Court Opinion

ID: 9576093
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:20:48.136625+00
Date Added: 2024-06-11T12:52:06.945759
License: Public Domain

L. C. Root, J.
(dissenting). This is a case of two coinsureds with conflicting perspectives of a shoot*330ing incident. From the standpoint of the now deceased actor, Joseph Wasarovich, the shooting was unquestionably an intended event. From the standpoint of the defendant, Patricia Wasarovich, the shooting was arguably fortuitous and not anticipated, or an accident as defined by Arco Industries Corp v American Motorists Ins Co, 448 Mich 395, 402; 531 NW2d 168 (1995). The majority’s unprecedented choice between these conflicting perspectives in the interpretation of the contract language is the principal difference between the majority and this writer. To determine if the shooting incident is an accident, which is an occurrence covered by the insurance policy, the majority examines the shooting incident from the standpoint of the insured actor instead of from the standpoint of the arguably innocent coinsured. As addressed below, this writer respectfully dissents from this interpretation as a result of the ambiguity found in the insurance contract language and the lack of precedent directing such an interpretation.
I. INTERPRETATION OF THE OCCURRENCE-BASED INSURANCE POLICY
The first step in deciding if Michigan Basic must defend and indemnify Ms. Wasarovich is to determine if the shooting is covered by the insurance policy. In interpreting an insurance contract, the general rule is that the policy is enforced according to its terms. Arco, supra at 402. If the terms are unambiguous, they are enforced as written. Id. at 403. If ambiguity exists, the policy is enforced in favor of the insured. Group Ins Co v Czopek, 440 Mich 590, 595; 489 NW2d 444 (1992). A term left undefined is not necessarily ambiguous, but is given its commonly used meaning, id. at 596, and *331"must take into account the reasonable expectations of the parties.” Arco, supra at 403. Finally, "wherever there are two constructions that can be placed upon the policy, the construction most favorable to the policyholder will be adopted.” Powers v DAIIE, 427 Mich 602, 623; 398 NW2d 411 (1986).
In its policy, Michigan Basic contracted to defend and indemnify a claim or suit "brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies. . . .” An occurrence is defined as "an accident . . . which results, during the policy period, in bodily injury.” "Accident” is not a defined term, leaving its definition to case law interpretation, Czopek, supra, and the reasonable expectations of the parties, Arco, supra at 403. As commonly defined, an accident for insurance purposes is "an undesigned contingency, a casualty, a happening by chance, something out of the usual course of things, unusual, fortuitous, not anticipated, and not naturally to be expected.” Id. at 404-405. Accidents are interpreted from the subjective standpoint of the insured, not the injured person. Id. at 405, 407.
Applying the definitions and principles of contract construction to the present case, the shooting death of August Feldt is covered under the policy if it is an accident from the subjective standpoint of the insured. Id. at 405. The difficulty in this case arises from the fact that the insurance policy covers two insured parties with conflicting subjective standpoints, and neither the contract terms nor interpretive case law explain which standpoint of multiple insured parties is adopted to deñne an accident when the standpoints of the insured parties conflict. The contract is silent in terms of the conflicting perspectives of coinsureds, leaving two *332equally possible constructions that can be placed on the policy. Thus, according to Powers, supra at 623, "the construction most favorable to the policyholder will be adopted.” Alternatively phrased, this contract is ambiguous and is interpreted in favor of the insured, Patricia Wasarovich. Arco, supra at 403; Czopek, supra at 595.
Interpreting the contract in favor of the insured as a result of the ambiguity means that the shooting incident is viewed from the subjective perspective of Patricia Wasarovich. The trial court, whose decision is overturned by this Court of Appeals majority, denied Michigan Basic summary disposition, holding that the shooting was an occurrence under the insurance policy because it should be interpreted from Patricia Wasarovich’s standpoint as a result of the innocent coinsured doctrine from Morgan v Cincinnati Ins Co, 411 Mich 267, 276; 307 NW2d 53 (1981). The end result of this analysis is that the trial court’s decision should be upheld, but the rationale for it rejected. The trial court erred in applying the innocent coinsured doctrine to this case. That doctrine operates to determine whether an exclusionary clause bars one of multiple coinsureds from making a claim of insurance because of an act of fraud on the insurer. Id. at 276. Thus, it is not applicable to the interpretation of the definition for the term "occurrence” under the insurance policy. Accordingly, the trial court’s denial of Michigan Basic’s summary disposition motion should be upheld because contract ambiguity results in the shooting being defined as an occurrence under the insurance policy.
