Court Opinion

ID: 4704079
Source: CourtListenerOpinion
Date Created: 2021-07-16 09:08:18.326748+00
Date Added: 2024-06-11T08:05:07.948030
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

ELIAS YAGHNAM,                                                     UNPUBLISHED
                                                                   July 15, 2021
               Plaintiff-Appellant,
v

JOHN DOE,

               Defendant,

v                                                                  No. 353547
                                                                   Wayne Circuit Court
MICHIGAN INSURANCE COMPANY,                                        LC No. 19-013227-NI

               Defendant-Appellee.

Before: RIORDAN, P.J., and M. J. KELLY and SHAPIRO, JJ.

PER CURIAM.

        Plaintiff, Elias Yaghnam, appeals as of right the trial court order granting summary
disposition to defendant Michigan Insurance Company. Because there are no errors warranting
reversal, we affirm.

                                       I. BASIC FACTS

        On October 2, 2016, Yaghnam was injured as a result of a motor-vehicle crash. At the
time, Yaghnam had an automobile insurance policy with Michigan Insurance Company. Relevant
to this appeal, the policy provided uninsured/underinsured (UM/UIM) motorist coverage. In the
section detailing limitations on the uninsured/underinsured benefits, the policy provided that
“[a]ny claim must be reported to the company within three years of the date of loss.” On October
3, 2019, three years and one day after the motor-vehicle crash, Yaghnam filed a complaint alleging
negligence against the unknown driver of the other vehicle involved in the crash. He also brought
a claim for UM/UIM benefits against Michigan Insurance Company.

        Michigan Insurance Company moved for summary disposition, contending that the three-
year statute of limitation in MCL 600.5805(2) applied and barred Yaghnam’s claim. In response,
Yaghnam asserted that he had brought a claim for breach of contract, so the six-year limitations

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period in MCL 600.5807(9) was the relevant statute of limitations. In its reply brief, Michigan
Insurance Company argued that Yaghnam had not pleaded a claim for breach of contract. Further,
it asserted that, under the plain language of the policy, Yaghnam was required to report a claim for
UM/UIM benefits “within three years of the date of loss,” which he had not done.

        Following argument on the motion, the trial court granted Michigan Insurance Company’s
motion. In doing so, the court reasoned that although Yaghnam was seeking benefits under the
contract, he did not allege a breach of contract claim against Michigan Insurance Company. The
court recognized that, because UM/UIM motorist benefits were optional, the terms of the insurance
policy governed the dispute.1 The court stated that the policy required Yaghnam to provide notice
of any claim for uninsured/underinsured benefits within three years of the date of the loss, which
had not been done. Consequently, the court granted the motion.

        In his motion for reconsideration, Yaghnam argued that he provided notice of the claim
within three years because, on October 19, 2018, Michigan Insurance Company declined to
entertain a settlement of his UM/UIM claims. In support, he submitted an e-mail exchange
between his lawyer and the lawyer for Michigan Insurance Company. He also contended that he
had pleaded a claim for breach of contract in his complaint, but that if the court continued to
conclude that he had not, he should be permitted to amend his complaint to state such a claim. The
trial court denied the motion.

                                 II. SUMMARY DISPOSITION

                                 A. STANDARD OF REVIEW

         Yaghnam argues that the trial court erred by granting summary disposition. We review de
novo a trial court’s decision on a motion for summary disposition. Barnard Mfg Co, Inc v Gates
Performance Engineering, Inc, 285 Mich App 362, 369; 775 NW2d 618 (2009). The trial court
purported to grant summary disposition under MCR 2.116(C)(7). Summary dismissal is
appropriate under MCR 2.116(C)(7) when an action is barred because of the “statute of
limitations.” However, the court also held that Yaghnam failed to state a claim for breach of
contract.2 “A court may grant summary disposition under MCR 2.116(C)(8) if ‘[t]he opposing
party has failed to state a claim on which relief can be granted.’ A motion brought under subrule
(C)(8) tests the legal sufficiency of the complaint solely on the basis of the pleadings.” Dalley v
Dykema Gossett, 287 Mich App 296, 304; 788 NW2d 679 (2010), quoting MCR 2.116(C)(8)
(alteration in original). “When considering such a motion, a trial court must accept all factual
allegations as true, deciding the motion on the pleadings alone.” El-Khalil v Oakwood Healthcare,
Inc, 504 Mich 152, 160; 934 NW2d 665 (2019). “A motion under MCR 2.116(C)(8) may only be

1
 Because they are not required by the no-fault act, UM benefits “are purely contractual and are
construed without reference to the no-fault act.” Rory v Continental Ins Co, 473 Mich 457, 466;
703 NW2d 23 (2005). Instead, the language of the insurance policy at hand “dictates under what
conditions uninsured motorist benefits will be provided.” Auto-Owners Ins Co v Harvey, 219
Mich App 466, 470; 556 NW2d 517 (1996).
2
    See note 2, below.

