Hagerl v. Auto Club Group Ins. Co.

• Decision Date: 29 May 1987
• Docket Number: Docket No. 87245
• Citation: 157 Mich.App. 684,403 N.W.2d 197
• Parties: Virginia L. HAGERL, Plaintiff-Appellee, v. AUTO CLUB GROUP INSURANCE COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 197

403 N.W.2d 197

157 Mich.App. 684

Virginia L. HAGERL, Plaintiff-Appellee, v. AUTO CLUB GROUP INSURANCE COMPANY, Defendant-Appellant.

Docket No. 87245.

Court of Appeals of Michigan.

Submitted July 9, 1986.

Decided Feb. 17, 1987.

Released for Publication April 16, 1987.

Leave to Appeal Denied May 29, 1987.

O'Farrell, Basner, Smith & Popielarz by Thomas C. Basner, Saginaw, for plaintiff-appellee.

Gromek, Bendure & Thomas by John A. Lydick, Detroit, for defendant-appellant.

Before CYNAR, P.J., and T.M. BURNS and KOBZA, ^* JJ.

PER CURIAM.

Defendant insurance company appeals as of right from a circuit court order denying summary judgment in favor of defendant and a circuit court order granting summary judgment in favor of plaintiff pursuant to GCR 1963, 117.2(3) on the ground that there was no genuine issue of material fact and plaintiff was entitled to judgment as a matter of law. We affirm.

On April 1, 1983, plaintiff was involved in an automobile accident which damaged her automobile and a municipal street light pole. The total amount of damages was approximately $3,740. Plaintiff requested that defendant provide her with benefits for the loss, but defendant declined. Plaintiff then filed the present action seeking to establish that defendant must pay the claimed benefits.

Defendant asserted that it was not responsible for payment of benefits because its contract of insurance with plaintiff had expired before the accident took place. Defendant admitted that it had a contract of insurance with plaintiff which provided coverage through March 2, 1983. However, defendant contended that undisputed facts indicated that plaintiff failed to renew her policy and that her coverage automatically expired on March 3, 1983. On the other hand, plaintiff contended that undisputed facts indicated that the parties had a valid contract of insurance which was in effect at the time of her accident. The trial court agreed with plaintiff. We also agree.

Summary judgment pursuant to GCR 1963, 117.2(3), now MCR 2.116(C)(10), is proper only if there is no genuine issue as to any material fact and the party in whose favor judgment is granted is entitled to judgment as a matter of law. A motion based on GCR 1963, 117.2(3) is designed to test the factual support for a claim. Maccabees Mutual Life Ins Co v. Dep't of Treasury, 122 Mich.App. 660, 663, 332 N.W.2d 561 (1983), lv. den. 417 Mich. 1100.15 (1983). The court must consider the pleadings, affidavits, and other available evidence and be satisfied that the claim or position asserted cannot be supported by evidence at trial because of some deficiency which cannot be overcome. Id. The court must give the benefit of any reasonable doubt to the party opposing the motion and inferences are to be drawn in favor of that party. Id.

Undisputed facts in this case indicate that plaintiff is entitled to summary judgment. It is undisputed that a valid insurance contract provided coverage before March 3, 1983. That contract provided that the policy could be cancelled by either the plaintiff or the defendant upon appropriate notice. There is no dispute that the policy was not cancelled before its expiration date.

The contract also indicated that renewal of the policy was a possibility. It contained a provision which laid out the method by which either party could forego renewal. It indicated that the insurance company could refuse to renew the policy as follows:

"We may decline to renew this policy. If we do, we will mail notice of renewal to the Principal Named Insured at the address last known to us at least 30 days before the end of the policy term."

However, it is undisputed that the insurance company did not decline to renew the policy. Rather, the insurance company offered to renew the policy by sending plaintiff a renewal package.

Just as the contract had provided a method by which the insurance company could forego renewal, the contract also provided a method by which the insured party could forego renewal. The contract stated:

"If we offer to renew this policy, and the Principal Named Insured declines, it will automatically terminate at the end of the policy term. Failure to pay the required renewal premium means that our offer to renew has been declined."

It is undisputed that plaintiff desired to renew the policy. She therefore sent defendant a check written out in the amount of the renewal premium which defendant had requested for renewal. Regardless of this fact, defendant contends that plaintiff did not accept its renewal offer but, rather, declined it. Defendant's argument is based on the undisputed fact that plaintiff's check was subsequently dishonored by the bank and returned for lack of sufficient funds.

The undisputed facts in this case indicate that plaintiff accepted defendant's renewal offer and that she communicated her acceptance to defendant by mailing her check to the insurance company. Thus, a valid contract was formed.

We find unpersuasive defendant's argument that because plaintiff's check bounced she did not accept defendant's renewal offer. Defendant raises a technical argument based on the language of the previous insurance contract which stated: "Failure to pay the required renewal premium means that our offer to renew has been declined." Defendant's emphasis on this language in the previous contract is misplaced. Insurance policies, like all contracts, are agreements between two or more parties which the courts must interpret. Eghotz v. Creech, 365 Mich. 527, 530, 113 N.W.2d 815 (1962); Stein v. Continental Casualty Co., 110 Mich.App. 410, 418, 313 N.W.2d 299 (1981), lv. den. 414 Mich. 853 (1982). When interpreting an insurance policy, one provision should not be singled out, but the contract should be read as a whole. An ambiguous contract provision must be construed against the insurer/drafter and in favor of the insured. Engel v. Credit Life Ins. Co., 145 Mich.App. 55, 61, 377 N.W.2d 342 (1985); Farm Bureau Mutual Ins. Co. of Michigan v. Hoag, 136 Mich.App. 326, 356 N.W.2d 630 (1984), lv. den. 422 Mich. 920 (1985); Usher v. St. Paul Fire & Marine Ins. Co., 126 Mich.App. 443, 337 N.W.2d 351 (1983). It is hornbook law that insurance...