Matifa Culbert v. Starr Indemnity & Liability Company ( 2015 )

STATE OF MICHIGAN
COURT OF APPEALS
MATIFA CULBERT, JERMAINE WILLIAMS, UNPUBLISHED
and TEARRA MOSBY, July 16, 2015
Plaintiffs-Appellees,
and
SUMMIT MEDICAL GROUP, LLC, INFINITE
STRATEGIC INNOVATIONS, INC., and
DOCTORS MEDICAL, LLC,
Intervening Plaintiffs,
v No. 320784
Wayne Circuit Court
STARR INDEMNITY & LIABILITY LC No. 12-013777-NF
COMPANY,
Defendant-Appellant,
and
FARMERS INSURANCE COMPANY, also
known as FARMERS INSURANCE
EXCHANGE,
Defendant-Appellee.
Before: FORT HOOD, P.J., and SAAD and RIORDAN, JJ.
PER CURIAM.
In this no-fault insurance dispute, defendant Starr Co Indemnity and Liability Company
(Starr Co) appeals by leave granted an order of the trial court denying its motion for summary
disposition. We reverse and remand for entry of an order granting Starr Co’s motion.
I. FACTUAL BACKGROUND
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On September 30, 2011, Tearra Mosby, Matifa Culbert, and Jermaine Williams
(collectively, “the individual plaintiffs”) were involved in a car accident while Mosby was
driving her 2007 Chrysler PT Cruiser. Mosby was stopped at a stop sign and began to make a
right turn. As she did, another car struck the front driver side of the PT Cruiser. The driver of
the other vehicle fled from the accident in his car.
Starr Co subsequently denied benefits to the individual plaintiffs under a policy it had
issued seven days prior to the accident. Mosby’s then-boyfriend, Traves Fudge, had applied for
the policy. Two vehicles were listed on the policy, a 2004 Chevrolet Suburban and Mosby’s PT
Cruiser. However, only Fudge was listed as a named insured under the policy. Both Mosby and
Fudge were listed as drivers. In the application for the policy, Fudge represented that he owned
all vehicles listed in the application, the Suburban and the PT Cruiser. However, it is undisputed
that Mosby was the owner of the PT Cruiser, not Fudge.
The individual plaintiffs sued Starr Co for unreasonably failing to pay personal protection
insurance (PIP) and uninsured motorist benefits. Starr Co moved for summary disposition,
claiming that it was under no obligation under the policy to pay benefits. The trial court agreed
with the individual plaintiffs and denied Starr Co’s motion. Starr Co now appeals.
II. SUMMARY DISPOSITION
A. STANDARD OF REVIEW
Starr Co contends that the trial court erred in denying its motion for summary disposition.
“This Court reviews the grant or denial of summary disposition de novo to determine if the
moving party is entitled to judgment as a matter of law.” Maiden v Rozwood, 461 Mich. 109,
118; 597 NW2d 817 (1999).1 As our Supreme Court has explained:
A motion under MCR 2.116(C)(10) tests the factual sufficiency of the
complaint. In evaluating a motion for summary disposition brought under this
subsection, a trial court considers affidavits, pleadings, depositions, admissions,
and other evidence submitted by the parties, MCR 2.116(G)(5), in the light most
favorable to the party opposing the motion. Where the proffered evidence fails to
establish a genuine issue regarding any material fact, the moving party is entitled
to judgment as a matter of law. [Id. at 120.]
The proper interpretation of a contract is a question of law reviewed de novo on appeal. Klapp v
United Ins Group Agency, Inc, 468 Mich. 459, 468; 663 NW2d 447 (2003). “The proper
1
Starr Co brought its motion pursuant to MCR 2.116(C)(8) and (C)(10). However, Starr Co
attached documentary evidence to its brief, and the trial court appears to have considered this
evidence when deciding the motion. Under such circumstances, we review the motion as
decided under MCR 2.116(C)(10). Cuddington v United Health Servs, Inc, 298 Mich. App. 264,
270; 826 NW2d 519 (2012).
