Royce v. Citizens Ins. Co.

• Citation: 219 Mich.App. 537,557 N.W.2d 144
• Decision Date: 22 October 1996
• Docket Number: Docket No. 186185
• Parties: Stella A. ROYCE, Plaintiff-Appellee, v. CITIZENS INSURANCE COMPANY, a Michigan corporation, Defendant-Appellant.
• Court: Court of Appeal of Michigan (US)

Page 144

557 N.W.2d 144

219 Mich.App. 537

Stella A. ROYCE, Plaintiff-Appellee, v. CITIZENS INSURANCE COMPANY, a Michigan corporation Defendant-Appellant.

Docket No. 186185.

Court of Appeals of Michigan.

Submitted Sept. 10, 1996, at Grand Rapids.

Decided Oct. 22, 1996, at 9:00 a.m.

Released for Publication Jan. 2, 1997.

Gruel, Mills, Nims & Pylman, LLP by Scott R. Melton, Grand Rapids, for plaintiff-appellee.

Eardley Law Offices, P.C. by John F. Eardley and Eugenie B. Mackay, Grand Rapids, for defendant-appellant.

Before MICHAEL J. KELLY, P.J., and O'CONNELL and K.W. SCHMIDT, ^* JJ.

O'CONNELL, Judge.

In this declaratory action, defendant insurer appeals as of right the order of the circuit court granting summary disposition pursuant to MCR 2.116(C)(9) in favor of plaintiff. The court determined that an insurance contract providing that defendant would defend against suits alleging, and indemnify plaintiff for all damages arising from, acts of "slander" on her part encompassed her alleged act of "slander of title." We affirm pursuant to MCR 2.116(C)(10).

The convoluted facts underlying the instant suit were set forth by this Court in the related case of Royce v. Duthler, 209 Mich.App. 682, 685-688, 531 N.W.2d 817 (1995). In Royce, we determined the interests of various parties, including plaintiff, with respect to a disputed parcel of land and an easement on an adjoining piece of property. During the imbroglio preceding the suit, and one must read the facts of Royce to truly appreciate the situation, plaintiff filed an affidavit of interest in the disputed property, effectively blocking its sale. The prospective purchasers of the property, the Shabazes, filed suit against plaintiff, alleging tortious interference with contract and slander of title. This suit was held in abeyance pending this Court's resolution of Royce.

Presumably, the Shabazes' suit against plaintiff remains in abeyance. Two weeks before plaintiff filed the affidavit of interest, thereby allegedly committing slander of title, plaintiff obtained a homeowner's insurance policy from defendant. The policy provided that defendant was to defend against and indemnify plaintiff for "damages," which were defined in an amendatory endorsement (number F-70) as follows:

Damages includes damages for bodily injury and for property damages and except in connection with any business, occupation, trade or profession, also includes damages for libel, slander, false arrest, malicious prosecution and false imprisonment.

After the Shabazes filed suit, alleging slander of title, plaintiff tendered the defense of the action to defendant. Defendant denied coverage. Plaintiff then filed this declaratory judgment action against defendant, contending that defendant breached the insurance contract where the contract provided coverage for slander, yet defendant refused to defend plaintiff in a suit alleging slander of title.

Subsequently, defendant moved for summary disposition under MCR 2.116(C)(8) and (10) on the ground that its policy did not provide coverage for slander of title because intentional torts did not fall within the meaning of an "occurrence" as the term was used in the policy. Plaintiff responded to defendant's motion and moved for summary disposition under MCR 2.116(C)(10) on the ground that there was no dispute that defendant had a duty to defend her.

After hearing oral arguments for the parties' motions, the trial court issued its written opinion and determined that summary disposition in plaintiff's favor pursuant to MCR 2.116(C)(9) was warranted under the facts. On April 14, 1995, the trial court entered an order to this effect. On May 10, 1995, the trial court entered judgment in plaintiff's favor and awarded the costs of defending the underlying suit to her.

Defendant now argues that the trial court erred in granting summary disposition in plaintiff's favor because its policy of insurance excluded coverage for all intentional torts such as slander of title. This Court reviews de novo as a question of law a trial court's determination concerning a motion for summary disposition. Lindsey v. Harper Hosp. 213 Mich.App. 422, 425, 540 N.W.2d 477 (1995).

