810 N.W.2d 106
Mich. Ct. App.2011Background
- Dawson seeks Farm Bureau’s underinsured-motorist benefits for a judgment against Olinger after a car crash in which he was a passenger.
- Olinger’s insurer paid $20,000 of a $100,000 judgment; Farm Bureau did not participate in the prior litigation.
- Policy provision states Farm Bureau is not bound by judgments or settlements without written consent.
- Dawson repeatedly dismissed Farm Bureau from prior actions until a judgment was obtained against Olinger.
- Trial court granted Dawson summary disposition; appellate court reverses and remands to enforce policy language permitting Farm Bureau defenses.
- Court emphasizes the policy is unambiguous and controls over collateral estoppel or jury verdicts without Farm Bureau’s consent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Farm Bureau is bound by the prior judgment without consent | Dawson | Farm Bureau not bound unless written consent | No; unambiguous policy excludes binding without consent |
| Whether collateral estoppel applies against Farm Bureau | Dawson | Policy permits defenses; no estoppel from prior action | No; policy controls and allows defenses by Farm Bureau |
| Whether summary disposition was proper given the contract language | Dawson | Policy controls; Farm Bureau must be allowed to defend | No; court erred in applying estoppel, must enforce contract as written |
Key Cases Cited
- Rory v Continental Ins Co, 473 Mich 457 (Michigan Supreme Court, 2005) (uninsured motorist coverage is contractual and not statutorily mandated)
- Mate v Wolverine Mut Ins Co, 233 Mich App 14 (Michigan Appellate Court, 1998) (interpretation of non-statutory insurance benefits governed by contract)
- Rohlman v Hawkeye-Security Ins Co, 442 Mich 520 (Michigan Supreme Court, 1993) (policy controls benefits not required by statute)
- Auto-Owners Ins Co v Martin, 284 Mich App 427 (Michigan Appellate Court, 2009) (contract interpretation applies to insurance provisions)
- Auto-Owners Ins Co v Leefers, 203 Mich App 5 (Michigan Appellate Court, 1993) (underinsured benefits are contractual, not statutory)