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interpretation of a statute is a legal question that this Court also reviews de novo.” McCormick v
Carrier, 487 Mich. 180, 188; 795 NW2d 517 (2010).
B. PIP BENEFITS
“Insurance policies are contracts and, in the absence of an applicable statute, are ‘subject
to the same contract construction principles that apply to any other species of contract.’ ” Titan
Ins Co v Hyten, 491 Mich. 547, 553; 817 NW2d 562 (2012), quoting Rory v Continental Ins Co,
473 Mich. 457, 461; 703 NW2d 23 (2005). This Court “enforce[s] contracts according to their
terms, as a corollary of the parties’ liberty of contracting.” Holland v Trinity Health Care Corp,
287 Mich. App. 524, 526; 791 NW2d 724 (2010). A contract’s terms are given “their plain and
ordinary meanings.” Id. at 527. However, no-fault insurance policies must be construed in a
manner that complies with the no-fault act. Corwin v DaimlerChrysler Ins Co, 296 Mich. App.
242, 257; 819 NW2d 68 (2012).
“Under the no-fault automobile insurance act, MCL 500.3101 et seq., insurance
companies are required to provide first-party insurance benefits, referred to as personal
protection insurance (PIP) benefits, for certain expenses and losses. MCL 500.3107; MCL
500.3108.” Johnson v Recca, 492 Mich. 169, 173; 821 NW2d 520 (2012). Pursuant to MCL
500.3114(1):
Except as provided in subsections (2), (3), and (5),2 a personal protection
insurance policy described in [MCL 500.]3101(1) applies to accidental bodily
injury to the person named in the policy, the person’s spouse, and a relative of
either domiciled in the same household, if the injury arises from a motor vehicle
accident. [Footnote added.]
Plaintiffs are not entitled to benefits from Starr Co pursuant to MCL 500.3114(1) as they
are not named insureds. “As this Court has held, the ‘person named in the policy’ under MCL
500.3114(1) is synonymous with the ‘named insured,’ and persons designated merely as drivers
under a policy . . . are neither named insureds nor persons named in the policy.” Stone v Auto-
Owners Ins Co, 307 Mich. App. 169, 175; 858 NW2d 765 (2014). Although Fudge and Mosby
are listed as drivers under the policy, only Fudge is a named insured. Nor do the individual
plaintiffs claim to be married to or relatives of Fudge. Accordingly, they are not entitled to no-
fault benefits under MCL 500.3114(1). See Stone, 307 Mich. App. at 175.
The individual plaintiffs, however, contend that they are entitled to benefits from Starr
Co under MCL 500.3114(4), which provides:
2
MCL 500.3114(2), (3), and (5). None of these provisions are at issue here. MCL 500.3114(2)
applies to operators and passengers of vehicles “operated in the business of transporting
passengers . . . [,]”; MCL 500.3114(3) applies to employees and relatives of employees suffering
injury “while an occupant of a motor vehicle owned or registered by the employer . . . [,]”; and
MCL 500.3114(5) applies to accidents involving motorcycles.
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Except as provided in subsections (1) to (3), a person suffering accidental
bodily injury arising from a motor vehicle accident while an occupant of a motor
vehicle shall claim personal protection insurance benefits from insurers in the
following order of priority:
(a) The insurer of the owner or registrant of the vehicle occupied.
(b) The insurer of the operator of the vehicle occupied.
“[E]ven if the owner, registrant, or operator of a vehicle is not a named insured under a
policy, the named insured’s insurer may also constitute an ‘insurer’ of the owner, registrant, or
operator under MCL 500.3114(4) if the policy expands the definition of ‘insured person’ beyond
the named insured so that it includes those persons.” Stone, 307 Mich. App. at 176-177.
It is undisputed that Mosby was both the operator and owner of the PT Cruiser. Thus, the
relevant question is whether Starr Co is Mosby’s insurer. See MCL 500.3114(4). “[F]or
purposes of MCL 500.3114(4) [this] depends on the language of the relevant insurance policy.”
Dobbelaere v Auto-Owners Ins Co, 275 Mich. App. 527, 532-533; 740 NW2d 503 (2007)
(quotation marks and citation omitted).
