Hunt v. Huber
| Decision Date | 26 June 2014 |
| Docket Number | Calendar No. 3.,Docket Nos. 146433,146434,146435. |
| Citation | 496 Mich. 366,852 N.W.2d 562 |
| Parties | HUNT v. DRIELICK. Huber v. Drielick. Luczak v. Drielick. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
O'Neill Wallace & Doyle PC, David Carbajal (by David Carbajal and Robert Andrew Jordan) for Marie Hunt, Brandon J. Huber, Thomas and Noreen Luczak, and Great Lakes Carriers Corporation.
Hickey, Ciancialo, Fishman & Finn, PC, Troy (by Steven M. Hickey and Andrew L. Finn), for Sargent Trucking, Inc.
David S. Anderson and Nicolette S. Zachary for Empire Fire and Marine Insurance Company.
This appeal involves Empire Fire and Marine Insurance Company's obligations under an “Insurance for Non–Trucking Use” policy issued to Drielick Trucking. The policy contains a business-use exclusion, which includes two clauses that Empire argues preclude coverage in this case. The Court of Appeals agreed that the first clause precludes coverage when the covered vehicle is not carrying property at the time of the accident, as in this case. Thus, the Court of Appeals expressly declined to address the second clause relating to leased covered vehicles. Hunt v. Drielick, 298 Mich.App. 548, 553 n. 2, 828 N.W.2d 441 (2012). We hold that the Court of Appeals erred for the reasons explained in this opinion and reverse the judgment of the Court of Appeals. Additionally, we remand this case to the trial court for further fact-finding to determine whether Drielick Trucking and Great Lakes Carriers Corporation (GLC) entered into a leasing agreement for the use of Drielick Trucking's semi-tractors as contemplated under the policy's clause related to a leased covered vehicle.
Roger Drielick owns Drielick Trucking, a commercial trucking company. It seems that throughout most of the year in 1995, Drielick Trucking leased its semi-tractors to Sargent Trucking (Sargent). Around October 1995, Roger orally terminated the lease agreement with Sargent and began doing business with Bill Bateson, one of the operators of GLC, the other being his wife at the time, Jamie Bateson.
On January 12, 1996, Bill Bateson dispatched Corey Drielick, a truck driver employed by Drielick Trucking, to pick up and deliver a trailer of goods stored on GLC's property. While driving the semi-tractor without an attached trailer, Corey picked up his girlfriend and proceeded to GLC's truck yard. 1 When he was less than two miles away from the yard, Corey was involved in a multivehicle accident. Eugene Hunt died, and Noreen Luczak and Brandon Huber were seriously injured.
Marie Hunt (on behalf of her deceased husband), Thomas and Noreen Luczak, and Huber filed suits against Corey and Roger Drielick, Drielick Trucking, Sargent, and GLC. Empire, which insured Drielick Trucking's semi-tractors under a non-trucking-use, or bobtail, policy, denied coverage and refused to defend under the policy's business-use and named-driver exclusions. Plaintiffs settled with Sargent and GLC. Plaintiffs later entered into consent judgments with the Drielicks and Drielick Trucking. The parties also entered into an “Assignment, Trust, and Indemnification Agreement,” wherein they agreed that Roger Drielick would assign the rights under the insurance policy with Empire to plaintiffs, Sargent, and GLC. Sargent and GLC agreed to help plaintiffs' collection efforts from Empire in exchange for a portion of any proceeds received from Empire.
Sargent and GLC filed writs of garnishment against Empire. In response, Empire filed a motion to quash, arguing again that the policy exclusions apply, among other things. The trial court denied Empire's motion and entered an order to execute the consent judgments, reasoning that the business-use exclusion does not apply and the named-driver exclusion is invalid under MCL 500.3009(2).2 The Court of Appeals affirmed the trial court's ruling regarding the named-driver exclusion but reversed the trial court's ruling regarding the business-use exclusion, holding that further factual determinations were necessary because the fact that the semi-tractor “was traveling bobtail at the time of the accident, creat[ed] a question of fact whether the truck was being used for a business purpose at that time.” Hunt v. Drielick, unpublished opinion per curiam of the Court of Appeals, issued October 5, 2004 ( Docket Nos. 246366, 246367, and 246368), p. 5, 2004 WL 2238628. The Court mentioned that the policy exclusions are clear but “whether this accident was a covered event is not,” explaining that Roger Drielick orally revoked his lease with Sargent, and, contrary to federal regulations, there was no written lease with GLC.3Id.
