Home-Owners Ins. Co. v. Perkins

• Decision Date: 11 June 2019
• Docket Number: No. 344926,344926
• Citation: 328 Mich.App. 570,939 N.W.2d 705
• Parties: HOME-OWNERS INSURANCE COMPANY, Plaintiff/Counterdefendant-Appellee/Cross-Appellant, v. Nancy PERKINS, also known as Nancey Perkins, Defendant/Counterplaintiff-Appellant/Cross-Appellee.
• Court: Court of Appeal of Michigan — District of US

328 Mich.App. 570

939 N.W.2d 705

HOME-OWNERS INSURANCE COMPANY, Plaintiff/Counterdefendant-Appellee/Cross-Appellant,

v.Nancy PERKINS, also known as Nancey Perkins, Defendant/Counterplaintiff-Appellant/Cross-Appellee.

No. 344926

Court of Appeals of Michigan.

Submitted April 9, 2019, at Grand Rapids.

Decided June 11, 2019, 9:00 a.m.

Yeager, Davison & Day, PC (by Phillip K. Yeager and Renee L. Malkowski ) for plaintiff.

Robert W. Mysliwiec for defendant.

Before: Beckering, P.J., and Servitto and Stephens, JJ.

Per Curiam In this insurance dispute, defendant, Nancy Perkins, appeals by right the trial court's order dismissing plaintiff Home-Owners Insurance Company's claim against her and the order dismissing her counterclaim against plaintiff. Plaintiff cross-appeals the trial court's order dismissing its claim against defendant. At issue in this fire-damage case is the proper interpretation of MCL 500.2833(1)(q) and its impact on the viability of each party's claim. For the reasons set forth in this opinion, we affirm.

I. RELEVANT FACTS AND PROCEEDINGS

The underlying facts are not in dispute. Plaintiff issued a homeowner's insurance policy to defendant for accidental loss and damage to property located in Niles, Michigan. The policy term was from December 6, 2014 to December 6, 2015, and included coverage of $ 129,000 on her dwelling, $ 90,300 on her personal property, $ 32,500 for additional living expenses, and further coverages for debris removal at the property location. On March 4, 2015, fire substantially destroyed defendant's home and personal possessions. She immediately notified plaintiff of her loss. Subsequently, she prepared and submitted an inventory of her personal possessions based on her best guess of the age and purchase price of the items she could recall being in her house, and she submitted a proof-of-loss form based on this inventory. On August 28, 2015, plaintiff wrote a letter to defendant formally denying her insurance claim, alleging that she had committed arson, misrepresented facts in her claim of loss, and failed to comply with other provisions in the fire insurance policy. Plaintiff mailed the letter to defendant in care of her attorney at the time, James Jesse. Plaintiff sent the letter by certified mail, and Jeannette Jesse signed for it on September 11, 2015. Defendant averred in an affidavit submitted to the trial court that she did not receive plaintiff's denial letter.

On October 5, 2016, plaintiff filed suit against defendant, alleging that defendant breached the insurance contract by submitting a claim that was "knowingly inaccurate and grossly exaggerated," by failing to comply with certain terms of the contract, and by concealing material facts and circumstances about her loss "as part of an effort to fraudulently induce" plaintiff to pay her claim. Because of these alleged breaches, plaintiff asserted, it had been obligated to pay $ 56,750 to Fifth Third Bank, the mortgagee of defendant's house. Plaintiff sought a judgment against defendant for $ 56,750.

On February 6, 2017, defendant filed an answer denying plaintiff's allegations. Along with her answer, she filed a counterclaim alleging that plaintiff had breached the policy of insurance by wrongfully denying her claim for coverage under the policy after the fire. She sought the full benefits due under the policy, as well as 12% statutory interest under MCL 500.2006.¹

Plaintiff filed an answer and affirmative defenses to the counterclaim, and on April 10, 2017, a filed motion for summary disposition under MCR 2.116(C)(7) (statute of limitations). In its supporting brief, plaintiff argued that the applicable limitations period in the policy and in MCL 500.2833(1)(q) barred defendant's counterclaim.² MCL 500.2833(1) mandates the contents required in every fire insurance policy issued or delivered in Michigan. Subdivision (q) requires fire insurance policies to contain a provision declaring:

That an action under the policy may be commenced only after compliance with the policy requirements. An action must be commenced within 1 year after the loss or within the time period specified in the policy, whichever is longer. The time for commencing an action is tolled from the time the insured notifies the insurer of the loss until the insurer formally denies liability.

