Pierce & Pitt Trucking, Inc. v. Secura Ins.
| Decision Date | 21 April 2022 |
| Docket Number | 355400 |
| Court | Court of Appeal of Michigan — District of US |
| Parties | PIERCE & PITT TRUCKING, INC., Plaintiff-Appellee/Cross-Appellant, v. SECURA INSURANCE, Defendant-Appellant/Cross-Appellee, and MICHIGAN COMMUNITY INSURANCE AGENCY, INC., Defendant-Cross-Appellee. |
UNPUBLISHED
Macomb Circuit Court LC No. 2017-002464-NI
Before: Letica, P.J., and Redford and Rick, JJ.
In this action for breach of contract and negligence, defendant Secura Insurance (Secura) appeals as of right the bench trial verdict in favor of plaintiff Pierce & Pitt Trucking Inc. (PPT). PPT cross-appeals the trial court order denying its motion for sanctions against Secura and defendant Michigan Community Insurance Agency, Inc. (MCIA). We affirm.
On September 21, 2016, six individuals were traveling in a vehicle when they were involved in an accident with a 1994 Hendrickson motor vehicle (HME) driven by Kenneth Pitt in the course of his employment for PPT. PPT was owned by Brian Pitt (Brian) and managed by Patricia Pitt (Patricia) who handled billing and payroll. Since 1995, Brian had met yearly with James Powers of MCIA to address PPT's insurance needs for the vehicles used in its trucking business. Additionally throughout the year, Brian would add and delete vehicles from PPT's insurance policy. For example, Brian might make changes to his insurance policy if a truck broke down or if he did not have a driver for the truck. In the event of a breakdown, Brian would limit the insurance to fire and theft.
In early 2016, the HME was registered to Pierce & Pitt Supply, Inc. (PPS), a material supply company, and insured with Grange Insurance when Powers and Brian met to discuss Brian's insurance needs. According to Brian, no one else at PPT negotiated or handled the automotive insurance needs for the company. To achieve savings on the insurance policy, Powers proposed Brian accept the policy quoted by Secura, which included the HME. Brian agreed to the Secura policy, but requested that the HME be deleted from the policy because it was insured with Grange Insurance through July 2016. At that time, Brian did not have a driver for the HME. Brian paid the premium for the Secura policy in installments.
On May 10, 2016, Brian believed that he had a driver for the HME. Consequently, he contacted Powers to add the HME to the Secura policy. Powers spent the majority of his time on the road meeting with clients and Beverly Marshall (Marshall) of MCIA handled administrative or computer functions involving 95% of Powers' clients. Marshall was notified of the request to add the HME to the Secura policy, and she issued a certificate of insurance effective May 10, 2016, through April 1, 2017. MCIA had entered into an agency agreement with Secura, and MCIA was authorized to bind Secura and issue policies of insurance.
The driver anticipated to start work for PPT fell through. In late May 2016, after the funeral for Brian's father, Kenneth agreed to drive for PPT. In anticipation of Kenneth's start date, Brian asked Patricia for a check to change the registration of the HME from PPS to PPT. At the Secretary of State's (SOS) office, Brian presented the certificate of insurance and paid $1, 492.83 to successfully transfer the HME's registration. During the week of May 27, 2016, Kenneth began working for PPT and was trained to drive on the HME.
In the interim, on May 16, 2016, Laura Bowers, an underwriter for Secura, was investigating the risk associated with insuring the HME. Bowers acknowledged that a certificate of insurance had been issued for the HME, that Marshall had the authority to issue the certificate on Secura's behalf, and that Marshall had binding authority as Secura's agent. In the course of the underwriting process, Bowers emailed Marshall for additional information regarding the HME's vehicle identification number (VIN). On May 27, 2016, Marshall advised Bowers via e-mail that PPT no longer wanted to insure the HME. Consequently, Bowers never completed the underwriting process, and an endorsement was not issued that formally added the HME to the Secura policy. Bowers noted that insurance coverage would have only been available for the HME between the time the certificate of insurance was issued on May 10, 2016, and the date the underwriting process was suspended on May 27, 2016.
After the September 21, 2016 accident, Brian contacted Powers to process the insurance claim for the accident involving the HME. Secura denied the claim, alleging that the HME was never added to PPT's insurance policy. PPT then filed a claim alleging breach of contract and negligence[1] against Secura and MCIA for failing to procure the requested insurance and breach of the standard of care.