On remand, the trial court concluded that, “even if there was a lease between Drielick and [GLC],” the business-use exclusion does not preclude coverage. On appeal, the Court of Appeals reversed, holding that the first clause of the business-use exclusion—precluding coverage if injury or damage occurred “while a covered ‘auto’ is used to carry property in any business” 4—applies, despite the fact that the truck was not actually carrying property at the moment of the accident. Hunt, 298 Mich.App. at 555–557, 828 N.W.2d 441, citing Carriers Ins. Co. v. Griffie, 357 F.Supp. 441, 442 (W.D.Pa., 1973).
Plaintiffs sought leave to appeal, which this Court granted.5
This case involves the interpretation and application of an insurance policy, which is a question of law reviewed de novo. Cohen v. Auto Club Ins. Ass'n, 463 Mich. 525, 528, 620 N.W.2d 840 (2001).
An insurance policy is similar to any other contractual agreement, and, thus, the court's role is to “determine what the agreement was and effectuate the intent of the parties.” Auto–Owners Ins. Co. v. Churchman, 440 Mich. 560, 566, 489 N.W.2d 431 (1992). “[W]e employ a two-part analysis” to determine the parties' intent. Heniser v. Frankenmuth Mut. Ins. Co., 449 Mich. 155, 172, 534 N.W.2d 502 (1995). First, it must be determined whether “the policy provides coverage to the insured,” and, second, the court must “ascertain whether that coverage is negated by an exclusion.” Id. (citation and quotation marks omitted). While “[i]t is the insured's burden to establish that his claim falls within the terms of the policy,” id., “[t]he insurer should bear the burden of proving an absence of coverage,” Fresard v. Mich. Millers Mut. Ins. Co., 414 Mich. 686, 694, 327 N.W.2d 286 (1982) (opinion by Fitzgerald, C.J.). See, also, Ramon v. Farm Bureau Ins. Co., 184 Mich.App. 54, 61, 457 N.W.2d 90 (1990). Additionally, “[e]xclusionary clauses in insurance policies are strictly construed in favor of the insured.” Churchman, 440 Mich. at 567, 489 N.W.2d 431. See, also, Group Ins. Co. of Mich. v. Czopek, 440 Mich. 590, 597, 489 N.W.2d 444 (1992) (). However, “[i]t is impossible to hold an insurance company liable for a risk it did not assume,” Churchman, 440 Mich. at 567, 489 N.W.2d 431, and, thus, “[c]lear and specific exclusions must be enforced,” Czopek, 440 Mich. at 597, 489 N.W.2d 444.
At issue is the proper interpretation of the bobtail insurance policy. “ ‘Bob-tail’ in trucking parlance is the operation of a tractor without an attached trailer,” and “[f]or insurance purposes, ... it typically means coverage ‘only when the tractor is being used without a trailer or with an empty trailer, and is not being operated in the business of an authorized carrier.’ ” Prestige Cas. Co. v. Mich. Mut. Ins. Co., 99 F.3d 1340, 1343 (C.A.6, 1996) (citations omitted). The relevant portions of the bobtail insurance policy in this case state:
A. COVERAGE:
We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from ownership, maintenance or use of a covered auto....
* * *
This insurance does not apply to any of the following:
“Bodily injury” or “property damage” while a covered “auto” is used to carry property in any business or while a covered “auto” is used in the business of anyone to whom the “auto” is leased or rented.
B. THE BUSINESS–USE EXCLUSION
Because the parties agree that the policy provided coverage at the time of the accident,6 we must decide whether the business-use exclusion applies to preclude coverage. Churchman, 440 Mich. at 567, 489 N.W.2d 431 (). The business-use exclusion includes two separate clauses that could apply to a covered vehicle that may prevent Empire's liability under the policy. Specifically, the policy does not apply “[1] while a covered ‘auto’ is used to carry property in any business or [2] while a covered ‘auto’ is used in the business of anyone to whom the ‘auto’ is leased or rented.” Mich. Pub. Serv. Co. v. City of Cheboygan, 324 Mich. 309, 341, 37 N.W.2d 116 (1949) (). See, also, GC Timmis & Co. v. Guardian Alarm Co., 468 Mich. 416, 421, 662 N.W.2d 710 (2003) ().
The business-use exclusion's first clause states that there is no coverage under the policy “while a covered ‘auto’ is used to carry property in any business.” Considering the commonly used meaning of the undefined terms of the clause to ascertain the contracting parties' intent, Czopek, 440 Mich. at 596, 489 N.W.2d 444, the word “while” means “[a]s long as; during the time that,” The American Heritage Dictionary of the English Language (1981). Further, “use” is defined as “ ‘to employ for some purpose; put...
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