Coverage for PIP benefits is conferred by Part B of the policy. The policy states:
B. Insured as used in this part means:
1. you or any family member;
2. any other person occupying your covered auto;
3. any other person injured because of an accident involving any other
auto operated by you or any family member, and to which the bodily
injury liability insurance of this Policy applies.
The policy defines “you” as:
1. the named insured listed in the Declarations Page; and
2. the spouse if a resident of the same household.
A “family member” is defined as “a person related to you by blood, marriage or adoption who is
a resident of your household.”
In this case, Mosby is not an “insured” under Part B(1) of the contract because she is
neither “you” (the named insured, Fudge, or his spouse), nor one of Fudge’s family members as
defined under the policy. For the same reason, Mosby is not an insured under Part B(3). Under
that section, an “insured” is an individual injured in an accident involving a vehicle “operated by
you or any family member[,]” and Mosby is neither “you” nor a “family member” under the
policy.
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The remaining section, Part B(2), includes in the definition of “insured” “any other
person occupying your covered auto.” Thus, the question becomes whether the PT Cruiser meets
the policy’s definition of “your covered auto.” Section B of the policy defines “your covered
auto” as an auto:
1. to which the Liability Insurance Coverage of this Policy applies;
2. to which the Liability Insurance Coverage of this Policy applies, if it does not
have the security required by the Code, and is operated but not owned by you or a
family member.
The second sentence above does not apply because the PT Cruiser was not being operated by
“you or a family member[]” at the time of the accident. This leaves only the first section of Part
B as potentially providing coverage to occupants of the PT Cruiser.
Liability Insurance Coverage is governed by Part A of the policy. Under this part, Starr
Co “will pay damages for bodily injury or property damage for which any insured becomes
legally responsible because of an auto accident.” Under Part A, an “insured” is defined as:
1. you and your family members.
2. any person using your covered auto.
3. any other person or organization with respect to legal liability for acts or
omissions of:
a. any person covered under this part while using your covered auto.
b. you or any family member covered under this part while using any
auto other than your covered auto if not owned or hired by that person or
organization.
Thus, coverage only would be extended under Part A of the policy if the PT Cruiser
meets Part A’s definition of “your covered auto.” Because Part A contains no separate definition
of “your covered auto,” the general definitions provided at the outset of the policy apply. Under
the general definitions, “your covered auto” is defined as:
1. any auto shown in the Declarations Page owned by you or leased under a
written agreement for a continuous period of at least 6 months;
2. any replacement auto on the date you become the owner, you must advise us
within 14 days. The vehicle will have the same coverage as the vehicle it
replaces.
3. any additional auto you acquire ownership of during the policy period, if
a. you notify us within 14 days of its acquisition; and
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b. as of the date of acquisition, we insured all your owned autos. We
will not provide Other Than Collision and/or Collision coverage for your
additional auto unless and until you request it within the required 14 days
and have paid the premium for the coverage.
4. any auto not owned by you or a family member used temporarily. This auto
must be a substitute for another vehicle described in this definition which has
been withdrawn from normal use due to:
a. breakdown;
b. repair;
c. servicing;
d. loss; or
e. destruction.
5. any trailer you own while it is attached to your covered auto.
The PT Cruiser plainly does not fall into the second, third, fourth, or fifth categories.
Regarding the second and third categories, the PT Cruiser was never owned by “you,” i.e., Fudge
or his spouse. Regarding the fourth category, the PT Cruiser was not used temporarily as a
substitute for another vehicle. Regarding the fifth category, the PT Cruiser was not a trailer
attached to another vehicle. This leaves the first category above. To meet the definition stated in
the first category, the vehicle must appear “in the Declarations Page” and be “owned by you or
leased under a written agreement . . . .” While the PT Cruiser does appear in the declarations
page, it was not owned by “you” because it was owned by Mosby, not Fudge or his spouse. Nor
was the PT Cruiser leased.
Thus, the PT Cruiser does not meet the policy’s definition of “your covered auto.”
