D Randall Shaw v. Kamil Marcin Nowakowski ( 2023 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
RANDALL SHAW and HILLARY SHAW, UNPUBLISHED
March 30, 2023
Plaintiffs-Appellees,
v No. 360846
Oakland Circuit Court
KAMIL MARCIN NOWAKOWSKI, LC No. 2020-180321-NI
Defendant/Cross-Defendant,
and
THE AUTO CLUB GROUP, doing business as AAA
AUTO CLUB GROUP,
Defendant-Appellant,
and
CRISPELLI’S LLC,
Defendant/Cross-Plaintiff.
Before: CAVANAGH, P.J., and MARKEY and BORRELLO, JJ.
MARKEY, J. (dissenting).
I conclude that the trial court erred by denying the motion for summary disposition filed
by defendant, The Auto Club Group (Auto Club), under MCR 2.116(C)(10). Accordingly, I
respectfully dissent.
This Court reviews de novo a trial court’s ruling on a motion for summary disposition. El-
Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 159; 934 NW2d 665 (2019). Issues involving
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the proper interpretation and legal effect of a contract or contractual clause are likewise subject to
de novo review. Rory v Continental Ins Co, 473 Mich 457, 464; 703 NW2d 23 (2005).1
“Underinsurance automobile insurance protection is not required by law and therefore is
optional insurance offered by some, but not all, Michigan automobile insurance companies.
Because such insurance is not mandated by statute, the scope, coverage, and limitations of
underinsurance protection are governed by the insurance contract and the law pertaining to
contracts.” Mate v Wolverine Mut Ins Co, 233 Mich App 14, 19; 592 NW2d 379 (1998). And in
Home-Owners Ins Co v Andriacchi, 320 Mich App 52, 62; 903 NW2d 197 (2017), this Court
observed:
In reviewing an insurance policy dispute courts must look to the language
of the insurance policy and interpret the terms therein in accordance with
Michigan’s well-established principles of contract construction, the predominant
rule being that an insurance contract must be enforced in accordance with its terms.
Courts will look to the plain language of the insurance policy in determining the
scope of coverage. Although a court strictly construes exclusions in favor of an
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MCR 2.116(C)(10) provides that summary disposition is appropriate when, “[e]xcept as to the
amount of damages, 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.” A motion brought pursuant to MCR
2.116(C)(10) tests the factual support for a party’s action. Pioneer State Mut Ins Co v Dells, 301
Mich App 368, 377; 836 NW2d 257 (2013). “Affidavits, depositions, admissions, or other
documentary evidence in support of the grounds asserted in the motion are required . . . when
judgment is sought based on subrule (C)(10),” MCR 2.116(G)(3)(b), and such evidence, along
with the pleadings, must be considered by the court when ruling on the (C)(10) motion, MCR
2.116(G)(5). “When a motion under subrule (C)(10) is made and supported . . ., an adverse party
may not rest upon the mere allegations or denials of his or her pleading, but must, by affidavits or
as otherwise provided in this rule, set forth specific facts showing that there is a genuine issue for
trial.” MCR 2.116(G)(4). “A trial court may grant a motion for summary disposition under MCR
2.116(C)(10) if the pleadings, affidavits, and other documentary evidence, when viewed in a light
most favorable to the nonmovant, show that there is no genuine issue with respect to any material
fact.” Pioneer State, 301 Mich App at 377. “A genuine issue of material fact exists when the
record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon
which reasonable minds might differ.” West v Gen Motors Corp, 469 Mich 177, 183; 665 NW2d
468 (2003). The trial court is not permitted to assess credibility, weigh the evidence, or resolve
factual disputes, and if material evidence conflicts, it is not appropriate to grant a motion for
summary disposition under MCR 2.116(C)(10). Pioneer State, 301 Mich App at 377. “Like the
trial court’s inquiry, when an appellate court reviews a motion for summary disposition, it makes
all legitimate inferences in favor of the nonmoving party.” Skinner v Square D Co, 445 Mich 153,
162; 516 NW2d 475 (1994). “[S]peculation is insufficient to create an issue of fact.” MEEMIC
Ins Co v DTE Energy Co, 292 Mich App 278, 282; 807 NW2d 407 (2011). A court may only
consider substantively admissible evidence actually proffered by the parties when ruling on the
motion. Maiden v Rozwood, 461 Mich 109, 121; 597 NW2d 817 (1999); see also MCR
2.116(G)(6).
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insured, clear and specific exclusions must be given effect, and coverage under a
policy is lost if any exclusion within the policy applies to an insured’s particular
claims. Respect for the freedom to contract entails that we enforce only those
obligations actually assented to by the parties. A court cannot rewrite a contract if
its terms are expressly stated. [Quotation marks, citations, brackets, and ellipses
omitted.]
I start my analysis by assuming—consistent with plaintiffs’ position—that the pertinent
limit of liability under the Auto Club insurance policy for purposes of the policy’s definition of
“underinsured motor vehicle” is the $500,000 per-accident limit. Therefore, in light of the
$300,000 automobile liability coverage for defendant, Kamil Nowakowski, under his policy with
Berkshire Hathaway Guard Insurance (Berkshire), I will deem Nowakowski’s vehicle an
“underinsured motor vehicle.”
