Farm Bureau General Insurance Company v. Esther Susin

STATE OF MICHIGAN
COURT OF APPEALS
FARM BUREAU GENERAL INSURANCE UNPUBLISHED
COMPANY, March 10, 2016
Plaintiff/Counter Defendant-
Appellee,
v No. 322017
Oakland Circuit Court
ESTHER SUSIN, LC No. 2013-132618-CZ
Defendant/Cross Defendant/Cross
Defendant-Appellant,
and
LAKES COMMUNITY CREDIT UNION,
Defendant/Cross Defendant/Third
Party Plaintiff-Appellee/Cross
Plaintiff,
and
ASSOCIATED ADJUSTERS, INC.,
Defendant/Cross Plaintiff/Counter
Plaintiff-Appellee/Cross Defendant,
and
R-VALUE CONCRETE STRUCTURES,
Third Party Defendant/Cross
Defendant-Appellee,
and
ARROW FINANCIAL SERVICES, DISCOVER
BANK, L.H. CONSTRUCTION CONCEPTS,
INC., RICH DAGENAIS, and LEOBARDO
HUANTES, JR.,
Defendants.
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Before: M. J. KELLY, P.J., and CAVANAGH and SHAPIRO, JJ.
PER CURIAM.
In this dispute involving the replacement of a home after a fire, defendant, Esther Susin,
appeals by right on her own behalf the trial court’s final order granting the motion for summary
disposition by third-party defendant, R-Value Concrete Structures (R-Value). On appeal, Susin
argues that the trial court also erred when it granted summary disposition in favor of plaintiff,
Farm Bureau General Insurance Company, cross-defendants Associated Adjuster’s, Inc.
(Associated Adjusters), and Lakes Community Credit Union (Lakes Credit Union). Because we
conclude the trial court did not err when it granted the motions at issue, we affirm.
During the pendency of this appeal, we granted Farm Bureau’s motion to affirm the trial
court’s order granting it summary disposition and allowing it to deposit the contested funds with
the court under MCR 7.211(C)(3).1 Consequently, we shall address only that portion of Susin’s
appeal involving Associated Adjusters, R-Value, and Lakes Credit Union.2
I. BASIC FACTS
This appeal is from one of three lawsuits involving the reconstruction of Susin’s house
after a fire in October 2010. Susin granted Lakes Credit Union a mortgage on her home to
secure a note and named it as an additional on her homeowner’s insurance policy with Farm
Bureau. After her home was destroyed by fire, Susin filed a claim with Farm Bureau. In July
2011, Farm Bureau paid her $171,190 for the loss of the home, but not the contents. Susin
demanded an appraisal for the loss of her personal property and hired Associated Adjusters to
appraise her property. She authorized Farm Bureau to pay Associated Adjuster’s fee out of any
proceeds obtained through the appraisal. Farm Bureau agreed to pay an additional $83,810
under the policy in October 2012.
In February 2013, Farm Bureau issued two checks totaling $83,810. It made the checks
payable to Susin, Lakes Credit Union, and Associated Adjusters. However, when a dispute arose
over who among the co-payees was entitled to the insurance proceeds, Farm Bureau sued the co-
payees in interpleader and asked the trial court to authorize it to deposit the full amount into an
account with the court for disbursement after the parties litigated their claims.
In relevant part, Associated Adjusters sued Susin to recover its fee. The trial court
granted Associated Adjusters’ motion for summary disposition under MCR 2.116(C)(10), and
eventually ordered the payment of $18,123.56 from the funds to Associated Adjusters.
1
Farm Bureau Gen Ins Co v Esther Susin, unpublished order of the Court of Appeals, entered
February 26, 2015 (Docket No. 322017), lv denied Farm Bureau Gen Ins Co v Susin, ___ Mich
___; 871 NW2d 185 (2015).
2
The remaining parties are not involved in this appeal.
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Lakes Credit Union also added by leave granted a claim against Susin for judicial
foreclosure. It alleged that Susin violated the provision in her mortgage that required her to
maintain the property to prevent it from deteriorating or decreasing and to promptly repair or
restore the property. It asked the trial court to declare the entire $135,999.90 balance of Susin’s
note due immediately and authorize foreclosure against the mortgaged property. The trial court
granted Lakes Credit Union’s motion for summary disposition under MCR 2.116(C)(9) and
(C)(10). It entered a judgment of foreclosure and set the redemption period at 30 days. The
sheriff sold the property at auction to KKJ Investments, and the trial court confirmed the sale.