Multiple motions for summary disposition were filed by the parties. Secura moved for summary disposition contending that it was not liable because MCIA was the agent of the insured PPT. The trial court denied the motion subject to the disclosure of the agency agreement between MCIA and Secura. Secura renewed this motion for summary disposition and submitted the pertinent documentation. The trial court denied this motion, concluding that in light of the language of the agency agreement MCIA served as a dual agent for both PPT and Secura.
PPT also moved for summary disposition, contending that it never withdrew its request to insure the HME on the Secura policy. In contrast, MCIA presented the deposition testimony of Marshall. Therein, Marshall averred that Patricia requested that the insurance for the HME be withdrawn because the truck was not operable and did not have a driver. However, Marshall did not obtain written confirmation of this request from Patricia, and Marshall did not document the request in MCIA's internal data program known as the "AMS system." And Patricia denied that she was responsible for or knowledgeable about the automotive insurance for PPT. Patricia testified that she never telephoned Marshall and requested the withdrawal or removal of the HME from the Secura policy. Patricia also testified that her communication with MCIA was at Brian's request, and he made any automotive insurance decisions. Brian likewise denied any request to withdraw or remove the HME from the Secura policy. The trial court found that the disputed testimony created a factual issue.
At trial, MCIA presented expert testimony from Michael S. Hale. Hale had 30-plus years as an insurance agent and was an insurance attorney. Hale opined that if Patricia verbally instructed Marshall that PPT no longer desired to insure the HME because it was inoperable and PPT had no driver, Marshall did not violate the standard of care in conveying that message to Secura. If, however, the Pitts did not so instruct Marshall, "that is a clear breach of the standard of care." In other words, if Marshall removed coverage without being authorized to do so, Hale opined she breached the standard of care.
Following the bench trial, the trial court concluded that the testimony proffered by Brian and Patricia was credible. Therefore, a verdict was rendered in favor of PPT. However, the trial court denied PPT's motion for sanctions against MCIA and Secura for raising a frivolous defense. From these rulings, the parties appeal.
A trial court's ruling on a motion for summary disposition is reviewed de novo. Houston v Mint Group, LLC, 335 Mich.App. 545, 557; 968 N.W.2d 9 (2021). Summary disposition is appropriate pursuant to MCR 2.116(C)(10) where there is "no genuine issue as to any material fact, and the moving party is entitled to judgment or partial judgment as a matter of law." MCR 2.116(C)(10). When reviewing a motion for summary disposition challenged under MCR 2.116(C)(10), the court considers the affidavits, pleadings, depositions, admissions, and other admissible documentary evidence then filed in the action or submitted by the parties in the light most favorable to the nonmoving party. MCR 2.116(G)(4), (G)(5); Buhl v City of Oak Park, 507 Mich. 236, 242; 968 N.W.2d 348 (2021).
The proper interpretation of a contract presents a question of law reviewed de novo. Miller-Davis Co v Ahrens Constr, Inc, 495 Mich. 161, 172; 848 N.W.2d 95 (2013). An insurance policy is construed in the same manner as any other type of contract. Meemic Ins Co v Bischer, 323 Mich.App. 153, 157; 915 N.W.2d 1 (2018) (citation omitted). Whether the equitable relief of reformation of a contract is proper under a particular set of facts presents question of law that is also reviewed de novo. See Johnson Family LP v White Pine Wireless, LLC, 281 Mich.App. 364, 371-372; 761 N.W.2d 353 (2008). On appeal, the trial court's factual findings rendered in a bench trial are reviewed for clear error, but its conclusions of law are reviewed de novo. Florence Cement Co v Vettraino, 292 Mich.App. 461, 468; 807 N.W.2d 917 (2011). "A factual finding is clearly erroneous if there is no substantial evidence to sustain it or if, although there is some evidence to support it, the reviewing court is left with the definite and firm conviction that a mistake has been committed." Miller-Davis Co, 495 Mich. at 172-173. The clear error review of factual findings also gives deference to the trial court's superior ability to assess the credibility of the witnesses. Id. at 172.
Secura first contends that the trial court erroneously concluded that the certificate of insurance issued by MCIA for the HME entitled PPT to coverage on the date of the accident because the certificate of insurance was essentially a "worthless" document that merely certified that insurance was in existence on the date of issuance. However our review of the trial court's pertinent opinions indicate...
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