Stanke v. State Farm Mut. Auto. Ins. Co.

• Citation: 503 N.W.2d 758,200 Mich.App. 307
• Decision Date: 22 June 1993
• Docket Number: Docket No. 136837
• Parties: Richard STANKE, Plaintiff-Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Michigan (US)

Page 758

503 N.W.2d 758

200 Mich.App. 307

Richard STANKE, Plaintiff-Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant.

Docket No. 136837.

Court of Appeals of Michigan.

Submitted Feb. 2, 1993, at Grand Rapids.

Decided June 22, 1993, at 9:25 a.m.

Released for Publication Aug. 24, 1993.

Eric D. Williams, Big Rapids, for plaintiff-appellee.

Fortino, Plaxton & Moskal by Charles M. Fortino, Alma, for defendant-appellant.

Before TAYLOR, P.J., and SAWYER and MURPHY, JJ.

PER CURIAM.

Defendant appeals by leave granted from an order of the circuit court denying defendant's motion for leave to amend its answer to add an additional affirmative defense and denying a motion for reconsideration of the court's order denying defendant's motion for summary disposition. We reverse.

Plaintiff sought a declaratory judgment against defendant to recover payment of damages under a judgment plaintiff obtained against Roy Clothier, defendant's alleged insured. Plaintiff's claim against Clothier arose out of an automobile accident in which plaintiff was a passenger in a vehicle driven by Clothier. The vehicle, a 1971 Chevrolet Camaro, apparently, or at least allegedly, belonged to Clothier, but had an improper title history. That is there had been a series of transactions involving the Camaro in which title was not transferred to the new purchaser. The last registered owner of the vehicle was Terry Vallett, who had transferred the vehicle to Cameron Miller, who had transferred it to Scott Reeves, who had transferred it to Henry Cleaves, who had transferred it to Clothier. Defendant was aware of the litigation against Clothier, but declined to defend Clothier, maintaining that it owed no coverage to Clothier. At issue here is an insurance policy issued to Clothier's father, John Clothier, covering a 1969 Chrysler Newport.

The theory most vigorously pursued by defendant at the beginning of this litigation was that no coverage was owed to Roy Clothier because he was not a resident of his parents' domicile and, therefore, was not an insured under the policy issued by defendant to John Clothier. However, approximately seventeen months after plaintiff's complaint was filed, defendant raised a new theory regarding why it owed no coverage, namely, that the Camaro constituted an owned vehicle not named on the declarations page. Defendant raised this issue by way of a motion for summary disposition, which the trial court denied on the ground that defendant had waived the issue because it had not specifically raised it as a defense in its answer or as an affirmative defense. Defendant thereafter sought leave to amend its answer to specifically add the "owned vehicle exclusion" as a defense. The trial court denied the motion on the basis of inexcusable delay. Defendant thereafter sought leave to appeal to this Court, which was granted.

We first turn to the question whether defendant did, in fact, waive this defense. We conclude that it did not. Under MCR 2.111(F), a defendant must raise defenses and affirmative defenses in its responsive pleading, and the failure to do so constitutes a waiver of the defense or affirmative defense. After reviewing the nature of the issue raised by defendant in its motion for summary disposition, we are not convinced that defendant was endeavoring to raise a "defense" or an "affirmative defense," at least not to an extent beyond that which was raised in the pleadings.

First, we note that plaintiff's complaint in this matter was itself very general, alleging little beyond the fact that it had obtained a judgment against the alleged insured, Roy Clothier, and that Roy Clothier was an insured within the meaning of an insurance policy issued by defendant to John and Julliette Clothier. Defendant answered the complaint and denied that it owed any coverage under the policy. Later it raised its motion for summary disposition, under both MCR 2.116(C)(8) and (10) (failure to state a claim and no genuine issue of material fact). The trial court denied defendant's motion, concluding that it had not raised the issue whether Clothier was operating an owned or nonowned vehicle previously in its answer and, therefore, the defense was waived. We disagree.