II. INTERPRETATION OF THE POLICE EXCLUSION
Given that the shooting death of August Feldt is *333an occurrence to which Michigan Basic’s duty to defend and indemnify applies, the second issue is if the "expected or intended by the insured” exclusionary clause in the policy subsequently eliminates Patricia Wasarovich’s coverage. Michigan Basic’s policy excluded coverage of personal liability and medical payments for third-party bodily injury if the bodily injury was "expected or intended by the insured.” (Emphasis added.) As above, the pertinent question is which insured’s perspective of the multiple insured’s perspectives is used to determine if the bodily injury (death) was expected or intended.
When interpreting exclusions in a policy of insurance, clear, specific exclusions are enforced, but "exclusions to the general liability . . . are to be strictly construed against the insurer.” Czopek, supra at 597. If ambiguity exists, the policy is enforced in favor of the insured. Arco, supra at 403; Czopek, supra at 595. Michigan courts have not interpreted the meaning of the phrase "the insured” in an exclusionary clause of a homeowner’s policy covering multiple coinsureds. However, the Michigan Supreme Court interpreted the phrase "the insured” in the context of the exclusionary clause for fraud in the standard fire insurance policy, MCL 500.2832; MSA 24.12832. Morgan, supra at 276. While not factually on point, the analysis is persuasive.
Morgan’s exclusionary clause read as follows: *334The insurer argued to the Morgan Court that the exclusion voided the entire policy if any insured committed fraud. Id. The Supreme Court stated: "We believe . . . ['the insured’] is to be read as having application only to the insured who committed the fraud and makes claim under the policy.” Morgan at 276.
*333"This entire policy shall be void if, whether before or after a loss, the insured has wilfully concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto.” MCL 500.2832; MSA 24.12832. [411 Mich 276. Emphasis added.]
*334Expanding this logic to the Michigan Basic clause that excludes coverage of personal liability and medical payments of others for bodily injury if the bodily injury was "expected or intended by the insured” in the case of multiple insureds, only the insured or insureds who intended or expected bodily injury and who applied for coverage would be excluded. Therefore, in the present case Patricia Wasarovich is not excluded from coverage in a summary disposition hearing because her intent or expectation with respect to August Feldt’s bodily injury is a question of fact, as was recognized by the trial court.
Alternatively, if Morgan’s analysis is not expanded into the realm of homeowner’s insurance, Patricia Wasarovich is still not excluded under this clause. The word "the” is
[a] demonstrative adjective used chiefly before a noun to individualize, specialize, or generalize its meaning, having a force thus distinguished from the indefinite distributive force of a , an, and from the abstract force of the unqualified noun. Thus, the man points to a particular man. . . Limiting a general term to the individual or class indicated by a succeeding element in the sentence. . . . [Webster’s New International Dictionary Unabridged, Second Edition.]
Black’s Law Dictionary, Revised Fourth Edition explains "the” as "an article which particularizes the subject spoken of.” Black’s goes on to say, *335"The most unlettered persons understand that 'a’ is indefinite, but 'the’ refers to a certain object. . . 'The’ house means only one house.” Thus, the plain meaning in Michigan Basic’s exclusionary clause for multiple insureds is that the clause examines the intentions or expectations of a single insured when judging exclusion from coverage. The question naturally follows in the case of multiple insureds with conflicting perspectives, which perspective is adopted from which to judge exclusion? Neither the insurance policy nor case law supplies an answer. Furthermore, in applying the exclusionary clause to the facts of this case, opposite, reasonable conclusions regarding exclusion are reached depending on whether Patricia Wasarovich’s perspective or Joseph Wasarovich’s perspective is adopted. This results in ambiguity. Ambiguity is construed in favor of the insured, Patricia Wasarovich. Czopek, supra at 595. Therefore, Ms. Wasarovich is not excluded from coverage at the summary disposition level. However, as a result of the factual question regarding whether Patricia Wasarovich expected or intended the bodily injury, the trial court erred in granting her summary disposition. This issue should be remanded to the trial court for findings of fact.