In August 2012, Susin contracted with R-Value to do certain concrete work for
$59,796.47. After R-Value performed the contract, Susin withheld $15,790.14. Susin contended
that certain windows were positioned lower than the building code allowed. R-Value maintained
that the position of the windows corresponded to the blue prints and met the code as long as the
proper windows were installed. Susin rejected R-Value’s explanation. When the dispute could
not be resolved, R-Value filed a claim of lien against the property. Lakes Credit Union brought
R-Value into the case through a third-party complaint naming R-Value as a party with an interest
in the interpleaded funds. And R-Value sued Susin for the amount withheld. R-Value moved for
summary disposition on its cross-complaint under MCR 2.116(C)(10) and the trial court granted
the motion. It then entered a judgment against Susin for $19,280.57.
Susin now appeals in this Court the trial court’s orders granting summary disposition.
II. SUMMARY DISPSOITION
A. STANDARDS OF REVIEW
We review de novo a trial court’s decision on a motion for summary disposition. Auto
Club Group Ins Co v Burchell, 249 Mich. App. 468, 479; 642 NW2d 406 (2002).
B. ANALYSIS
A motion for summary disposition under MCR 2.116(C)(10) tests the factual sufficiency
of a claim. Smith v Globe Life Ins Co, 460 Mich. 446, 454; 597 NW2d 28 (1999). “In reviewing
a motion for summary disposition brought under MCR 2.116(C)(10), a trial court considers
affidavits, pleadings, depositions, admissions, and documentary evidence filed in the action or
submitted by the parties, MCR 2.116(G)(5), in the light most favorable to the party opposing the
motion.” Quinto v Cross & Peters Co, 451 Mich. 358, 362; 547 NW2d 314 (1996). If the
documentary evidence shows that there is no genuine issue of material fact and the moving party
is entitled to judgment as a matter of law, the trial court may grant the motion. Id.; MCR
2.116(C)(10). “[T]he moving party has the initial burden of supporting its position by affidavits,
depositions, admissions, or other documentary evidence,” and then the burden shifts “to the
opposing party to establish that a genuine issue of disputed fact exists.” Quinto, 451 Mich. at
362. If the opposing party fails to present documentary evidence establishing the existence of a
material factual dispute, the motion is properly granted. Id. at 363.
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1. ASSOCIATED ADJUSTERS
Susin’s dispute with Associated Adjusters concerns whether it was entitled to a fee
calculated as seven percent of all proceeds paid to Susin by Farm Bureau, or only seven percent
of the additional proceeds. Susin implies that the contract is ambiguous because the fee schedule
contradicts the scope of the contract.
Whether a contract is ambiguous is a question of law that we review de novo. Wilkie v
Auto-Owners Ins Co, 469 Mich. 41, 47; 664 NW2d 776 (2003). If the contract is ambiguous, its
meaning is a question of fact for the jury. Coates v Bastian Bros, Inc, 276 Mich. App. 498, 504;
741 NW2d 539 (2007). A contract is ambiguous if two provisions irreconcilably conflict with
each other or when a term is equally susceptible to more than one meaning. Id. at 503. An
unambiguous contract must be enforced according to its terms. Id.
The contract at issue required Associated Adjusters to “assist in the preparation,
presentation and adjusting of insurance claims with Insurer(s)” for a comprehensive list of
coverages, e.g., building, contents, loss of use, living expenses, etc. In exchange for these
services, Susin agreed to pay Associated Adjusters the following fee:
Payment: Insured(s) agree to pay and assigns to Adjuster ___% (not to exceed
10%) of amounts recovered under the Scope of Contract and paid by Insurer(s) in
settlement of the loss. [“In settlement of the loss” includes payments made by
Insurer(s) in full or partial resolution of the claim, including payments made by
agreement, court judgment, mediation, arbitration, appraisal, and other forms of
dispute resolution.]
Someone drew a line through the blank in the payment paragraph and handwrote above:
“see attached fee schedule.” The attached fee schedule provided:
With respect to the building structure:
1. The Public Adjusting fee shall equal:
a) 25% of the sum of all Farm Bureau Insurance payments to the Insured
and for the Insured’s benefit that exceed $150,000.
b) The building structure fee shall not exceed 7% of the sum of all Farm
Bureau Insurance payments to the Insured and for the Insured’s benefit.
The contract also contained a prominently placed merger clause, stating that “[t]his
Contract constitutes the entire agreement between the parties and shall not be modified without
the written agreement of both.”
In ascertaining the meaning of a contract, we “give the words used in the contract their
plain and ordinary meaning that would be apparent to a reader of the instrument.” Rory v
Continental Ins Co, 473 Mich. 457, 464; 703 NW2d 23 (2005). Here, Susin agreed to pay
Associated Adjusters a fee up to “7% of the sum of all Farm Bureau Insurance payments to the
Insured and for the Insured’s benefit.” “All” means “the whole amount, quantity or extent.” See
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Merriam-Webster’s Collegiate Dictionary (2003). As such, Susin plainly agreed to pay a fee
calculated by using all the proceeds paid out on Susin’s behalf by Farm Bureau.
