Citizens Ins. Co. v. Secura Ins.
| Decision Date | 15 May 2008 |
| Docket Number | Docket No. 274751. |
| Citation | 279 Mich. App. 69,755 N.W.2d 563 |
| Court | Court of Appeal of Michigan — District of US |
| Parties | CITIZENS INSURANCE COMPANY, Plaintiff-Appellee, v. SECURA INSURANCE and Geraldine Irvine, Defendants-Appellants, and Andrew Gillespie, Kasey Gillespie, Barbara Lynn Salt, Personal Representative of the Estate of Alysha Lynn Salt, Deceased, Stephen Ancona, Joseph Bolanowski, Personal Representative of the Estate of Robert Bolanowski, Deceased, and Terrance Hall, Defendants. |
Mellon, McCarthy & Pries, P.C. (by Daniel J. McCarthy and Brian R. Harris), Troy, for Citizens Insurance Company.
Garan Lucow Miller, P.C. (by Megan K. Cavanagh), Detroit, for Secura Insurance and Geraldine Irvine.
Before: ZAHRA, P.J., and WHITE and O'CONNELL, JJ.
In this action for a declaratory judgment arising out of a fatal automobile accident, defendants Secura Insurance and Geraldine Irvine, Secura's insured, appeal as of right from the trial court's order granting plaintiff Citizens Insurance Company's motion for summary disposition under MCR 2.116(C)(10). The trial court determined that Secura owed defendant Andrew Gillespie, Citizens' insured, a duty to defend and indemnify in regard to underlying actions filed against Gillespie. Pursuant to the Secura insurance policy, Gillespie would be insured if he operated the vehicle he was driving with the express or implied consent of Irvine, the vehicle's owner. Whether Irvine consented to Gillespie's use of her vehicle is a disputed issue that must be resolved by the fact-finder. As more fully explained in this opinion, we conclude that Secura had a duty to defend Gillespie. We further conclude that the question of Secura's duty to indemnify turns on the fact-finder's determination whether Gillespie operated the vehicle with the express or implied consent of Irvine. We affirm the order as it relates to Secura's duty to defend Gillespie. We reverse the order, in part, as it relates to Secura's duty to indemnify Gillespie.
On August 23, 2004, Gillespie was operating a 1998 Toyota Camry belonging to his mother, Geraldine Irvine, while allegedly under the influence of medication and alcohol. Gillespie caused a car accident that resulted in the deaths of Alysha Lynn Salt and Robert Bolanowski and caused critical injuries to Stephen Ancona and Terrance Hall.
Ancona, Hall, and the personal representatives of the estates of Salt and Bolanowski filed lawsuits against Gillespie (the underlying lawsuits), alleging that he negligently operated Irvine's vehicle at the time of the accident. The plaintiffs in the underlying suits also alleged that Gillespie operated Irvine's vehicle with her consent and, accordingly, that Irvine is liable under MCL 257.401 (the owner-liability statute). Irvine, who was insured by Secura at the time of the accident, filed a motion for summary disposition under MCR 2.116(C)(10), arguing that there was no genuine issue of material fact that Gillespie did not have her consent to operate her vehicle at the time of the accident. The trial court denied this motion, holding that a genuine issue of material fact remained regarding whether Gillespie was operating Irvine's vehicle with her consent.
Citizens insured Gillespie at the time of the accident. Citizens contacted Secura by letter informing it that Secura had a duty to defend Gillespie in the underlying lawsuits. Secura refused to defend Gillespie. Citizens then filed the present action, seeking a determination that Secura owed Gillespie a duty to defend and indemnify in the underlying lawsuits. The trial court granted Citizens' motion for summary disposition and ordered Secura to defend and indemnify Gillespie in the underlying lawsuits.
We review a trial court's ruling on a motion for summary disposition de novo. Maskery v. Univ. of Michigan Bd. of Regents, 468 Mich. 609, 613, 664 N.W.2d 165 (2003). The interpretation and construction of insurance contracts are also questions of law, which this Court reviews de novo. Shefman v. Auto-Owners Ins. Co., 262 Mich.App. 631, 636, 687 N.W.2d 300 (2004).
