986 NW2d 638 (2022) (“Courts are not bound by a party’s choice of labels because this would
effectively elevate form over substance.”) (quotation marks and citation omitted). The general
provisions section of the policy (Part VII) contains a subheading entitled, “Our Rights to Recover
Payment.” This subsection of the policy provides that Progressive is “entitled to the rights of
recovery that the insured person to whom payment was made has against another, to the extent of
our payment.” It further provides:

              When an insured person has been paid by us and also recovers from another,
       the amount recovered will be held by the insured person in trust for us and
       reimbursed to us to the extent of our payment. If we are not reimbursed, we may
       pursue recovery of that amount directly against that insured person.

This is subrogation language. See Black’s Law Dictionary (11th ed ) (defining “subrogation” as,
in relevant part: “The principle under which an insurer that has paid a loss under an insurance
policy is entitled to all the rights and remedies belonging to the insured against a third party with
respect to any loss covered by the policy.”).

       Second, regardless of the presence of a subrogation clause, the plain language of the
Progressive policy bars Beard’s claim for UM/UIM benefits. We may not “abrogate[]
unambiguous contractual provisions based on [our] own independent assessment of
‘reasonableness,’ ” because it would “undermine[] the parties’ freedom of contract.” Rory, 473
Mich at 468-469. Because Beard’s claim for UM/UIM benefits is unambiguously barred under
the policy, the reasonableness or purpose of the requirement for a policyholder to seek
Progressive’s consent is irrelevant. Beard has failed to demonstrate that the trial court committed

                                                 -7-
plain error by granting Progressive’s motion for summary disposition regardless of whether the
policy contains a subrogation clause.

       We affirm.

                                                         /s/ Sima G. Patel
                                                         /s/ Noah P. Hood

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