Admiral Ins. Co. v. Columbia Cas. Ins. Co.

• Decision Date: 18 May 1992
• Docket Number: 117645 and 117646,117432,114114,Docket Nos. 111087
• Citation: 194 Mich.App. 300,486 N.W.2d 351
• Parties: ADMIRAL INSURANCE COMPANY, Plaintiff-Appellant-Cross-Appellee, v. COLUMBIA CASUALTY INSURANCE COMPANY, Robert J. Perrin, and Mary F. Brewer, Personal Representative of the Estate of Gary Gene Catron, Deceased, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 351

486 N.W.2d 351

194 Mich.App. 300

ADMIRAL INSURANCE COMPANY, Plaintiff-Appellant-Cross-Appellee, v. COLUMBIA CASUALTY INSURANCE COMPANY, Robert J. Perrin, and Mary F. Brewer, Personal Representative of the Estate of Gary Gene Catron, Deceased Defendants-Appellees.

Docket Nos. 111087, 114114, 117432, 117645 and 117646.

Court of Appeals of Michigan.

Submitted Oct. 3, 1991, at Detroit.

Decided May 18, 1992, at 9:25 a.m.

Released for Publication Aug. 3, 1992.

Rutledge, Manion, Rabaut, Terry & Thomas, P.C. by Alvin A. Rutledge, Detroit, for the Admiral Ins. Co.

Vandeveer Garzia by Robert D. Brignall, Detroit, for Columbia Cas. Ins. Co.

Julie H. Hurwitz, P.C. by Julie H. Hurwitz, and Steven T. Budaj, P.C. by Steven T. Budaj, Detroit, for Mary F. Brewer.

Plunkett & Cooney, P.C. by John P. Jacobs, Joseph V. Walker, and Patrick M. Barrett, Detroit, for Frank W. Brochert.

Before SHEPHERD, P.J., and HOLBROOK and CONNOR, JJ.

HOLBROOK, Judge.

Admiral Insurance Company appeals as of right from several orders entered in the Wayne Circuit Court in these consolidated cases involving garnishment and tort claims. We vacate the order awarding attorney fees, but affirm the remaining orders.

The underlying action that ultimately led to these appeals was brought by Mary Brewer against Southgate Police Chief Robert Perrin, several police officers, and the City of Southgate for the wrongful death of her son Gary Catron. ¹ At the time of that suit, Southgate's primary insurer was Admiral. The city also had an excess policy issued by defendant Columbia Casualty Insurance Company. Admiral notified the city that it would not defend Perrin because it contended that the policy did not cover city employees. Columbia agreed to defend and indemnify the individual officers, including Perrin. Columbia retained defendant Frank Brochert to defend Perrin.

Ultimately, Brewer's claims against Perrin were concluded by entry of a consent judgment for $195,000. Brewer and Perrin also entered into an agreement whereby Perrin assigned to Brewer his rights to any claims against Admiral arising from its policy insuring Southgate, and Brewer agreed not to enforce the consent judgment against Perrin or the city.

Admiral then filed a complaint in federal district court against Columbia, Brewer, Brochert, and Perrin, seeking a declaration that it was not liable to defend or indemnify Perrin under its policy issued to Southgate. Admiral claimed that Columbia and Brochert acted in bad faith, and alleged conflict of interest, tortious interference with contract, and conspiracy. Admiral also alleged that the settlement between Brewer and Perrin was the result of collusion and conspiracy between Brochert and Columbia to ensure that the settlement would be enforced solely against Admiral and not Columbia.

Sixteen days after Admiral filed its complaint, Brewer filed a writ of garnishment against Admiral based on Perrin's claim of indemnification. Admiral's action was transferred to state court, and the two cases were consolidated.

In Brewer's garnishment action against Admiral, the trial court granted Brewer's motion for summary disposition, following Admiral's denial of liability.

The trial court granted Brochert's motion for summary disposition, dismissing Admiral's claims against him. Brochert then filed a motion against Admiral for attorney fees. The trial court held that it had jurisdiction over the issue, despite Admiral's filing of a claim of appeal. The court found that Admiral's action against Brochert was not frivolous from the outset, but that it lacked merit and should not have been maintained once discovery revealed that the claims against Brochert were factually unsupported. Pursuant to MCR 2.114 and M.C.L. § 600.2591; M.S.A. § 27A.2591, the court awarded Brochert attorney fees totaling $3,640.

The trial court entered an order granting Columbia's motion for summary disposition of Admiral's claims against it and denying Admiral's cross-motion for summary disposition against Columbia. The trial court found no factual or legal basis for Admiral's tortious interference claim or for its claims for contribution from Columbia.

The trial court dismissed without prejudice Admiral's claims against Perrin. Admiral does not appeal this order.