Part III of the Auto Club policy addresses uninsured and underinsured motorist coverage
and, relevant to this appeal, ¶ 3 of the “LIMITS OF LIABILITY” section of Part III provides:
3. If the damages are caused by an underinsured motor vehicle, the
most we will pay will be the lesser of:
a. the difference between the Limits of Liability of this
coverage and the sum of the Limits of Liability under all
bodily injury liability insurance policies, bonds or other
security required to be maintained under law applicable to
the driver or to the person or organization legally responsible
for the underinsured motor vehicle and applicable to the
underinsured motor vehicle; or
b. the difference between the amount of the insured person’s
damages for bodily injury and the sum of the Limits of
Liability under all bodily injury liability insurance policies,
bonds or other security required to be maintained under law
applicable to the driver or to the person or organization
legally responsible for the underinsured motor vehicle and
applicable to the underinsured motor vehicle. [Bold in
original.]
Applying paragraph 3.a. above, the $300,000 liability limit under Nowakowski’s Berkshire
policy must be subtracted from the $500,000 per-accident limit under the Auto Club policy,
resulting in $200,000 in available underinsured motorist (UIM) benefits before contemplation of
any other potential reductions. Paragraph 3.b. would only apply if plaintiffs’ damages for bodily
injury were under $500,000, in which case Auto Club’s liability limit for UIM benefits would be
less than $200,000. Again making an assumption favorable to plaintiffs, I will apply ¶ 3.a.,
meaning that ¶ 3 limits Auto Club’s total liability for UIM benefits to $200,000.
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Next, the $200,000 amount calculated under ¶ 3 is subject to possible further reduction
under ¶ 4 of the “LIMITS OF LIABILITY” section of Part III of the Auto Club policy, which
provides, in pertinent part:
4. Any amount payable under this Part will be reduced by:
a. any amount paid or payable by or on behalf of the owner or
operator of the uninsured motor vehicle or organization
which may be legally liable;
b. any amount paid or payable under the Liability Insurance
Coverage of this or any other policy . . . . [Bold in original.]
Paragraph 4.a. plainly does not apply to reduce the $200,000 amount in UIM benefits
because Nowakowski’s vehicle was not uninsured. But ¶ 4.b. clearly applies in light of the liability
insurance coverage under the dramshop insurance policy issued by Fremont Insurance to
defendant, Crispelli’s LLC. See MCL 436.1803. That policy provides liability coverage and
certainly qualifies as “any other policy.” We cannot ignore the plain and unambiguous language
of ¶ 4.b. Andriacchi, 320 Mich App at 62. Paragraph 4.b. does not state that the “other policy”
must be one that is directly applicable to the underinsured motor vehicle or its operator. Indeed,
consideration of all bodily injury liability insurance policies applicable to the underinsured motor
vehicle and its driver is already required by ¶ 3 for purposes of limiting Auto Club’s liability.
Paragraph 4 provides for possible further reduction of Auto Club’s liability, and if the term
“policy” in ¶ 4.b. is construed in the same manner as the term is used in ¶ 3, we would effectively
be rendering ¶ 4.b. meaningless and surplusage. And “courts must . . . give effect to every word,
phrase, and clause in a contract and avoid an interpretation that would render any part of the
contract surplusage or nugatory.” Klapp v United Ins Group Agency, Inc, 468 Mich 459, 468; 663
NW2d 447 (2003).
Therefore, moving forward, the $200,000 limit on Auto Club’s liability for UIM benefits
as derived from application of ¶ 3 must be reduced pursuant to ¶ 4.b. by “any amount paid or
payable under” Crispelli’s dramshop liability insurance policy. That policy has a $1 million per-
occurrence liability limit, and there is no genuine issue of material fact that plaintiffs settled the
dramshop claims against Crispelli’s in the amounts of $325,000 with respect to Randall Shaw and
$25,000 with regard to Hillary Shaw. Accordingly, the “paid” $350,000 amount must be
subtracted from the $200,000 amount, leaving a negative dollar figure. Thus, Auto Club owes no
UIM benefits to plaintiffs under the plain and unambiguous language of the insurance policy.
The majority concludes that Auto Club waived any appellate argument under ¶ 4.b. because
the issue was never raised below in the trial court. In In re Conservatorship of Murray, 336 Mich
App 234, 241; 970 NW2d 372 (2021), this Court explained:
This Court has discretion to review unpreserved issues in civil cases if
review would prevent manifest injustice, if review is necessary for proper
resolution of the case, or if the issue involves a question of law and the facts
necessary for determination have been presented. This Court has reviewed forfeited
issues when declining to do so would result in a miscarriage of justice. This Court,
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however, exercises its discretion sparingly and only when exceptional
circumstances warrant review. [Citations omitted; emphasis added.]
Here, all three of the reasons for reviewing an unpreserved issue are implicated. Taking
into consideration ¶ 4.b. would prevent a potential manifest injustice, i.e., rewriting of the
insurance policy and enforcing an obligation to which the parties did not assent. Taking into
consideration ¶ 4.b. is also necessary for a proper resolution of the case. And, finally, taking into
consideration ¶ 4.b. entails or involves a question of law, and the facts necessary to determine and
resolve the issue were presented and are undisputed. In short, review of Auto Club’s argument
under ¶ 4.b. is warranted and in accord with applicable rules of contractual analysis of insurance
policies.
The trial court’s ruling denying Auto Club’s motion for summary disposition is erroneous;
consequently, it should be reversed. Accordingly, I respectfully dissent.
/s/ Jane E. Markey
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