Gillespie obtained from Citizens an insurance policy that covered two vehicles that he owned. This policy provided, in part, that Citizens would "pay damages for `bodily injury' or `property damage' for which any `insured' becomes legally responsible because of an `auto accident'[,]" and that Citizens will "settle or defend . . . any claim or suit asking for these damages." The "other insurance" clause of the policy declared that the coverage provided by Citizens for a vehicle not owned by Gillespie "shall be excess over any other collectable insurance." Here, Gillespie was driving a vehicle he did not own. By the plain terms of the Citizens insurance policy, any coverage under that policy is excess to other coverage that is afforded Gillespie.
Although a copy of Irvine's policy with Secura is not included in the lower-court record, Secura acknowledges that MCL 257.520(b)(2) provides that properly certified policies of liability insurance shall
insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicle or motor vehicles within the United States of America or the Dominion of Canada. [Emphasis added.]
Therefore, we assume, as did the trial court, that the Secura policy complies with this statute and provides coverage in a situation where an individual is operating the vehicle in question with the permission of the insured.
Secura acknowledges that if Irvine consented to Gillespie's use of her vehicle, Gillespie would be an insured under its policy. Nonetheless, Secura argues that the trial court prematurely granted Citizens' motion for summary disposition because the question whether Gillespie was an insured under Secura's policy could not be determined until a jury determines that Gillespie was in fact operating Irvine's vehicle with her consent at the time of the accident. We disagree.
MCL 257.401(1) creates a rebuttable presumption that a vehicle "is being driven with the knowledge and consent of the owner if it is driven at the time of the injury by his or her spouse, father, mother, brother, sister, son, daughter, or other immediate member of the family." Pursuant to this statutory provision, we start our analysis with the presumption that Gillespie, who was driving Irvine's vehicle at the time of the injury and who is the son of Irvine, had the consent of Irvine to drive her vehicle and thus Gillespie is an insured under the Secura policy. We recognize this statutory presumption is rebuttable. We nonetheless conclude that the presumption, taken together with the plaintiffs' allegations in the underlying suits, are significant and sufficient to support the conclusion that Secura has a duty to defend Gillespie in the underlying suits.
An insurance company has a duty to defend its insured "if the allegations of the underlying suit arguably fall within the coverage of the policy...." Royce v. Citizens Ins. Co., 219 Mich.App. 537, 543, 557 N.W.2d 144 (1996). An insurer's duty to defend is broader than its duty to indemnify. Busch v. Holmes, 256 Mich.App. 4, 9, 662 N.W.2d 64 (2003). The duty to defend arises from the language of the insurance contract. Michigan Ed. Employees Mut. Ins. Co. v. Turow, 242 Mich.App. 112, 117, 617 N.W.2d 725 (2000). In determining whether there is a duty to defend, courts are guided by established principles of contract construction. McKusick v. Travelers Indemnity Co., 246 Mich.App. 329, 332, 632 N.W.2d 525 (2001).
The duty of the insurer to defend the insured depends upon the allegations in the complaint of the third party in his or her action against the insured. This duty is not limited to meritorious suits and may even extend to actions which are groundless, false, or fraudulent, so long as the allegations against the insured even arguably come within the policy coverage. An insurer has a duty to defend, despite theories of liability asserted against any insured which are not covered under the policy, if there are any theories of recovery that fall within the policy. The duty to defend cannot be limited by the precise language of the pleadings. The insurer has the duty to look behind the third party's allegations to analyze whether coverage is possible. In a case of doubt as to whether or not the complaint against the insured alleges a liability of the insurer under the policy, the doubt must be resolved in the insured's favor. [Detroit Edison Co. v. Michigan Mut. Ins. Co., 102 Mich.App. 136, 141-142, 301 N.W.2d 832 (1981) (emphasis in original; citations omitted).]
See also Protective Nat'l Ins. Co. of Omaha v. Woodhaven, 438 Mich. 154, 159, 476 N.W.2d 374 (1991).
Here, the underlying complaints allege that Gillespie had the permission of Irvine to operate the vehicle. This is a theory of liability that the Secura policy arguably covers. In Polkow v. Citizens Ins. Co. of America, 438 Mich. 174, 180, 476 N.W.2d 382 (1991), a case concerning an insurance company's duty to defend in a pollution suit, our Supreme Court stated:
Fairness requires that there be a duty to defend at least until there is sufficient factual development to...
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