Court Opinion

ID: 9574300
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:04:00.928548+00
Date Added: 2024-06-11T12:44:20.534482
License: Public Domain

M. J. Talbot, J.
(dissenting). I must dissent.
The plaintiffs insurance policy contained the following provision under the heading "Authorization for Excluded Driver”:
warning — When a named excluded person operates a vehicle all liability coverage is void — no one is insured. Owners of the vehicle and others legally responsible for the acts of the named excluded person remain fully personally liable.
MCL 500.3009(2); MSA 24.13009(2) authorizes use of a named-driver exclusion:
If authorized by the insured, automobile liability or motor vehicle liability coverage may be excluded when a vehicle is operated by a named person.
This section also requires that the identical language in the warning quoted above be included in the policy to be valid.
*280In the policy at issue, the statutorily required warning was written verbatim. In addition, the exclusion contained the following language implementing the statute:
In the event a vehicle insured under any policy to which this authorization applies is involved in a loss, I understand that if the vehicle was then being driven by a named excluded person:
1. The following coverages under the policy would be void and of no effect:
Bodily Injury Liability Collision
Property Damage Liability Car Rental
Comprehensive Sound Equipment
The majority has found that the provisions at hand are ambiguous in their scope.
It is a well-established principle in contract law that an ambiguous provision in an insurance contract must be construed against the drafting insurer and in favor of the insured. If, however, the provision is clear and unambiguous, the terms are to be taken and understood in their plain and ordinary sense. Clevenger v Allstate Ins Co, 443 Mich 646, 654; 505 NW2d 553 (1993). A contract is ambiguous when its words may be reasonably understood in different ways. Raska v Farm Bureau Mutual Ins Co, 412 Mich 355, 362; 314 NW2d 400 (1982). If a fair reading can lead to different results, the contract is ambiguous and should be construed against its drafter and in favor of coverage. Id.
The majority believes that an ambiguity is created by the policy’s silence with respect to what effect theft by a named excluded driver may have on coverage. The answer is within the majority opinion itself where it states:
[The insurance policy] contained an excluded-*281driver provision that did indicate that various coverages, including comprehensive (theft) and collision coverages, were void if the vehicle were operated by a named excluded driver. [Ante, at 277.]
I cannot agree that this policy is silent with respect to coverage where a named excluded driver has stolen a vehicle. The words in the provision are loud, clear, and explicit: "all liability coverage is void.”
Furthermore, the majority states that two possible interpretations of this contract stem from this "silence.” The majority adopts plaintiffs interpretation that the named-driver exclusion applies only where the excluded driver is operating the vehicle with the insured’s permission. This position, however, is inherently illogical. Under the majority’s reasoning, coverage exists every time the excluded driver takes the vehicle without permission. The only situation where coverage would not exist would be in the unlikely circumstance where the insured affirmatively allows the excluded driver to operate the vehicle.
To reach this rather convoluted result, the majority relies upon the "rule of reasonable expectation.” In Powers v DAIIE, 427 Mich 602, 611; 398 NW2d 411 (1986), the Supreme Court applied the rule of reasonable expectation, as well as other rules of construction, to void exclusions in policies where the insurer’s method of exclusion — "by the definition of terms at variance with their common meaning, which most policyholders would consider clear without definition” — were found to be ambiguous. The Court considered whether the policyholder, upon reading the liability provisions, could reasonably expect coverage.
In applying this test to the case at bar, the *282majority reached a conclusion that is inconsistent with the language of the policy. The majority admits that the policy does provide notice that the excluded driver not be allowed to drive the vehicle. However, the opinion continues, the reasonable expectation of the insured under this policy would be that the vehicle would be covered if the excluded driver were to operate the vehicle without permission! I disagree. How could any insured reasonably expect coverage in the face of language as clear as, "when a named excluded person operates a vehicle, all liability coverage will be void . . . ”? As Chief Justice Williams stated in Powers: "If the insurer intends to exclude such coverage when the insured person drives certain cars, it is simple enough to say so.” Id. at 633. The exclusion at issue in this case, and the effects of it, are just that: clearly and simply stated.
Moreover, the majority has dismissed summarily a recent decision by this Court that it is bound to follow pursuant to Administrative Order No. 1990-6, as extended by Administrative Order No. 1994-3.1 Verbison v Auto Club Ins Ass’n, 201 Mich App 635; 506 NW2d 920 (1993). The facts in Verbison are similar to those at bar. The plaintiffs policy included a provision excluding a named driver identical to the exclusion here. The excluded driver in Verbison found a hidden set of keys, took the car, and was involved in a collision. The defendant denied coverage pursuant to the excluded-driver endorsement. The plaintiff brought a declaratory judgment action on the basis that the constitutional guarantees of due process were abridged *283by the excluded-driver provision. The plaintiff argued that the warning in the policy was inadequate to allow him to waive knowingly his right to due process because he was not fully informed of the consequences of the exclusion. The Verbison Court responded by reaffirming this Court’s position that the policy language dictated by MCL 500.3009(2); MSA 24.13009(2) is clear and unambiguous. "[T]he Court has explicitly held that § 3009(2) presents 'no room for judicial construction or interpretation.’ ” Id. at 640, quoting Allstate Ins Co v DAIIE, 142 Mich App 436, 492; 369 NW2d 908 (1985). See also, e.g., Allstate Ins Co v DAIIE, 73 Mich App 112; 251 NW2d 266 (1976).

 Administrative Order No. 1990-6 reads in pertinent part:
A panel of the Court of Appeals must follow the rule of law established by a prior published decision of the Court of Appeals issued on or after November 1, 1990.