Detroit Auto. Inter-Insurance Exchange v. Higginbotham

• Decision Date: 05 February 1980
• Docket Number: Docket No. 78-1130,INTER-INSURANCE
• Citation: 95 Mich.App. 213,290 N.W.2d 414
• Parties: DETROIT AUTOMOBILEEXCHANGE, Plaintiff-Appellee, v. Boyd N. HIGGINBOTHAM, Defendant, and Ruby Higginbotham, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 414

290 N.W.2d 414

95 Mich.App. 213

DETROIT AUTOMOBILE INTER-INSURANCE EXCHANGE, Plaintiff-Appellee, v. Boyd N. HIGGINBOTHAM, Defendant and Ruby Higginbotham, Defendant-Appellant.

Docket No. 78-1130.

Court of Appeals of Michigan.

Feb. 5, 1980.

Released for Publication April 4, 1980.

Freddie G. Burton, Detroit, for defendant.

Charles A. Pfeffer, Detroit, James G. Gross, Detroit, of counsel, for plaintiff-appellee.

Before BASHARA, P. J., and J. H. GILLIS and VanVALKENBURG, ^* JJ.

J. H. GILLIS, Judge.

This is an automobile no-fault insurance action. On March 4, 1975, defendant, Boyd Higginbotham, estranged husband of defendant-appellant, Ruby Higginbotham, was driving his automobile in pursuit of his wife. She was driving her own automobile. Mr. Higginbotham drove his car into the side of his wife's car, forcing it to the curb. While Mrs. Higginbotham remained trapped in her car, her husband walked over and shot her several times with a revolver, severely wounding her. The parties had separate insurance policies on their respective automobiles issued by plaintiff, Detroit Automobile Inter-Insurance Exchange (DAIIE).

On August 4, 1975, appellant's counsel sent a letter informing plaintiff that appellant had a claim against her husband arising out of the above-mentioned incident.

On August 14, 1975, appellant instituted a lawsuit against her husband for damages caused by the collision and assault.

On September 29, 1975, appellant's attorney notified plaintiff of the lawsuit and of Mr. Higginbotham's failure to respond. On December 1, 1975, plaintiff notified Mr. Higginbotham that no coverage would be afforded him under his insurance policy. Plaintiff stated that its representative would contact him in order to have him sign a reservation of rights agreement. The intended effect of the agreement was to permit plaintiff to defend the action against Mr. Higginbotham without waiving any of its rights or defenses under the insurance contract. When later contacted, Mr. Higginbotham refused to sign the agreement.

Also, on December 1, 1975, plaintiff apprised appellant's attorney of its intention to defend the lawsuit subject to the reservation of rights. Plaintiff requested appellant's attorney to separate the damages caused by the collision from those caused by the assault. Appellant's attorney refused to do so, claiming "one injury from one assault".

On December 29, 1975, a default was entered against Mr. Higginbotham. On April 1, 1976, plaintiff appeared and moved to set aside the default and sought an order requiring plaintiff to file an appearance and answer. The order was apparently sought as an equivalent to the waiver of rights which Mr. Higginbotham had refused to execute. The motion was denied and a default judgment was entered. The lower court declined to enter the requested order.

While the above events were transpiring, plaintiff, on December 12, 1975, filed the present declaratory action. In order to protect its rights under its contract of insurance with Mr. Higginbotham, plaintiff sought a declaratory judgment that it was not liable under its policy with Mr. Higginbotham for any damage arising out of the latter's assault on the appellant. ¹

Appellant answered and filed a counterclaim alleging that plaintiff was required to pay her benefits under her insurance contract with the plaintiff. Plaintiff denied any such liability.

On July 1, 1977, appellant filed a motion for summary judgment on the complaint for declaratory judgment pursuant to GCR 1963, 117.2(3), and a second motion for summary judgment on her counterclaim, also pursuant to GCR 1963, 117.2(3). Plaintiff also filed motions for summary judgment on the complaint and counterclaim.

On January 19, 1978, the lower court held that plaintiff was not liable under either policy because appellant's injuries were intentionally inflicted by Mr. Higginbotham and because the claimed injuries did not arise out of the use of an automobile. Plaintiff's motions for summary judgment were granted and appellant's motions were denied. Orders reflecting that disposition were entered on February 24, 1978. Appellant appeals from those orders as a matter of right.

