Michigan Mut. Liability Co. v. Pokerwinski

• Decision Date: 30 November 1967
• Docket Number: Docket No. 2966,No. 1,1
• Citation: 8 Mich.App. 475,154 N.W.2d 609
• Parties: MICHIGAN MUTUAL LIABILITY COMPANY, Plaintiff-Appellant, v. Ray POKERWINSKI, Individually and as guardian of Richard Pokerwinski, a minor, Defendants-Appellees
• Court: Court of Appeal of Michigan — District of US

Page 609

154 N.W.2d 609

8 Mich.App. 475

MICHIGAN MUTUAL LIABILITY COMPANY, Plaintiff-Appellant, v. Ray POKERWINSKI, Individually and as guardian of Richard Pokerwinski, a minor, Defendants-Appellees.

Docket No. 2966.

Court of Appeals of Michigan, Division No. 1.

Nov. 30, 1967.

Reginald S. Johnson, Johnson, Campbell & Moesta, Detroit, for appellant.

Richard L. Kanner, Detroit, for appellees.

Before LESINSKI, C.J., and GILLIS and WEIPERT, ^* JJ.

WEIPERT, Judge.

Plaintiff, Michigan Mutual Liability Company, appeals from a declaratory judgment granted defendants below.

The controversy involved here is based upon an insurance policy issued by plaintiff to defendants on June 20, 1963. The policy contained an uninsured motorists clause which provided:

'1. Damages for Bodily Injury Cause By Uninsured Automobiles: The company will pay all sums which the insured * * * shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom . . . sustained by the insured, caused by accident and arising from the ownership, maintenance or use of such uninsured automobile.'

The policy defined an uninsured automobile as:

'(1) An automobile with respect to the ownership, maintenance or use of which there is * * * no bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such automobile or with respect to which there is a bodily injury liability bond or insurance policy applicable at the time of the accident but the company writing the same denies coverage thereunder. * * *'

Richard Pokerwinski, one of the insured defendants, was injured on August 10, 1963, in an automobile collision with a car driven by William D. Delaney. At that time William D. Delaney was insured for public liability and property damage by Banner Mutual Insurance Company. Defendants here initiated suit against the Delaneys in the Wayne County Circuit Court on July 14, 1964. Banner Mutual Insurance Company was liquidated and went into receivership in 1966; thereupon defendants discontinued the lawsuit against the Delaneys.

Subsequently, defendants filed a claim under the above-quoted uninsured motorists clause and submitted the claim to the American Arbitration Association. Appellant, Michigan Mutual Liability Company, instituted an action for declaratory relief in the Wayne County Circuit Court to determine whether appellees were covered under the uninsured motorists provision. The trial court, on these facts as stipulated by the parties and on briefs and oral argument, ruled in favor of defendants' claim that they were covered by this clause. Michigan Mutual has appealed from this judgment.

In determining coverage or lack of coverage under this provision of the policy, the specific issue is whether William D. Delaney was driving an 'uninsured automobile' within the meaning of the policy. Under the definition set out above, it is clear that an automobile can be uninsured in either of two ways. The first is by absence of a 'bodily injury liability bond or insurance policy applicable at the time of the accident.' Delaney did have such a policy on his automobile, and the policy was in effect on the date of the accident. Virtually identical language was construed under identical circumstances in Topolewski v. Detroit Automobile Inter-Insurance Exchange (1967), 6 Mich.App. 286, 148 N.W.2d 906. This Court held in that case that there was no ambiguity in the provision and that an automobile was not rendered 'uninsured' after an accident by subsequent receivership and liquidatioon of the insurer. As to the first part of the definition involved here, Topolewski is controlling; the lower court's judgment cannot therefore be supported under the first part of the policy definition. See also Rousso v. Michigan Employees Mutual Insurance Company (1967), 6 Mich.App. 444, 149 N.W.2d 204.

The definition considered in Topolewski did not, however, provide the alternative method for an automobile to qualify as 'uninsured' that is presented by this case. The second way an automobile may be 'uninsured' within the specific definition of the policy is where an insurer 'denies coverage' on a policy which was in fact in effect at the time of the accident. Michigan Mutual asserts that a denial of coverage requires some express or affirmative action by the insurer; in support of this position, the most persuasive cases are Federal Insurance Company v. Speight (ED SC), 220 F.Supp. 90 and Pattani v. Keystone Insurance Company (1966), 209 Pa.Super. 15, 223 A.2d 899. Defendants on the other hand, claim that there is a denial under the terms of the uninsured motorists provision when there is a failure, for whatever reason, to supply the contracted-for coverage. Defendants urge as sustaining their view: State Farm Mutual Automobile Insurance Company v. Brower (1964), 204 Va. 887, 134 N.E.2d 277, and North River Insurance Company v. Gibson (1964), 244 S.C. 393, 137 S.E.2d 264. It is to be noted...