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granted when a claim is so clearly unenforceable that no factual development could possibly justify
recovery.” Id.

                                         B. ANALYSIS

     Michigan Insurance Company argues that the applicable limitations period is set forth in
MCL 600.5805(2), which provides:

               (2) Except as otherwise provided in this section, the period of limitations is
       3 years after the time of the death or injury for all actions to recover damages for
       the death of a person or for injury to a person or property.

Yaghnam argues that the applicable limitations period is set forth in MCL 600.5807(9), which
provides:

             (9) The period of limitations is 6 years for an action to recover damages or
       money due for a breach of contract that is not described in subsections (2) to (8).

        To determine the applicable limitations period, a court considers the “gravamen of an
action” from the complaint as a whole, looking beyond procedural labels, to determine the exact
nature of the claim. Adams v Adams, 276 Mich App 704, 710-711; 742 NW2d 399 (2007). In his
complaint, Yaghnam labeled his claim against Michigan Insurance Company as one for UM/UIM
benefits, and he made the following allegations:

               16. At the time of the incident described [in Count I], the vehicle in which
       Plaintiff was operating in a vehicle [sic] insured through a policy of insurance
       issued by the Defendant, MICHIGAN INSURANCE COMPANY.

              17. That the subject policy contains a provision for payment of
       un/underinsured motorist benefits.

              18. Upon information and belief, the other driver/vehicle involved in the
       accident was un/underinsured.

              19. That Plaintiff as a direct result of the aforementioned automobile
       accident, are [sic] entitled to un/underinsured motorist benefits, pursuant to the
       insurance policy with Defendant.

        Yaghman argues that the above language states a claim for breach of contract. We
disagree. To establish a prima facie case for breach of contract, “[a] party asserting a breach of
contract must establish by a preponderance of the evidence that (1) there was a contract (2) which
the other party breached (3) thereby resulting in damages to the party claiming breach.” Miller–
Davis Co v Ahrens Const, Inc, 495 Mich 161, 178; 848 NW2d 95 (2014). The causation element
requires that the party show “a causal link between the asserted breach of contract and the claimed
damages.” Gorman v American Honda Motor Co, 302 Mich App 113, 118-119; 839 NW2d 223
(2013). Here, even accepting the factual allegations in Yaghnam’s complaint as true, he has only
alleged that there was a contract between Michigan Insurance Company and him. He has not made
any allegations that Michigan Insurance Company breached that contract. For example, the

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complaint is devoid of any indication that he made a timely claim under his automobile insurance
policy to recover UM/UIM benefits. Further, even if he had made such a claim, he has not pleaded
any facts indicating that Michigan Insurance Company then breached the contract by not paying
the owed benefits. Thus, like the trial court, we conclude that Yaghnam did not plead a breach-
of-contract claim. As a result, there is no basis to apply the six-year limitations period applicable
to breach of contract actions.3

       That does not end our inquiry. Under MCR 2.116(I)(5), “[i]f the grounds asserted [for
summary disposition] are based on subrule (C)(8), (9), or (10), the court shall give the parties an
opportunity to amend their pleadings as provided by MCR 2.118, unless the evidence then before
the court shows that amendment would not be justified.” See also MCR 2.118(A)(2) (“Leave [to
amend] shall be freely given when justice so requires.”). “[A]n amendment is not justified if it
would be futile.” Liggett Restaurant Group, Inc v Pontiac, 260 Mich App 127, 138; 676 NW2d
633 (2003).

       Here, in his motion for reconsideration, Yaghnam argued that he should be permitted to
amend his complaint to state a claim for breach of contract. He did not, however, present his
proposed amended complaint to the court. “If a plaintiff does not present its proposed amended
complaint to the court, there is no way to determine whether an amendment is justified.” Anton,
Sowerby & Assoc, Inc v Mr C’s Lake Orion, LLC, 309 Mich App 535, 551; 872 NW2d 699 (2015).
Based on the evidence presented to the trial court, such an amendment would be futile.