In purported compliance with this statutory mandate, the fire insurance policy plaintiff issued to defendant contains an amendment to its property-protection section that the parties refer to as the ‘‘suit-against-us’’ provision and that states:

We may not be sued unless there is full compliance with all the terms of this policy. Suit must be brought within one year after the loss or damage occurs. The time for commencing a suit is tolled from the time you notify us of the loss or damage until we formally deny liability for the claim.

Plaintiff argued that defendant's claim accrued when it formally denied her claim in the August 28, 2015 letter. Under the terms of the suit-against-us provision, defendant had until August 28, 2016, to file a suit against plaintiff. According to plaintiff, defendant's February 2017 counterclaim was well outside this one-year period and, therefore, it was barred by the suit-against-us provision in the policy and by MCL 500.2833(1)(q).

In her response to plaintiff's motion to dismiss, defendant argued that MCL 500.2833(1)(q) referred to all actions under the policy, not just actions filed by the insured. Thus, to comply with the statute, the one-year period in the suit-against-us provision had to be interpreted to apply to both plaintiff and defendant, and by filing its own suit after the limitations period expired, plaintiff had intentionally waived the statute-of-limitations defense with respect to defendant's claim. Defendant argued in the alternative that even if the suit-against-us provision were interpreted to apply only to insureds, the trial court should estop plaintiff from enforcing the one-year limitations period because plaintiff purposefully waited until the period had expired before suing her. This delay was clearly prejudicial to defendant because it deprived her of the knowledge that plaintiff had denied her claim and, thus, prevented her from filing suit during the one-year period. Defendant contended that estoppel by laches applied regardless of whether plaintiff's delay was intentional or merely dilatory.

In reply, plaintiff asserted that the language in MCL 500.2833(1)(q), as well as that of the suit-against-us provision, applied only to the insured. Plaintiff did not address defendant's waiver argument but contended that defendant could not use the doctrine of estoppel to circumvent the clear and unambiguous language of the fire insurance policy and that the court certainly could not use estoppel to reform a statute. Finally, plaintiff argued that if the court determined that the language in the statute applied to both the insurer and the insured, then the remedy was to dismiss both actions.

The parties' arguments at the June 5, 2017 hearing on plaintiff's motion for summary disposition were consistent with their briefs. Ruling from the bench, the trial court found that plaintiff had notified defendant of the denial of her claim by sending the August 28, 2015 letter to attorney Jesse and that it was Jesse's responsibility to deliver the denial letter to defendant. No evidence indicated that plaintiff had attempted to lull defendant into thinking it had approved her complaint until the limitations period expired. After determining that waiver and estoppel did not apply as a matter of law, the trial court granted plaintiff's motion for summary disposition of defendant's counterclaim. The court noted that the question remained whether the one-year period in the suit-against-us provision also barred plaintiff's claim but observed that this issue was not before the court because defendant had not filed a motion for summary disposition based on the untimeliness of plaintiff's complaint. The court entered a corresponding order on June 16, 2017.

Subsequently, defendant filed two motions for reconsideration. The trial court denied both motions.³ Defendant also filed motions seeking permission to present to the jury the evidence supporting her counterclaim or, alternatively, to adjourn the trial so that she could pursue appellate review of the trial court's order granting plaintiff summary disposition of her counterclaim.

The trial court granted defendant's request for alternative relief and adjourned the trial, but defendant's delayed application for leave to appeal in this Court was unsuccessful. Home-Owners Ins. Co. v. Perkins , unpublished order of the Court of Appeals, entered April 10, 2018 (Docket No. 340933).

After this Court denied her application, defendant filed a renewed motion to submit to the jury proof of her counterclaim as well as the waiver issue. At the end of the hearing on defendant's motion, the trial court indicated that it had repeatedly encouraged defendant to file a motion for summary disposition to put the question of whether MCL 500.2833(1)(q) applied to insurers as well as insureds squarely before the court, but defendant had not. The trial court denied defendant's renewed motion, but it ruled that MCL 500.2833(1)(q) applies to actions by both insurers and insureds. Because plaintiff had filed its complaint after the one-year limitations period, the court dismissed plaintiff's claim sua sponte.

II. ANALYSIS

A. STANDARDS OF REVIEW

We review de novo questions of statutory interpretation, Allstate Ins. Co. v. State Farm Mut. Auto. Ins. Co. , 321 Mich. App. 543, 550, 909 N.W.2d 495 (2017), as well as the interpretation of clear contractual language, DeFrain v. State Farm Mut. Auto. Ins. Co. , 491 Mich. 359, 366-367, 817 N.W.2d 504 (2012). "Waiver is a mixed question of law and fact. The definition of waiver is a matter of law, but whether the facts of a particular case constitute a waiver is a question of fact."...