Susin nevertheless argues that she understood the contract differently than Associated
Adjusters, but this argument cannot prevail; courts presume that parties “understand the import
of a written contract and had the intention manifested by its terms.” Zurcher v Herveat, 238
Mich. App. 267, 299; 605 NW2d 329 (1999) (quotation marks and citation omitted); see also Int’l
Transp Ass’n v Bylenga, 254 Mich. 236, 239; 236 N.W. 771 (1931) (“This court has many times
held that one who signs a contract will not be heard to say, when enforcement is sought, that he
did not read it, or that he supposed it was different in its terms.”).
Susin argued below that attaching the fee schedule to the contract effectively amended
the contract, thus rendering it unenforceable until approved by the Commissioner of the Office of
Financial and Insurance Regulations. However, she cited no authority for her position below or
on appeal, leaving it to us to search for authority to sustain or reject it. We decline to do so. See
Magee v Magee, 218 Mich. App. 158, 161; 553 NW2d 363 (1996) (“A party may not leave it to
this Court to search for authority to sustain or reject its position.”). Likewise, because she failed
to provide any meaningful argument or relevant authority to support her assertion that the fee.
Consequently, she has abandoned these arguments. Id.
Finally, Susin asserts that Associated Adjusters’ fee violates MCL 600.2516, which
provides that “[n]o fee or compensation allowed by law, shall be demanded or received by any
officer or person for any service, unless such service was actually rendered by him . . . .”
However, this statute pertains to fees allowed for services mentioned in the Revised Judicature
Act, MCL 600.101 et seq., and “done or performed in the several courts in this state, by the
officers thereof, or in any proceeding authorized by law . . . .” MCL 600.2501. Because
Associated Adjusters is not an officer of the court nor was its appraisal a court proceeding or
service, MCL 600.2516 is inapplicable.
The trial court did not err when it granted Associated Adjusters’ motion for summary
disposition.
2. LAKES CREDIT UNION
Lakes Credit Union supported its motion with documentary evidence; specifically, it
relied on its mortgage, the coverage limits of Susin’s homeowner’s insurance policy, the
evidence of the claims by Associated Adjusters and R-Value against the interpleaded insurance
proceeds, an accounting of the construction trust fund showing a remaining balance of
$6,291.54, an estimate from a licensed residential builder showing that it would take $316,000 to
complete the rebuild, the expiration of Susin’s building permits, and the amount due on her
mortgage. It also pointed to Susin’s acknowledgement of the mortgage provisions under which
it sought foreclosure and her admission that construction had ceased on the property and that the
elements had damaged some parts of the incomplete structure. Susin contended, however, that
completion of the house was economically feasible because Lakes Credit Union’s estimate of the
cost of completion was inflated, and the insurance proceeds and other monies due her were
sufficient to finish the project. She also maintained that Lakes Credit Union delayed
construction by disbursing funds to a contractor without her authorization, and that Farm Bureau,
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Lakes Credit Union, Associated Adjusters, and R-Value contributed to the delay in construction
by preventing the release of the interpleaded funds.
Considering the evidence in the light most favorable to Susin, we conclude that the trial
court did not err by granting Lakes Credit Union’s motion for summary disposition. Because
Lakes Credit Union met its initial burden to support its position by “affidavits, depositions,
admissions, or other documentary evidence,” the burden shifted to Susin “to establish that a
genuine issue of disputed fact exists.” Quinto, 451 Mich. at 362. She did not meet this burden.
Susin’s claim of sufficient funds was speculative at best, requiring that she prove that
Associated Adjusters and R-Value were not entitled to the amounts they demanded, and that
Lakes Credit Union was liable to her for triple damages for the conversion of funds allegedly
paid without her authorization, plus damages for delaying reconstruction. Yet she failed to
provide evidence of the alleged conversion or a delay upon which her claim for damages could
be sustained. She argued that Lakes Credit Union’s estimate for completing the house was
inaccurate, but she supported that contention with personal assertions of how large the house was
and how much it would cost per square foot to build it. To survive summary disposition, Susin
had to offer more than denials and allegations. She had to present documentary evidence
establishing the existence of a material factual dispute. Id. at 363. Because she failed to present
evidence sufficient to establish a question of fact on these issues, the trial court did not err when
it granted Lakes Credit Union’s motion for summary disposition. Id.3
3. R-VALUE
R-Value attached to its summary disposition motion a copy of the parties signed contract,
copies of blueprints, a materials list, e-mails evidencing the dispute between Susin and R-
Value’s owner, Jake Vierzen, R-Value’s claim of lien, and Vierzen’s affidavit stating, among
other things, that R-Value had completed the work according to the specifications it was given,
and that Susin owed $15,790.47 on the contract. Susin claimed that R-Value performed its work
inadequately by positioning openings for some of the windows lower than allowed by the
building code. However, Susin failed to provide documentary evidence sufficient to create a
genuine issue of material fact regarding the improper placement of the windows. The e-mails
she attached to her answer to R-Value’s motion establish the terms of the dispute with R-Value,
but they do not create a genuine issue of material fact regarding whether there were actual
deficiencies in R-Value’s performance. Having failed to meet her burden, the trial court did not
err in granting R-Value’s motion for summary disposition motion under MCR 2.116(C)(10). Id.