Because the individual plaintiffs were not occupying a vehicle that meets the definition of “your
covered auto,” none of the individual plaintiffs meet Part B’s definition of an “insured.”
Accordingly, none of the individual plaintiffs were insured under the policy, and Starr Co is not
liable to pay their PIP benefits under MCL 500.3114(4). As such, the trial court erred when it
denied Starr Co’s motion for summary disposition.
Nevertheless, the individual plaintiffs argue that Mosby was a named insured under the
policy. But they conflate the terms “named insured” and “driver.” Mosby was named as a
driver, but not a named insured, under the policy. As previously explained, naming an
individual as a driver does not elevate their status to that of a named insured. See Stone, 307
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Mich App at 175.3 Further, the policy was not ambiguous as the individual plaintiffs argue. A
contract is ambiguous if its provisions may be interpreted in conflicting ways. Klapp, 468 Mich.
at 467.
A contract is not ambiguous “even [if] inartfully worded or clumsily arranged,” if it
“fairly admits of but one interpretation . . . .” Mich Twp Participating Plan v Pavolich, 232
Mich. App. 378, 382; 591 NW2d 325 (1998). As the above analysis demonstrates, the policy
requires us to follow a convoluted trail, navigating through several provisions to decipher the
coverage issue. However, that journey does not render the policy ambiguous. The provisions
are not susceptible to conflicting interpretations, and accordingly, they are not ambiguous.
Klapp, 468 Mich. at 467.
C. UNINSURED COVERAGE
Starr Co next contends that summary disposition is proper because the policy does not
provide uninsured motorist benefits to the individual plaintiffs. “Because providing [uninsured
motorist] coverage is optional and not statutorily mandated under the no-fault act, the policy
language alone controls the circumstances entitling a claimant to an award of benefits.” DeFrain
v State Farm Mut Auto Ins Co, 491 Mich. 359, 367; 817 NW2d 504 (2012).
Uninsured motorist coverage is provided by Part C of the policy. The policy provides:
We will pay compensatory damages which an insured is legally entitled to
recover from the owner or operator of an uninsured motor vehicle because of
bodily injury:
1. Sustained by an insured; and
2. Caused by an accident.
Thus, in order to be entitled to uninsured motorist benefits, one must be an “insured”
under the policy. Part C defines an “insured” as:
1. you or a family member.
2. any other person occupying your covered auto.
3. any person for damages that person is entitled to recover because of bodily
injury to you, a family member, or another occupant of your covered auto.
3
On the basis of their belief that Mosby was a named insured, the individual plaintiffs also
contend that the contract must be reformed to provide coverage pursuant to MCL 500.3114.
Because Mosby was not a named insured under the policy, there is no apparent conflict.
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Thus, for Starr Co to be liable for uninsured motorist coverage, the injured individual
must meet the policy’s definition of “you” or “family member,” or have been an occupant of
what the policy defines as “your covered auto.”
Part C contains no separate definitions of “you,” “family member,” or “your covered
auto.” Thus, the general definitions provided at the outset of the policy control. None of the
individual plaintiffs meet the definition of “you,” as none of them are named insureds or a
spouse of Fudge, who is the only named insured under the policy. Nor are any of the individual
plaintiffs family members of Fudge, as none of the individual plaintiffs are related to Fudge by
blood, marriage, or adoption. And as discussed supra, the PT Cruiser does not meet the policy’s
general definition of “your covered auto.”
Accordingly, the policy does not provide uninsured motorist coverage to the individual
plaintiffs.4
III. CONCLUSION
The trial court erred in denying Starr Co’s motion for summary disposition as under the
terms of the insurance contract, Starr Co was not liable to pay the individual plaintiffs PIP
benefits or uninsured motorist benefits. Reversed and remanded for entry of an order granting
Starr Co’s motion for summary disposition. We do not retain jurisdiction.
/s/ Karen M. Fort Hood
/s/ Henry William Saad
/s/ Michael J. Riordan
4
Because the policy does not provide coverage to the individual plaintiffs, we decline to address
Starr Co’s alternative argument that it may rescind the policy due to fraud.
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