Under MCR 2.111(F)(3), affirmative defenses must be raised in the responsive pleading, unless they previously have been raised in a motion for summary disposition before the filing of a responsive pleading, MCR 2.111(F)(2)(a). The failure to raise an affirmative defense as required by the court rule constitutes a waiver of that affirmative defense. Campbell v. St John Hosp., 434 Mich. 608, 616, 455 N.W.2d 695 (1990). However, in this case, defendant was not seeking to raise an affirmative defense. An affirmative defense is a defense that does not controvert the plaintiff's establishing a prima facie case, but that otherwise denies relief to the plaintiff. Campbell, supra. In other words, it is a matter that accepts the plaintiff's allegation as true and even admits the establishment of the plaintiff's prima facie case, but that denies that the plaintiff is entitled to recover on the claim for some reason not disclosed in the plaintiff's pleadings. See 2 Martin, Dean & Webster, Michigan Court Rules Practice, p. 192. For example, the running of the statute of limitations is an affirmative defense. MCR 2.111(F)(3)(a). Thus, although the plaintiff may very well have a valid claim and is able to establish a prima facie case, the defendant, as an affirmative matter, may nevertheless establish that the plaintiff is not entitled to prevail on the claim because the defendant can show that the period of limitation has expired and, therefore, the suit is untimely.

In the case at bar, the issue whether defendant's alleged insured was operating an owned or nonowned vehicle at the time of the accident does not constitute a matter of an affirmative defense. That is, the issue does not allow for plaintiff's establishing his prima facie case, with defendant coming forth with some other reason why plaintiff should not prevail on that claim. Rather, it directly controverts plaintiff's entitlement to prevail. Thus, it directly denies that plaintiff can establish a prima facie case by stating that plaintiff will be unable to prove that there exists a policy of insurance issued by defendant that provides coverage for the accident, thereby establishing defendant's liability to pay the underlying judgment.

To establish his claim, plaintiff must establish, at a minimum, that the person against whom he obtained a judgment, Roy Clothier, was an insured under a policy issued by defendant and that that policy covered the accident. The policy at issue provides for liability coverage for which an insured is liable because of an accident involving "your car," that is, the insured's car:

We will pay damages which an insured becomes legally liable to pay because of:

a. bodily injury to others, and

b. damage to or destruction of property including loss of its use,

caused by accident resulting from the ownership, maintenance or use of your car. [Emphasis in original.]

The policy elsewhere defines "your car" as being the car or vehicle described on the declarations page. As noted above, the declarations page of the policy lists a 1969 Chrysler Newport.

However, the policy at issue also provides coverage for an insured's use of a nonowned automobile:

Coverage for the Use of Other Cars

The liability coverages extend to the use, by an insured, of a newly acquired car, a temporary substitute car or a non-owned car. [Emphasis in original.]

The policy defines a nonowned car as follows:

Non-Owned Car--means a car not:

1. owned by,

2. registered in the name of, or

3. furnished or available for the regular or frequent use of:

you, your spouse, or any relatives. [Emphasis in original.]

The policy also defines the meaning of the word "insured" as follows:

When we refer to your car, a newly acquired car or a temporary substitute car, insured means:

1. you;

2. your spouse;

3. the relatives of the first person named in the declarations;

4. any other person while using such a car if its use is within the scope of consent of you or your spouse; and

5. any other person or organization liable for the use of such a car by one of the above insureds.

When we refer to a non-owned car, insured means:

1. the first person named in the declarations;

2. his or her spouse;

3. their relatives; and

4. any person or organization which does not own or hire the car but is liable for its use by one of the above persons. [Emphasis in original.]

The policy elsewhere defines the word "you" as meaning the named insured on the declarations page (i.e., John Clothier). A "relative" means a person related to a named insured and who lives with the named insured, including unmarried and unemancipated children away at school. Roy Clothier was not a named insured on the declarations page, but would be an insured if he is deemed a "relative," meaning that he not only was related to John Clothier, but also lived with John Clothier.

In his brief, plaintiff maintains that he is seeking coverage under the nonowned car coverage provisions of the policy quoted above. Thus, for plaintiff to prevail, it will be necessary for him to show, inter alia, that Roy Clothier is an "insured" (i.e., he resided with the named insured, John Clothier), and that the Camaro is a nonowned automobile (because it was not a named vehicle on the declarations page and, therefore, it is not a "your car" under that provision of the policy). Therefore, defendant's argument in the motion for summary disposition, that the Camaro was not a nonowned vehicle (or, to state it affirmatively, that it was an owned vehicle), does not constitute an affirmative defense. That is, it does not admit or allow for plaintiff's having established his prima facie case, yet provides some other basis to deny relief. Rather, it...