Court Opinion

ID: 9575510
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:14:25.698893+00
Date Added: 2024-06-11T12:48:16.707760
License: Public Domain

Riley, C.J.
(dissenting). I cannot agree with the majority that the New Hampshire policy was not *243in effect at the time of the fire. I would reverse the decision of the Court of Appeals with respect to plaintiffs’ breach of contract claim.
The body of the New Hampshire policy made multiple references to the inception time of 12:01 a.m. However, as the majority notes, the Michigan Amendatory Endorsement brought the policy into compliance with Michigan law by stating that "[t]he time of inception and the time of expiration of this policy and of any schedule or endorsement attached shall be Noon Standard Time.” However, the endorsement continued "[t]o the extent that coverage in this policy replaces coverage in other policies terminating at 12:01 a.m. (Standard Time) on the inception date of this policy, this policy shall be effective at 12:01 a.m. (Standard Time) instead of at Noon Standard Time.” The New Hampshire policy replaced a policy issued by Great American Insurance Company which expired at 12:01 a.m.1 Thus, under the plain terms of the endorsement, the New Hampshire policy was in effect at the time of the fire because it was replacing a policy terminating at 12:01 a.m.
Several familiar maxims of insurance contract interpretation bear repeating. As noted in Murphy v Seed-Roberts Agency, 79 Mich App 1, 7-8; 261 NW2d 198 (1977):
Policies of insurance are much the same as other contracts; they are matters of agreement by the parties and the job of the courts is to determine what that agreement was and enforce it *244accordingly. Eghotz v Creech, 365 Mich 527, 530; 113 NW2d 815 (1962). If the terms of that contract are plain and unambiguous, their plain meaning should be given effect. Wozniak v John Hancock Mutual Life Ins Co, 288 Mich 612; 286 NW 99 (1939). An ambiguous policy, however, is open to construction and questions of interpretation may well present jury questions. Clark v Hacker, 345 Mich 751; 76 NW2d 806 (1956).
Insurance policies must be interpreted by reading them as a whole. Sloan v Phoenix of Hartford Ins Co, 46 Mich App 46; 207 NW2d 434 (1973). Courts should attempt to harmonize all parts of a contract of insurance so as to give effect to each clause contained therein. Jackson v British America Assurance Co, 106 Mich 47; 63 NW 899 (1895). Such a reading of the contract as a whole may be necessary to determine whether ambiguity exists in particular clauses. Ins Co of North America v L C Young Painting & Decorating Co, 11 Mich App 304; 161 NW2d 24 (1968). Cf., DeLand v Fidelity Health & Accident Mutual Ins Co, 325 Mich 9; 37 NW2d 693 (1949).
Further, insurance contracts are in the nature of an adhesion contract, and the court should generally uphold the reasonable expectations of the insured. See Zurich Ins Co v Rombough, 384 Mich 228; 180 NW2d 775 (1970). See also Hagerl v Auto Club Group Ins, 157 Mich App 684; 403 NW2d 197 (1987).
The endorsement is not ambiguous. It clearly provides for coverage if the preceding policy terminated at 12:01 a.m. Further, Mrs. Smart testified that she knew the Great American policy terminated at 12:01 a.m. and that she was interested in continuous coverage. Thus, plaintiffs could have reasonably expected the New Hampshire policy to become effective at 12:01 a.m.
By holding that § 2832 of the Insurance Code *245must be read into the contract, the majority renders the second quoted portion of the endorsement nugatory. This is despite the fact that the policy complied with the minimum of Michigan law (an inception time of noon standard time), but also provided the insured an additional twelve hours of coverage (12:01 a.m. to 12:01 p.m.) in the event that the New Hampshire policy replaced a policy terminating at 12:01 a.m. While the Insurance Code requires insurers to issue policies in compliance with its provisions, nothing in the code precludes insurers from offering benefits exceeding the statutorily required mínimums.
The majority decision contravenes the purpose of the Insurance Code. In Ford Motor Co v Lumbermens Mutual Casualty, 413 Mich 22; 319 NW2d 320 (1982), this Court stated that "[t]he extensive regulation of the insurance industry provided for in [the] code indicates a legislative purpose to protect policyholders.” Id., 38. The Court then interpreted the statutory policy to comport with this purpose.
The case of Armstrong v Western Manufacturers’ Mutual Ins Co, 95 Mich 137; 54 NW 637 (1893), is similar to the present case. In Armstrong, the defendant had issued a policy which substantially complied with the "Michigan Standard Policy” in effect at the time, but contained a clause not included in the statute. The Insurance Code at the time provided that all policies not in compliance with the act were void. The plaintiff sustained a loss and sued to enforce the contract. The trial court directed a verdict in favor of the defendant, finding that the nonconforming policy was void. This Court reversed that decision.
The Court determined that the statute must be construed in the light of the legislative intent to protect policyholders. To further that legislative *246purpose, the Court interpreted the statutory term "void” to mean "voidable.”
In using the word "void” the Legislature certainly did not contemplate that an insurance company might insert a clause not provided for in the standard policy, receive premiums year after year upon it, and, when loss occurs, say to the insured, "Your policy is void, because we inserted a clause in it contrary to the law of Michigan.” Such a result would be a reproach upon the Legislature and the law. The law, so construed, instead of operating to protect the insured, would afford the surest means to oppress and defraud them, and thus defeat the very object the Legislature had in view. [Id., 139-140.]
It is true that Armstrong is somewhat distinguishable from this case due to the fact that the present Insurance Code does not contain a provision voiding nonconforming policies. However, the rationale of Armstrong, that the Insurance Code must be construed to effectuate the legislative purpose, is as valid as if the case had just been decided. See also DeLand, supra (statutory cancellation clause not read into contract not containing cancellation provision).
In sum, plaintiffs contracted with New Hampshire to provide coverage greater than that required by statute. "[A] provision more favorable to the insured than the standard policy may be enforceable by the insured.” 43 Am Jur 2d, Insurance, § 26, p 104. New Hampshire drafted this contract and is presumed to know its contents as well as the law of this state. New Hampshire accepted premiums on the basis of the contract issued, including the endorsement providing that the policy could become effective at 12:01 a.m. Thus, plaintiffs have paid for coverage under the *247contract, which the majority holds New Hampshire could not possibly offer because, as a matter of law, no insurance policy can terminate at 12:01 a.m. Rather than protecting the policyholder, the statute is being used by New Hampshire to shield itself from its contractual obligations.
I would hold the contract enforceable as written, and would reverse the decision of the Court of Appeals.
Griffin, J., took no part in the decision of this case.

 While the majority is correct that the Great American policy has not been furnished and, thus, it is not apparent whether that policy contained a Michigan Amendatory Endorsement, defendant never contested the termination time of the Great American policy. In fact, throughout this case, defendant has premised its argument on the basis that the Great American policy did terminate at 12:01 a.m. Therefore, I conclude that defendant waived any argument that the Great American policy terminated other than at 12:01 a.m.