Auto-Owners Ins. Co. v. Harvey

• Citation: 556 N.W.2d 517,219 Mich.App. 466
• Decision Date: 15 October 1996
• Docket Number: Docket No. 180869,AUTO-OWNERS
• Parties: INSURANCE COMPANY, a Michigan Corporation, Plaintiff-Appellant, v. The Estate of James HARVEY Jr., Deceased, by Timothy Harvey, Personal Representative, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 517

556 N.W.2d 517

219 Mich.App. 466

AUTO-OWNERS INSURANCE COMPANY, a Michigan Corporation Plaintiff-Appellant, v. The Estate of James HARVEY Jr., Deceased, by Timothy Harvey Personal Representative, Defendant-Appellee.

Docket No. 180869.

Court of Appeals of Michigan.

Submitted June 5, 1996, at Detroit.

Decided Oct. 15, 1996, at 9:10 a.m.

Released for Publication Dec. 23, 1996.

Garan, Lucow, Miller, Seward, Cooper & Becker, P.C. by James L. Borin and Mark C. Smiley, Detroit, for plaintiff-appellant.

Thurswell, Chayet & Weiner by Tammy J. Reiss, Southfield, for defendant-appellee.

Before MARK J. CAVANAGH, P.J., and HOOD and J.J. McDONALD, ^* JJ.

PER CURIAM.

Plaintiff, Auto-Owners Insurance Company, appeals as of right from the trial court order granting declaratory judgment in favor of defendant. On appeal, plaintiff argues that the trial court clearly erred in granting declaratory judgment for defendant because the decedent, James Harvey, Jr., was not an "insured" entitled to uninsured motorist benefits. We reverse and remand for an evidentiary hearing.

The decedent was an equal partner with Ezra, Arthur, and Timothy Harvey in Eastern Equipment Company. On July 16, 1990, Ezra Harvey, Arthur Harvey, and the decedent were in the process of loading a car onto a trailer that was attached to a truck. The trailer and truck were insured by plaintiff. The decedent was standing in the roadway, attempting to chain the car to the trailer when, he was struck by an uninsured motorist and sustained severe injuries that ultimately proved fatal.

Defendant Timothy Harvey, as personal representative of the decedent's estate, filed an action in the Wayne Circuit Court seeking no-fault benefits from plaintiff. At that time, plaintiff raised the defense that the decedent was not an occupant of the insured vehicle. Defendant responded by adding Auto Club Insurance Association (ACIA), the decedent's individual insurer, to that cause of action. Subsequently, ACIA accepted priority and paid benefits to defendant. Plaintiff was dismissed without prejudice on stipulation of defendant and ACIA.

Defendant then filed a claim with plaintiff for uninsured motorist coverage. Plaintiff responded by bringing a declaratory action in the Wayne Circuit Court seeking a determination regarding the parties' rights and responsibilities pursuant to the insurance policy. In January 1994, the parties filed motions for summary disposition. On October 12, 1994, the trial court entered orders granting defendant's motion and denying plaintiff's motion. On November 21, 1994, the trial court entered an order of declaratory judgment stating that defendant was "entitled to uninsured motorist benefits under Auto Owners Insurance policy."

On November 30, 1994, plaintiff filed a claim of appeal from the declaratory judgment. Plaintiff subsequently filed a motion to remand for an evidentiary hearing pursuant to MCR 7.211(C)(1) on the basis of this court's decision in Rohlman v. Hawkeye-Security Ins. Co. (On Remand), 207 Mich.App. 344, 526 N.W.2d 183 (1994) (Rohlman II ). This Court denied the motion on March 9, 1995.

Plaintiff contends that the trial court erred in finding that the decedent was entitled to uninsured motorist coverage under its policy. This Court's review of a declaratory judgment is de novo. The trial court's factual findings, however, will not be reversed unless they are clearly erroneous. Michigan Residential Care Ass'n v. Dep't of Social Services, 207 Mich.App. 373, 375, 526 N.W.2d 9 (1994).

It is a well-recognized principle in Michigan law that an insurance policy must be enforced in accordance with its terms. Michigan Millers Mutual Ins. Co. v. Bronson Plating Co., 445 Mich. 558, 567, 519 N.W.2d 864 (1994). Where the language of an insurance policy is clear and unambiguous, it must be enforced as written. Group Ins. Co. of Michigan v. Czopek, 440 Mich. 590, 596-597, 489 N.W.2d 444 (1992). If, however, a provision in an insurance policy is ambiguous, the ambiguity must be construed against the insurer and in favor of the insured. Taylor v. Blue Cross & Blue Shield of Michigan, 205 Mich.App. 644, 649, 517 N.W.2d 864 (1994). Courts must be careful not to read an ambiguity into a policy where none exists. Michigan Millers, supra.

