Cincinnati Ins. Co. v. Hall

• Decision Date: 20 June 2013
• Docket Number: No. 308002,308002
• Parties: CINCINNATI INSURANCE COMPANY, Plaintiff-Appellant, v. MYRON HALL, as guardian of KELLY FOSTER HALL, SOCIAL RESOURCES, INC., and MICHAEL W. DAVIS, Defendants-Appellees, and MACOMB COUNTY COMMUNITY MENTAL HEALTH, Defendant.
• Court: Court of Appeal of Michigan — District of US

CINCINNATI INSURANCE COMPANY, Plaintiff-Appellant,

v. MYRON HALL, as guardian of KELLY FOSTERHALL, SOCIAL RESOURCES, INC., andMICHAEL W. DAVIS, Defendants-Appellees,andMACOMB COUNTY COMMUNITY MENTAL HEALTH, Defendant.

No. 308002

STATE OF MICHIGAN COURT OF APPEALS

June 20, 2013

UNPUBLISHED

Macomb Circuit Court

LC No. 09-001032-CZ

Before: JANSEN, P.J., and FITZGERALD and K. F. KELLY, JJ.

FITZGERALD, J. (dissenting.)

I respectfully dissent from the majority's conclusion that the trial court erred in finding that the policy of insurance was illusory. I would affirm.

In the prior appeal,¹ this Court addressed whether the "abuse or molestation" exclusion in the insurance policy operated to exclude coverage for the claim made on behalf of Kelly Foster Hall (Kelly). This Court, noting that the insurance policy did not define the terms "abuse" or "molestation," applied the dictionary definitions of the terms and concluded that "Egbuche's actions toward Hall could be considered "treatment in an injurious way," constituting "abuse;" and "bothering, interfering with, or annoying," constituting "molestation." This Court rejected the trial court's conclusion that the exclusion only applied to claims of sexual abuse or molestation. This Court stated:

Although these [foreign] jurisdictions all interpreted "abuse or molestation" as including unwanted or inappropriate sexual behavior, none of them held that sexual behavior was required. These cases merely dealt with allegations that were of a sexual nature and found those allegations to fall within the range of possible actions that would constitute "abuse or molestation." Further, these cases explained that words are not ambiguous simply because they might have several possible definitions, the Supreme Court of Connecticut explicitly stating that "[w]hatever other conduct that broad language may include within its purview, it certainly includes unwanted contact of a sexual nature." Community Action, 254 Conn at 401. Again, there is no reason why "abuse" or "molestation" must be sexual in nature. The actions alleged in the instant case clearly fall into the definitions of "abuse" and "molestation." Therefore, the policy excluded from its coverage the conduct alleged in Hall's complaint, and the defendant [Cincinnati] had no duty to defend the plaintiff [SRI].

As Community Action explained, unwanted sexual contact might be what "abuse or molestation" is most commonly used to describe. However, the plain meanings of the words encompass a broader range of possible actions and behaviors, and we find no authority requiring their use in an insurance policy to be artificially restricted to only sexual acts or behaviors.

Despite this conclusion, this Court went on to state:

We are nonetheless troubled by this outcome, because this plain reading of the "abuse or molestation" exclusion seems to suggest that the policy may well exclude everything. We agree with Hall's general assertion that insurance policies must insure against something. It defies all sense to conclude that an insured would pay for an insurance policy that turns out to be an empty work of fiction, and indeed, such a policy might even be considered fraudulent. If the literal application of the plain meaning of the "abuse or molestation" exclusion operates to totally eviscerate the policy, then the policy must be ambiguous, and the trial court may then engage in interpreting it to address that ambiguity. However, that evaluation should be undertaken by the trial court.

On remand, the trial court was instructed to evaluate whether the exclusion for "abuse or molestation" was ambiguous and whether that exclusion was so broad that it would operate to exclude any potential claim, thereby rendering the entire policy illusory. Following a hearing on remand, the trial court granted summary disposition in favor of defendant Social Resources, Inc. (SRI). The court concluded that the abuse or molestation exclusion was "too broad . . . too vague" and that the exclusion "could be construed in such a fashion as to exclude virtually any activity." The Court stated, "I'm satisfied that the term is, as written, at least ambiguous but at the most would be illusory as a result of the - - the contract would [be] illusory as a result of it, and I'm going to let you take it back to the Court of Appeals and let them give you their final analysis."

This Court reviews de novo a trial court's decision on a motion for summary disposition. Copus v MEEMIC Ins Co, 291 Mich App 593, 596; 805 NW2d 623 (2011). A motion underMCR 2.116(C)(10) tests the factual support for a claim based on substantively admissible evidence. MCR 2.116(G)(6); Healing Place at North Oakland Med Ctr v Allstate Ins Co, 277 Mich App 51, 55-56; 744 NW2d 174 (2007). In reviewing the motion, a court considers the pleadings, depositions, affidavits, admissions, and other documentary evidence then filed in the action or submitted by the parties. MCR 2.116(G)(5); Healing Place at North Oakland Med Ctr, 277 Mich App at 56. A court should grant the motion if the evidence, viewed in a light most favorable to the nonmoving party, fails to establish a genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Allison v AEW Capital Mgt, LLP, 481 Mich 419, 424-425; 751 NW2d 8 (2008).

The construction and interpretation of an insurance contract is also a question of law that this Court reviews de novo. Citizens Ins Co v Pro-Seal Serv Group, Inc, 477 Mich 75, 80; 730 NW2d 682 (2007); Henderson v State Farm Fire & Cas Co, 460 Mich 348, 353; 596 NW2d 190 (1999). Summary disposition under MCR 2.116(C)(10) is appropriate in a case involving a contract dispute where the terms of the insurance policy are unambiguous. Henderson, 460 Mich at 353.

In the prior appeal, this Court, after examining the dictionary definitions of the undefined terms "abuse" and "molestation" determined that the actions alleged in the instant case clearly fall within the plain meaning of the exclusion for "abuse" and "molestation." Thus, this Court determined that the exclusion was not ambiguous and that Cincinnati did not have a duty to defend and indemnify in this case. Consequently, the appropriate question on remand was whether the policy is illusory in light of this Court's interpretation of the definition of "abuse or molestation." This Court stated with regard to the definition of "abuse" and "molestation":

Both "abuse" and "molestation" have multiple possible definitions that include, but are not limited to, those which involve a sexual connotation. The Random House Webster's College Dictionary defines the verb "abuse" as "to use wrongly or improperly," "to treat in a harmful or injurious way," "to speak insultingly or harshly about," and "to commit sexual assault on." Random House Webster's College Dictionary (2001). This demonstrates that abuse need not be "sexual." The same dictionary defines "molest" as "to bother, interfere with, or annoy," "to make indecent sexual advances to," and "to assault sexually." Id. This likewise demonstrates that molestation need not be sexual. Therefore, according to dictionary definitions of the terms[,] Egbuche's actions toward [Kelly] could be considered "treatment in an injurious way," constituting "abuse;" and "bothering, interfering with, or annoying," constituting "molestation."

The commercial general liability insurance policy in this case provided coverage for "those sums that the insured becomes legally...