Court Opinion

ID: 9691766
Source: CourtListenerOpinion
Date Created: 2023-08-25 05:09:28.827173+00
Date Added: 2024-06-11T11:19:11.437677
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

DAVID SPLAN,                                                         UNPUBLISHED
                                                                     August 24, 2023
               Plaintiff-Appellee,

v                                                                    No. 360947
                                                                     Washtenaw Circuit Court
JOSHUA FINK, Personal Representative of the                          LC No. 21-000250-NI
ESTATE OF EDWIN EARL BROWN,

               Defendant,

and

HOME OWNERS INSURANCE COMPANY

               Defendant-Appellant.

Before: GADOLA, P.J., and M. J. KELLY and SWARTZLE, JJ.

PER CURIAM.

       The trial court denied Home Owners’s summary disposition because plaintiff’s policy
language was ambiguous and did not entitle Home Owners to a setoff of the underinsured’s
primary policy. We reverse.

       On April 8, 2019, Edwin Brown was driving northbound in a southbound lane, and he
caused a multivehicle collision that injured plaintiff. Plaintiff did not participate in a settlement
with Brown’s insurance company which resolved the claims of other parties who were injured by
the collision. Consequently, plaintiff did not receive any benefit from Brown’s insurance
company.

        Plaintiff then sued various parties for damages, including his insurance company, Home
Owners, for denying him payment under its underinsured-motorist policy. Home Owners moved
for summary disposition under MCR 2.116(C)(10), arguing that it was entitled to setoff of
plaintiff’s underinsured-motorist benefits as reduced by Brown’s primary-policy limit because the
parties’ relevant policy language stated:

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       4. LIMIT OF LIABILITY:

               a. Our Limit of Liability for Underinsured Motorist Coverage shall not
               exceed the lowest of:

                      (1) the amount by which the Underinsured Motorist Coverage limits
                      stated in the Declarations exceed the total limits of all bodily injury
                      liability bonds and policies available to the owner or operator of the
                      underinsured automobile; or

                      (2) the amount by which compensatory damages, including but not
                      limited to loss of consortium, because of bodily injury exceed the
                      total limits of those bodily injury liability bonds and policies.

               b. The Limit of Liability is not increased because of the number of

                      (1) automobiles shown or premiums charged in the Declarations;

                      (2) claims made or suits brought;

                      (3) persons injured; or

                      (4) automobiles involved in the occurrence,

Home Owners argued that plaintiff’s underinsured-motorist policy covered damage up to
$250,000, whereas Brown’s primary policy covered damage up to $500,000. Thus, when setting
$250,000 off by $500,000, Home Owners’s liability amount would be zero.

       The trial court denied Home Owners’s motion for summary disposition because the policy
was ambiguous and no amounts were paid to plaintiff from Brown’s insurance policy, meaning
there was no amount from Brown to setoff against plaintiff’s policy with Home Owners.

       Home Owners moved for reconsideration, arguing that our Supreme Court in Wilkie v
Auto-Owners Ins Co, 469 Mich 41, 49-50; 664 NW2d 776 (2003), had held that policy language
substantially similar to the policy in this case had setoff the amount owed by the policy limit of
the underinsured, not the amount paid from the underinsured’s policy. The trial court denied the
motion for reconsideration.

      Home Owners now submits its interlocutory appeal by leave granted. David Splan v Estate
of Edwin Earl Brown, unpublished order of the Court of Appeals, issued September 23, 2022
(Docket No. 360947).

        “We review de novo a trial court’s decision to grant or deny a motion for summary
disposition.” Sherman v City of St Joseph, 332 Mich App 626, 632; 957 NW2d 838 (2020)
(citations omitted). This Court reviews a motion brought under MCR 2.116(C)(10) “by
considering the pleadings, admissions, and other evidence submitted by the parties in the light
most favorable to the nonmoving party.” Patrick v Turkelson, 322 Mich App 595, 605; 913 NW2d
369 (2018). “Summary disposition is appropriate if there is no genuine issue regarding any

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material fact and the moving party is entitled to judgment as a matter of law.” Sherman, 332 Mich
App at 632.

        The no-fault act, MCL 500.3101 et seq, does not require underinsured-motorist coverage.
“Therefore, the terms of the insurance contract control any potential entitlement to UM/UIM
benefits.” Gueye v State Farm Mut Auto Ins Co, ___ Mich App ___, ___; ___ NW2d ___ (2022)
(Docket No. 358992), slip op at 3 (cleaned up). “The proper interpretation of a contract is a
question of law, which this Court reviews de novo.” Wilkie, 469 Mich at 48. “The same standard
applies to the question of whether an ambiguity exists in an insurance contract.” Id. “Accordingly,
we examine the language in the contract, giving it its ordinary and plain meaning if such would be
apparent to a reader of the instrument.” Id. “Where the language of an insurance policy is clear
and unambiguous, it must be enforced as written.” Auto-Owners Ins Co v Harvey, 219 Mich App
466, 469, 556 NW2d 517 (1996).

         Plaintiff argues that the relevant policy language—“the amount we pay will be reduced by
any amounts paid or payable for the same bodily injury”—clearly intends a setoff only when other
payments were made regarding plaintiff’s bodily injury. The payments made under Brown’s
insurance policy were to other individuals for their own injuries, not plaintiff’s injuries. Plaintiff
ignores, however, section 4a of his policy with Home Owners, which limits Home Owners’s
liability to “the amount by which the Underinsured Motorist Coverage limits stated in the
Declarations exceed the total limits of all bodily injury liability bonds and policies available to the
owner or operator of the underinsured automobile.” (Emphasis added.) The plain reading of the
policy’s liability limit considers all bodily injury policies available to Brown, regardless of whether
payment was made to plaintiff or someone else.

        This reading is consistent with our Supreme Court’s ruling in Wilkie, which concerned
policy language that was substantially similar to the policy in this case. Specifically, the language
in Wilkie read as follows: “Our Limit of Liability for Underinsured Motorists Coverage shall not
exceed the lowest of…the amount by which the Underinsured Motorist Coverage limits stated in
the Declarations exceed the total limits of all bodily injury liability bonds and policies available to
the owner or operator of the underinsured automobile.” Wilkie, 469 Mich at 44 n 3. Our Supreme
Court in that case held that “this provision cannot be reasonably understood to be referring to the
amount actually received by the claimant because the provision specifically refers to the total
available to the owner.” Id. at 49-50.

         In this case, the total limit of all bodily injuries available to Brown was $500,000. The
amount by which the underinsured-motorist coverage stated in the declarations of Home Owners’s
no-fault policy with plaintiff was $250,000. When setting $250,000 off by $500,000, the resulting
liability is $0. Therefore, when considering the plain language of the policy limits, as well as our
Supreme Court’s precedent in Wilkie, the trial court erred when it denied summary disposition to
Home Owners.

       Reversed.

                                                               /s/ Michael F. Gadola
                                                               /s/ Michael J. Kelly
                                                               /s/ Brock A. Swartzle

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