We begin by addressing appellant's contention that plaintiff was estopped from raising the issue of noncoverage in the action for declaratory judgment.

Appellant maintains that plaintiff had a duty to defend Mr. Higginbotham and, because plaintiff elected not to enter and defend the action, plaintiff is bound by the default judgment as to all matters at issue in such action, even though not a formal party, so that plaintiff could not subsequently deny liability pursuant to its claim of noncoverage. This argument is supported by reference to two theories of estoppel.

Initially, we note that appellant's argument is founded upon a factually inaccurate premise. The declaratory action was not instituted subsequent to the default judgment. On the contrary, the declaratory action was filed two weeks before Mr. Higginbotham's default was entered and approximately 3 1/2 months before judgment was entered on the default.

Even were we to assume that the declaratory action was subsequent in time to the default judgment, we, nevertheless, conclude that appellant's contention is without merit.

Appellant's argument is that plaintiff is bound by the default judgment solely as a result of its failure to defend. We disagree. Absent a request, an insurer has no duty to defend an insured. American Mutual Liability Ins. Co. v. Michigan Mutual Liability Co., 64 Mich.App. 315, 323, 235 N.W.2d 769 (1975); Eastman v. United States, 257 F.Supp. 315, 319 (S.D.Ind.1966). In the present case, Mr. Higginbotham failed to send the pleadings to the plaintiff or contact it in any way. There was no request of plaintiff to defend Mr. Higginbotham. Plaintiff's duty to defend not having arisen, its failure to defend cannot give rise to the penalty suggested by appellant.

Appellant alternatively relies on the law of collateral estoppel to support her argument that plaintiff was precluded from raising the issue of noncoverage in the declaratory action. Such reliance is misplaced. Collateral estoppel prohibits parties from relitigating those issues which have previously been decided. See Howell v. Vito's Trucking & Excavating Co., 386 Mich. 37, 42, 191 N.W.2d 313 (1971). The doctrine of collateral estoppel applies to a default judgment. Perry & Derrick Co., Inc. v. King, 24 Mich.App. 616, 180 N.W.2d 483 (1970). The default judgment, however, is conclusive only as to those matters essential to support the judgment. Perry & Derrick Co., Inc. v. King, supra, 620, 180 N.W.2d 483. Here, the original action determined only Mr. Higginbotham's liability to his wife. The issue of noncoverage under Mr. Higginbotham's policy was not raised in that action. Accordingly, it was not a matter essential to support the default judgment. Even assuming for the purpose of argument that plaintiff, by moving to set aside this default, sufficiently participated in the action to become bound by the default decree, the collateral estoppel effect thereof did not extend to the issue of noncoverage under Mr. Higginbotham's policy.

We note that appellant does not claim that plaintiff was or is precluded from raising the issue of noncoverage under her policy.

The question presented is whether the lower court erred in granting summary judgment to plaintiff on the issues of liability under the respective policies.

The first reason cited by the lower court in support of its grants of summary judgment was that the injuries were intentionally inflicted by Mr. Higginbotham. This proffered reason will not support the lower court's decision.

The fact that the defendant intended to assault the appellant will not preclude her from recovering personal protection insurance benefits under her policy. M.C.L. § 500.3105; M.S.A. § 24.13105 provides:

"(1) Under personal protection insurance an insurer is liable to pay benefits for accidental bodily injury * * *.

"(4) Bodily injury is accidental as to a person claiming personal protection insurance benefits unless suffered intentionally by the injured person or caused intentionally by the claimant."

The parties do not dispute that appellant neither intentionally suffered nor caused her injuries. Accordingly, we conclude that with respect to appellant's claim for personal protection insurance benefits, her injuries were accidental. See State Farm Mutual Automobile Ins. Co. v. Coon, 46 Mich.App. 503, 506, 208 N.W.2d 532 (1973), O'Key v. State Farm Mutual Automobile Ins. Co., 89 Mich.App. 526, 280 N.W.2d 583 (1979). The...