I

On appeal, Admiral raises four issues concerning the summary disposition in favor of Brewer's writ of garnishment. We consider these issues not preserved for appeal because Admiral failed to provide this Court with a settled statement of facts to substitute for the lost reporter's notes of the June 21, 1988, hearing at which the trial court made its ruling on the motion. MCR 7.210(B)(2); Holtzlander v. Brownell, 182 Mich.App. 716, 722-723, 453 N.W.2d 295 (1990); Nye v. Gable, Nelson & Murphy, 169 Mich.App. 411, 417, 425 N.W.2d 797 (1988). It is the appellant's obligation to secure the complete transcript of all proceedings in the lower court unless production of the full transcript is excused by order of the trial court or by stipulation of the parties. Nye, supra, p. 414, 425 N.W.2d 797; Myers v. Jarnac, 189 Mich.App. 436, 444, 474 N.W.2d 302 (1991). This Court limits its review to the record provided on appeal and will not consider any alleged evidence or testimony that is not supported by the record presented to the Court for review. Fetz Engineering Co. v. Ecco Systems, Inc., 188 Mich.App. 362, 376, 471 N.W.2d 85 (1991).

MCR 7.210(B)(2) sets forth the procedures to settle a record where the lower court proceedings were transcribed but the parties are unable to obtain a copy from the reporter. There is no indication that Admiral either complied with these provisions or was excused from producing the transcript. Nevertheless, we consider review of the four issues appropriate given their legal, rather than factual, nature. Brewer does not contend that Admiral's failure to procure the transcript precludes review of the issues. Moreover, our analysis of the issues does not entail review of any alleged evidence or testimony, but is limited to questions of law. ²

A

Admiral first argues that Perrin was not an "executive officer" of Southgate and thus was not covered by the insurance policy. Brewer asserts in her writ of garnishment that Perrin was covered by Admiral's policy. If Perrin was an executive officer, then Admiral's refusal to defend him binds it to pay any reasonable settlement made between Perrin and Brewer. Alyas v. Gillard, 180 Mich.App. 154, 160, 446 N.W.2d 610 (1989); Detroit Edison Co v. Michigan Mutual Ins Co, 102 Mich.App. 136, 144, 301 N.W.2d 832 (1980).

The pertinent provision of the policy states:

II. PERSONS INSURED

Each of the following is an insured under this insurance to the extent set forth below

* * * * * *

(c) if the Named Insured is designated in the declarations as other than an individual, partnership or joint venture, the organization so designated and any executive officer, director or stockholder thereof while acting within the scope of his duties as such....

Whether a police chief is an executive officer for insurance liability purposes is an issue of first impression in this Court. Other jurisdictions have taken diverse routes to resolve the issue. One approach defines executive officers by analogy to cases construing that term in a private corporation context. See Holm v. Mutual Service Casualty Ins. Co., 261 N.W.2d 598 (Minn., 1977); Pullen v. Cincinnati Ins. Co., Inc., 400 So.2d 393 (Ala., 1981). Another approach defines that term by reference to a governmental structure, while finding that coverage was intended to members of the executive branch of government. See Ohio Casualty Group of Ins. Cos. v. Gray, 746 F.2d 381, 385-386 (C.A.7, 1984). We are convinced that the best approach is that taken in Holm and Pullen.

The insurance policy provision at issue in both Holm and Pullen is identical to the provision in the case at bar. In Holm, supra, 261 N.W.2d at p. 601, the Minnesota Supreme Court concluded that an acting police officer was not an executive officer under the policy, but determined that executive officers were

those persons whose position, power, and duties are established in the municipal charter and who are responsible for high-level governmental policymaking. Although somewhat broadly drawn, this definition would generally include a city's mayor or manager, councilmen, administrative board members, and department heads, while excluding employees whose duties are largely ministerial.

Likewise, in Pullen, supra, 400 So.2d at pp. 398-401, executive officers included managerial positions and de facto department heads.

In this case, the Southgate city code defines the chief of police as the department head of the department of police, with responsibility for directing the work of the police force. The record indicates that Perrin was a policy maker with managerial responsibility for the police force. We are persuaded that Perrin was an executive officer for purposes of the insurance policy even though he performed his duties as police chief under the supervision of the public safety commission. Pullen, supra.

Admiral analogizes to governmental immunity law and maintains that the distinction between discretionary and ministerial duties should define whether a government employee is an executive officer. Governmental immunity for tort liability of executive officers is limited to the highest executive officials. Ross v. Consumers Power Co. (On Rehearing), 420 Mich. 567, 592, 363 N.W.2d 641 (1984). However, a finding that Perrin was not the highest executive officer responsible for police affairs for purposes of tort immunity does not preclude a finding that he was an executive officer for purposes of insurance coverage. We conclude that the trial court did not err in finding that Perrin, as chief of police, was an executive officer under the insurance provision.

B

Admiral's next issue in the garnishment case is whether it was...