Unisys Corp. v. INS. COMMISSIONER, Docket No. 211418.

CourtCourt of Appeal of Michigan (US)
Writing for the CourtO'CONNELL, J.
Citation236 Mich. App. 686,601 N.W.2d 155
Docket NumberDocket No. 211418.
Decision Date22 October 1999
PartiesUNISYS CORPORATION and CoreStates Bank, N.A., Plaintiffs-Appellants, v. COMMISSIONER OF INSURANCE and Michigan Life & Health Insurance Guaranty Association, Defendants-appellees.

601 N.W.2d 155
236 Mich.
App. 686

UNISYS CORPORATION and CoreStates Bank, N.A., Plaintiffs-Appellants,
v.
COMMISSIONER OF INSURANCE and Michigan Life & Health Insurance Guaranty Association, Defendants-appellees

Docket No. 211418.

Court of Appeals of Michigan.

Submitted July 8, 1999, at Lansing.

Decided August 3, 1999, at 9:20 a.m.

Released for Publication October 22, 1999.


601 N.W.2d 156
Knaggs, Harter, King & Brake, P.C. (by David R. Brake), Lansing, and Pepper Hamilton LLP (by Laurence Z. Shiekman and John Hyle), Philadelphia, PA, for Unisys Corporation and Corestates Bank, N.A

Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, and Larry F. Brya, Assistant Attorney General, for Insurance Commissioner.

Colpean & Associates (by John C. Colpean and Patricia M. McBain), Lansing, for Michigan Life and Health Insurance Guaranty Association.

Before HOLBROOK, Jr., P.J., and O'CONNELL and ZAHRA, JJ.

O'CONNELL, J.

Plaintiffs Unisys Corporation and CoreStates Bank, N.A., brought this declaratory judgment action on behalf of Michigan residents who participated in the Unisys Savings Plan and the Unisys Retirement Investment Plan, seeking recovery under the Michigan Life and Health Insurance Guaranty Association Act, M.C.L. § 500.7701 et seq.; MSA 24.17701 et seq., for losses arising from the insolvency of Executive Life Insurance Company (ELIC), from which four annuity contracts had been purchased. The trial court granted summary disposition, pursuant to MCR 2.116(C)(10), in favor of defendants Commissioner of Insurance and Michigan Life and Health Insurance Guaranty Association

601 N.W.2d 157
(IGA). Plaintiffs appeal as of right, and we affirm

Unisys provided the Unisys Savings Plan and the Unisys Retirement Investment Plan as defined-contribution pension plans for its employees, who were allowed to allocate their contributions among available investment funds. In 1987 and 1988, Northern Trust Company, an Illinois resident and trustee of the plans, purchased four group annuity contracts from ELIC. These contracts specifically identified the owner of the contracts as the trustee of the plans— Northern Trust Company. On September 1, 1990, Mellon Bank succeeded Northern Trust Company as trustee of the plans, and Mellon Bank was in turn succeeded as trustee by CoreStates Bank on January 1, 1994. Mellon Bank and CoreStates Bank were both residents of Pennsylvania.

In 1991, ELIC was placed in conservation by the California Insurance Commissioner, and subsequently declared insolvent and liquidated by order of the California Superior Court. At that time, over 2,000 Michigan residents were participants in the Unisys plans that included the ELIC contracts. A rehabilitation plan approved by the California Superior Court offered the trustee of the Unisys plans a choice of either a restructured contract or a share of the liquidated assets of ELIC. The plans' trustee at that time elected to receive a share of ELIC's liquidated assets. Thereafter, over $165 million was distributed among plan participants, constituting approximately 94.03 percent of total participant balances in the plans.

Unisys then demanded that the IGA cover the participants' uncompensated losses of more than $200,000 in principal and $1.475 million in interest. After the IGA denied coverage, plaintiffs brought this action, seeking a declaratory judgment that the IGA was required to provide coverage. On cross motions for summary disposition, the trial court held that coverage was not provided under the act, and granted summary disposition in favor of defendants. This appeal ensued.

We review de novo a trial court's denial or grant of summary disposition in a declaratory judgment action. Stajos v. Lansing, 221 Mich.App. 223, 226, 561 N.W.2d 116 (1997); Wills v. State Farm Ins. Co., 222 Mich.App. 110, 114, 564 N.W.2d 488 (1997). When reviewing an order of summary disposition under MCR 2.116(C)(10), we must consider the available pleadings, affidavits, depositions, and other documentary evidence in a light most favorable to the nonmoving party and determine whether the moving party was entitled to judgment as a matter of law. Marx v. Dep't of Commerce, 220 Mich.App. 66, 70, 558 N.W.2d 460 (1996).