Because uninsured motorist benefits are not statutorily required, the language of the individual's insurance policy dictates under what conditions uninsured motorist benefits will be provided. Rohlman v. Hawkeye-Security Ins. Co., 442 Mich. 520, 525, 502 N.W.2d 310 (1993) (Rohlman I ). As applied to uninsured motorist coverage, plaintiff's policy defines "insured" as:

(a) the first named insured if an individual and not a corporation, firm or partnership,

* * * * * *

(b) any person while in, upon, entering or alighting from an automobile to which Coverage A of this policy applies.

The trial court held that the decedent was both a "first named insured" under the policy and that the decedent was entitled to coverage as an occupant of the vehicle.

Plaintiff first argues that the decedent was not the "first named insured." The policy under which defendant claims uninsured motorist benefits was issued under the name "Ezra Harvey, d/b/a Eastern Equipment Company." Defendant contends that the insurance policy is the property of the partnership and that each of the individual partners are insured. However, defendant's argument fails to recognize that although the policy and the truck and trailer combination it insures are the property of the partnership, whether the policy entitles any of the individual partners to benefits is determined by the terms of the policy. Rohlman I, supra. The language of the insurance policy unambiguously states that an entity is the first named insured "if an individual and not a corporation, firm, or partnership." Under Michigan law, the term "individual" is recognized as designating a natural person and not including business entities such as corporations. Sentry Security Systems, Inc. v. DAIIE, 394 Mich. 96, 97, 228 N.W.2d 779 (1975). Moreover, the language of the policy in question expressly excludes corporations, firms, and partnerships from its definition of "first named insured." Thus, James Harvey, Jr., was not a "first named insured" by virtue of being an individual partner in Eastern Equipment Company, and the trial court erred in so finding.

Plaintiff also contends that Harvey does not qualify as an "insured" by virtue of being "in, upon, entering or alighting from" a covered vehicle at the time of the accident. At the outset, we find that the trial court erred in determining that the decedent was entitled to coverage as an "occupant" of the vehicle. The policy specifically states that an insured includes "any person while in, upon, entering or alighting from" a covered vehicle. As with any other contract, a court must construe an insurance contract from the language actually used in the contract. The parties have the right to employ whatever terms they wish, and the courts should not rewrite them as long as the terms do not conflict with pertinent statutes or public policy. See Auto-Owners Ins. Co. v. Churchman, 440 Mich. 560, 566-567, 489 N.W.2d 431 (1992).

Defendant relies on the Supreme Court's decision in Nickerson v. Citizens Mutual Ins. Co., 393 Mich. 324, 224 N.W.2d 896 (1975), in support of his contention that although the decedent was outside the insured vehicle at the time of the accident, he was still "in upon, entering or alighting from" the vehicle. In Nickerson, the car in which the plaintiff was riding stalled. The plaintiff got out and pushed the vehicle to the side of the road. While walking toward the front of the vehicle, the plaintiff was struck from behind by a car driven by an uninsured motorist. Id. at 326, 224 N.W.2d 896. The Supreme Court concluded that the plaintiff was "occupying" the vehicle as defined by the policy and was entitled to benefits. In reaching this decision, the Court concluded that physical contact with the vehicle was not required and that the plaintiff was entitled to benefits on the basis of "his immediate prior 'occupying' of the insured vehicle." Id. at 331, 224 N.W.2d 896.

The insurance policy in Nickerson, however, was issued before the adoption of the no-fault act, M.C.L. § 500.3101 et seq.; M.S.A. § 24.13101 et seq. The Supreme Court has acknowledged that, as a matter of public policy, it had adopted a broad construction of the policy language in Nickerson for the purpose of finding coverage. See Royal Globe Ins. Cos. v. Frankenmuth Mutual Ins. Co., 419 Mich. 565, 574, 357 N.W.2d 652 (1984). However, the repeal of the uninsured motorist statute and the passage of the no-fault act largely eliminated the factors motivating the Nickerson decision. Rohlman I, supra at 529, 502 N.W.2d 310.

After considering the Supreme Court's opinions in Royal Globe and Rohlman I, this Court has concluded that courts should not be bound by the Nickerson rationale when interpreting an insurance contract providing uninsured motorist benefits, which are not required by the no-fault act. Rohlman II, supra at 357, 526 N.W.2d 183. In Rohlman II, the policy in question...