Susin’s sole objection to the amount of R-Value’s judgment stems from her insistence
that R-Value was not entitled to its full contract price because it abandoned the contract by not
repairing the alleged flaws in its work. Susin failed to establish this allegation, and provided the
trial court with no other reason to deny R-Value’s motion. Based on the foregoing, it cannot be
said that the trial court erred in the amount it awarded R-Value.
3
Because the trial court properly granted the motion under MCR 2.116(C)(10), we decline to
address whether it was also appropriate to grant summary disposition under (C)(9).
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C. REDEMPTION PERIOD
Susin next contends that the trial court erred by denying her motion to amend the
redemption period from 30-days to six months. MCL 600.3140(1) sets the redemption period in
judicial foreclosures at six months. Lakes Credit Union requested a 30-day redemption period
because the property was unoccupied for purposes of MCL 600.3241a. MCL 600.3241a applies
to foreclosures by advertisement and establishes the requirements for a conclusive presumption
that the premises have been abandoned. Ultimately, we need not address whether MCL
600.3241a applies to judicial foreclosures because, even if it does, it requires property to be
abandoned, not simply unoccupied. Susin’s actions in this litigation show that she had not
abandoned the property.
Nevertheless, even though the trial court did err by setting a 30-day redemption period,
Susin is not entitled to relief because she cannot establish prejudice. See Murchie v Standard Oil
Co, 355 Mich. 550, 560; 94 NW2d 799 (1959). At no time during the course of these
proceedings did Susin show that she had the money to redeem her mortgage. Her insurance
proceeds were subject to the claims of creditors, the amounts she anticipated recovering from
Lakes Credit Union depended on damages she had not proved, and although she said she was
seeking grants under a veteran’s assistance program, she never presented any evidence that she
had a reasonable chance of obtaining the funds. In short, there is no record evidence indicating
that Susin could have redeemed her mortgage, even if she had been given six-months to redeem
the property. Under the circumstances, any error was harmless beyond a reasonable doubt. See
Heshelman v Lombardi, 183 Mich. App. 72, 85; 454 NW2d 603 (1990).
D. THIRD-PARTY COMPLAINT
Susin next contends that the trial court erred in denying her motion to dismiss Lakes
Credit Union’s third-party complaint bringing R-Value into the litigation. MCR 2.204(A)(1)
provides, in relevant part, that “any time after commencement of an action, a defending party, as
a third-party plaintiff, may serve a summons and complaint on a person not a party to the action
who is or may be liable to the third-party plaintiff for all or party of the plaintiff’s claim.”
Generally, the potential third-party defendant must be liable to the third-party plaintiff, through
either indemnity, subrogation, contribution, or some other theory. See Husted v Consumers
Power Co, 376 Mich. 41, 47; 135 NW2d 370 (1965).
In any event, to the extent that the trial court might have erred when it allowed Lakes
Credit Union to bring R-Value into the litigation under MCR 2.204(A)(1), that error would be
harmless because the trial court had the authority to allow R-Value to be joined under MCR
2.207. See MCR 3.603(A)(2). MCR 2.207 provides that “[p]arties may be added or dropped by
order of the court on motion of a party or on the court’s own initiative at any stage of the action
and on terms that are just.” “MCR 2.207 is not of itself a blanket authorization for adding
parties. That is, parties who are brought in under the second sentence of this rule must be parties
who are properly joined under MCR 2.203 to 2.206.” 2 Mich Ct Rules Prac, Text § 2207.3 (6th
ed.). MCR 2.206(A)(2)(b) allows all persons to be joined together into one action as defendants
“if their presence in the action will promote the convenient administration of justice.” In this
case, adding R-Value promoted the convenient administration of justice by including as
defendants all those whose claims arose from the destruction and reconstruction of the subject
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property; including R-Value allowed resolution of the lien-based dispute between R-Value and
Susin without additional inconvenience and expense to the parties, and prevented an additional
drain on judicial resources.
There were no errors warranting relief.
Affirmed.
/s/ Michael J. Kelly
/s/ Mark J. Cavanagh
/s/ Douglas B. Shapiro
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