The Michigan Life and Health Insurance Guaranty Association Act is designed to protect specified persons "against failure in the performance of contractual obligations under [specified] insurance policies and annuity contracts ... because of the impairment or insolvency of the insurer issuing the policies or contracts." MCL 500.7702(1); MSA 24.17702(1). Coverage under the act is set forth in § 7704, which provides in part:

(1) This chapter shall provide coverage for the policies specified in subsection (2) to the following persons:
(a) To a person, other than nonresident certificate holders under group policies or contracts, who, regardless of where he or she resides, is the beneficiary, assignee, or payee of a person covered under subdivision (b).
(b)
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16 practice notes
  • Derbabian v. S & C SNOWPLOWING, INC., Docket No. 216024.
    • United States
    • Court of Appeal of Michigan (US)
    • May 14, 2002
    ...of law." G.C. Timmis & Co. v. Guardian Alarm Co., 247 Mich.App. 247, 252, 635 N.W.2d 370 (2001), citing Unisys Corp. v. Comm'r of Ins., 236 Mich.App. 686, 689, 601 N.W.2d 155 Similarly, we review de novo a trial court's decision regarding a directed verdict. Morinelli v. Provident Life & Ac......
  • Citizens Ins. Co. v. Pro-Seal, Docket No. 262759.
    • United States
    • Court of Appeal of Michigan (US)
    • November 1, 2005
    ...novo a trial court's decision granting or denying summary disposition in a declaratory judgment action. Unisys Corp. v. Comm'r of Ins., 236 Mich.App. 686, 689, 601 N.W.2d 155 (1999). The construction and interpretation of the language in an insurance contract is also a question of law that ......
  • Rorke v. Savoy Energy, LP, Docket No. 239747.
    • United States
    • Court of Appeal of Michigan (US)
    • March 19, 2004
    ...Michigan Ed. Employees Mut. Ins. Co. v. Turow, 242 Mich.App. 112, 114, 617 N.W.2d 725 (2000), quoting Unisys Corp. v. Comm'r of Ins., 236 Mich.App. 686, 689, 601 N.W.2d 155 (1999). A motion brought under MCR 2.116(C)(8) tests the "legal sufficiency of the complaint" and permits dismissal of......
  • Johnson v. A & M CUSTOM BUILT HOMES OF WEST BLOOMFIELD, Docket No. 246132.
    • United States
    • Court of Appeal of Michigan (US)
    • July 7, 2004
    ...Ed. Employees Mut. Ins. Co. v. Turow, 242 Mich.App. 112, 114-115, 617 N.W.2d 725 (2000), quoting Unisys Corp. v. Comm'r of Ins., 236 Mich.App. 686, 689, 601 N.W.2d 155 Defendant correctly asserts that the general rule of law in construction site injury cases is that only the injured person'......
  • Request a trial to view additional results
16 cases
  • Derbabian v. S & C SNOWPLOWING, INC., Docket No. 216024.
    • United States
    • Court of Appeal of Michigan (US)
    • May 14, 2002
    ...of law." G.C. Timmis & Co. v. Guardian Alarm Co., 247 Mich.App. 247, 252, 635 N.W.2d 370 (2001), citing Unisys Corp. v. Comm'r of Ins., 236 Mich.App. 686, 689, 601 N.W.2d 155 Similarly, we review de novo a trial court's decision regarding a directed verdict. Morinelli v. Provident Life & Ac......
  • Citizens Ins. Co. v. Pro-Seal, Docket No. 262759.
    • United States
    • Court of Appeal of Michigan (US)
    • November 1, 2005
    ...novo a trial court's decision granting or denying summary disposition in a declaratory judgment action. Unisys Corp. v. Comm'r of Ins., 236 Mich.App. 686, 689, 601 N.W.2d 155 (1999). The construction and interpretation of the language in an insurance contract is also a question of law that ......
  • Rorke v. Savoy Energy, LP, Docket No. 239747.
    • United States
    • Court of Appeal of Michigan (US)
    • March 19, 2004
    ...Michigan Ed. Employees Mut. Ins. Co. v. Turow, 242 Mich.App. 112, 114, 617 N.W.2d 725 (2000), quoting Unisys Corp. v. Comm'r of Ins., 236 Mich.App. 686, 689, 601 N.W.2d 155 (1999). A motion brought under MCR 2.116(C)(8) tests the "legal sufficiency of the complaint" and permits dismissal of......
  • Johnson v. A & M CUSTOM BUILT HOMES OF WEST BLOOMFIELD, Docket No. 246132.
    • United States
    • Court of Appeal of Michigan (US)
    • July 7, 2004
    ...Ed. Employees Mut. Ins. Co. v. Turow, 242 Mich.App. 112, 114-115, 617 N.W.2d 725 (2000), quoting Unisys Corp. v. Comm'r of Ins., 236 Mich.App. 686, 689, 601 N.W.2d 155 Defendant correctly asserts that the general rule of law in construction site injury cases is that only the injured person'......
  • Request a trial to view additional results

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