       Under the plain language of the insurance policy, Yaghnam was required to report his claim
for UM/UIM benefits to Michigan Insurance Company “within three years of the date of loss.”4
In the proceedings below, Yaghnam presented no evidence indicating that he satisfied his
contractual obligation to report his UM/UIM claim to Michigan Insurance Company within three

3
 It is not clear whether the trial court concluded that because Yaghnam did not plead a claim for
breach of contract, his claim was one to recover damages for injury to a person or property that
would be subject to the limitations period in MCL 600.5805(2). Based on the entirety of the record,
we conclude that, although the court purported to grant summary disposition under MCR
2.116(C)(7) based on a claim barred by the applicable statute of limitations, it actually dismissed
Yaghnam’s complaint under MCR 2.116(C)(8) for failure to state a claim upon which relief could
be granted. Indeed, after review of the pleadings, the trial court repeatedly stated that Yaghnam
had not pleaded a claim for breach of contract. In contrast, the court never made any comments
suggesting that the limitations period in MCL 600.5805(2) applied.
4
  The interpretation of an insurance contract is a question of law that we review de novo. Twichel
v MIC Gen Ins Corp, 469 Mich 524, 533; 676 NW2d 616 (2004). “Because insurance policies are
contractual agreements, they are subject to the same rules of contract interpretation that apply to
contracts in general.” Sherman-Nadiv v Farm Bureau Gen Ins Co of Mich, 282 Mich App 75, 78;
761 NW2d 872 (2008). We determine the meaning of a contract in light of the plain and ordinary
meaning that would be apparent to a reader of that contract. Wilkie v Auto-Owners Ins Co, 469
Mich 41, 47; 664 NW2d 776 (2003). An unambiguous contract must be enforced as written. Rory,
473 Mich at 468.

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years of the date of loss. Instead, his only proof that Michigan Insurance Company was aware of
the claim was an e-mail exchange between his lawyer and Michigan Insurance Company’s lawyer.
In that exchange, Yaghnam’s lawyer first noted that Yaghnam might have a claim for UM/UIM
coverage, so he did not want to sign a release pertaining to the personal protection insurance
benefits to also release that potential UM/UIM claim. It is axiomatic that a statement that a claim
might exist is insufficient to give notice that such a claim is being made.

         Later in the e-mail chain, when asked whether there was an UM “portion to this claim that
was dismissed,” Yaghnam’s lawyer stated, “No, I never included a claim for UM benefits in my
original complaint or the amended complaint.” That response was made at 1:57 p.m. on October
19, 2019. Because there was no such claim, Michigan Insurance Company’s lawyer agreed to
allow Yaghnam’s lawyer to amend the release to delete language that would preclude a claim for
UM benefits. Thereafter, less than twenty minutes after assuring Michigan Insurance Company’s
lawyer that he had not made a claim for UM benefits, Yaghnam’s lawyer asked if Michigan
Insurance Agency would be “willing to entertain settlement of my client’s UM claim?”5 The
response was “No,” with a smiley face. Thus, in context, it is clear that this was not a serious
request and was not understood as a serious request. Instead, the entirety of the e-mail chain shows
that, as of October 19, 2018, Yaghnam recognized that he might have a claim for UM benefits, so
he did not want to sign a release that would bar recovery on that claim. Further, it shows that he
had not yet made any claim for such benefits to Michigan Insurance Company, as reflected by his
lawyer’s unequivocal and direct statement that such a claim had not been made in either the
complaint or the amended complaint. His tongue-in-cheek statement at the end of the e-mail chain
does not satisfy the notice-provision in the insurance policy. Because Yaghnam could marshal no
additional evidence supporting that he had a viable claim for breach of contract, any amendment
to the complaint to state a claim for breach of contract would be futile.

       The trial court, therefore, did not err by granting Michigan Insurance Company’s motion
for summary disposition.

       Affirmed. Michigan Insurance Company may tax costs as the prevailing party. MCR
7.219(A).

                                                             /s/ Michael J. Riordan
                                                             /s/ Michael J. Kelly
                                                             /s/ Douglas B. Shapiro

5
    In full, Yaghnam’s lawyer wrote:
                Thank you Stephanie, and sorry to bug you while you are out of town . . . .
         hopefully on vacation. I have attached the signed release. Let me know when you
         have withdrawn the motion.

                With that being said though, would your client be willing to entertain
         settlement of my client’s UM claim? If so, please advise; and enjoy your weekend!

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