Initially, we would note that the trial court characterized the motion as being decided on the basis of MCR 2.116(C)(9), yet the parties argued that summary disposition in their respective favors was warranted because there were no issues of material fact in dispute. Summary disposition under MCR 2.116(C)(9) is granted when an opposing party fails to plead a valid defense to a claim against it. Nicita v. Detroit (After Remand), 216 Mich.App. 746, 750, 550 N.W.2d 269 (1996). A motion under this subrule tests the sufficiency of the defendant's pleading by accepting all the well-pleaded allegations as true. Lepp v. Cheboygan Area Schools, 190 Mich.App. 726, 730, 476 N.W.2d 506 (1991). Thus, a motion under MCR 2.116(C)(9) is analogous to one under MCR 2.116(C)(8) in that the trial court may look only to the parties' pleadings. Grebner v. Clinton Charter Twp., 216 Mich.App. 736, 740, 550 N.W.2d 265 (1996). Nevertheless, the parties below submitted documentary evidence in support of their motions, so the trial court could not properly grant summary disposition in plaintiff's favor under MCR 2.116(C)(9). If summary disposition is granted under one subpart of the court rule when it was actually appropriate under another, the defect is not fatal and does not preclude appellate review as long as the record permits review under the correct subrule. Brown v. Drake-Willock Int'l, Ltd., 209 Mich.App. 136, 143, 530 N.W.2d 510 (1995). Because the parties argued that there were no issues of material fact in dispute, we will address this issue as a motion pursuant to MCR 2.116(C)(10).

Generally, a motion for summary disposition pursuant to MCR 2.116(C)(10) tests whether there is factual support for a party's claim. Mitchell v. Dahlberg, 215 Mich.App. 718, 725, 547 N.W.2d 74 (1996). When determining whether summary disposition is proper under this subrule, the trial court must consider the documentary evidence, which includes the pleadings, depositions, admissions, and affidavits, that is available to it. Zurich-American Ins. Co. v. Amerisure Ins. Co., 215 Mich.App. 526, 530, 547 N.W.2d 52 (1996). The moving party has the initial burden of identifying the matters that have no factual disputes and supporting its position with the above-listed documentary evidence. Guardian Industries Corp. v. Dep't of Treasury, 198 Mich.App. 363, 378, 499 N.W.2d 349 (1993). The nonmoving party then has the burden to use documentary evidence to show that a genuine issue of material fact exists. Coleman-Nichols v. Tixon Corp., 203 Mich.App. 645, 650, 513 N.W.2d 441 (1994). After giving the nonmoving party the benefit of reasonable doubt, the trial court must determine whether a record might be developed that will leave open an issue upon which reasonable minds could differ. Nelson v. American Sterilizer Co., 212 Mich.App. 589, 594, 538 N.W.2d 80 (1995). Therefore, the policy must be analyzed to see whether any genuine issue of material fact exists concerning defendant's duty to defend plaintiff.

It is well settled in Michigan that an insurer's duty to defend is broader than its duty to indemnify. Auto-Owners Ins. Co. v. City of Clare, 446 Mich. 1, 15, 521 N.W.2d 480 (1994). In order to determine whether an insurer has a duty to defend its insured, this Court must look to the language of the insurance policy and construe its terms to find the scope of the coverage of the policy. Arco Industries Corp. v. American Motorists Ins. Co., 448 Mich. 395, 402, 531 N.W.2d 168 (1995). Generally, an insurance policy is a contract between the insurer and the insured. Auto-Owners Ins. Co. v. Churchman, 440 Mich. 560, 566, 489 N.W.2d 431 (1992). If a trial court is presented with a dispute between these parties over the meaning of the policy, the trial court must determine what the agreement is and enforce it. Kass v. Wolf, 212 Mich.App. 600, 604, 538 N.W.2d 77 (1995). When determining what the parties' agreement is, the trial court should read the contract as a whole and give meaning to all the terms contained within the policy. Churchman, supra at 566, 489 N.W.2d 431. The trial court shall give the language contained within the policy its ordinary and plain meaning so that technical and strained constructions are avoided. Hosking v. State Farm Mutual Automobile Ins. Co., 198 Mich.App. 632, 633-634, 499 N.W.2d 436 (1993). A policy is ambiguous when, after reading the entire document, its language can be reasonably understood in different ways. Trierweiler v. Frankenmuth Mutual Ins. Co., 216 Mich.App. 653, 656-657, 550 N.W.2d 577 (1996). If the trial court determines that the policy is ambiguous, the policy will be construed against the...