Hastings Mutual Insurance Company v. Grange Insurance Company
333193
| Mich. Ct. App. | May 16, 2017Background
- Fire on April 15, 2014 destroyed a barn owned by Williams Farms, LLC; barn used for farm operations and by a salaried employee, Ryan Keath, who was repairing his sister’s vehicle when fire started.
- Hastings Mutual insured Williams Farms’ property and paid $699,134; sued Grange (no-fault insurer of the vehicle) as subrogee seeking property protection benefits reimbursement.
- Grange denied Hastings’ claim, invoking MCL 500.3121(1)’s exception for damage occurring "within the course of a business of repairing, servicing, or otherwise maintaining motor vehicles." Hastings sued; both parties moved for summary disposition.
- Trial court granted summary disposition to Hastings, holding Williams Farms was not in the business of repairing vehicles and thus Grange remained liable; denied Grange’s motion.
- Hastings then sought attorney fees under MCL 500.3148(1) for Grange’s allegedly unreasonable denial; trial court denied fees, finding Grange reasonably relied on a statutory construction argument.
- On appeal, this Court affirmed: (1) Williams Farms is not a vehicle-repair business so MCL 500.3121(1) exclusion does not apply; (2) denial of attorney fees affirmed because Grange had a legitimate question of statutory construction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MCL 500.3121(1) excludes no-fault liability for property damage at Williams Farms | Hastings: farm not in business of vehicle repair; exception inapplicable | Grange: farm’s in-house repairs fall within "course of a business of repairing..." thus exclusion applies | Court: Williams Farms is a farming enterprise, not a vehicle-repair business; exclusion does not apply (Hastings wins) |
| Whether summary disposition was appropriate | Hastings: undisputed facts; no genuine issue of material fact | Grange: material factual dispute whether activity was within course of a repair business | Court: de novo review; record shows no repair-business indicators (customers, fixed pricing, income) — summary disposition for Hastings proper |
| Entitlement to attorney fees under MCL 500.3148(1) | Hastings: Grange unreasonably refused to pay, so fees warranted | Grange: denial reasonable based on statutory interpretation and counsel opinions | Court: Denial affirmed — insurer had legitimate question of statutory construction; refusal not unreasonable |
| Whether Hastings (as subrogee) can recover fees | Hastings: entitled as claimant who recovered benefits | Grange: contended subrogee cannot recover fees as matter of law | Court: did not reach this issue given holding on reasonableness; parties did not fully prevail so no taxable costs awarded |
Key Cases Cited
- Johnson v. Recca, 492 Mich. 169 (Supreme Court of Michigan) (standards for de novo review of statutory construction)
- Pioneer State Mut. Ins. Co. v. Dells, 301 Mich. App. 368 (Court of Appeals of Michigan) (summary disposition standards under MCR 2.116(C)(10))
- Whitman v. City of Burton, 493 Mich. 303 (Supreme Court of Michigan) (rules of statutory interpretation)
- Terrien v. Zwit, 467 Mich. 56 (Supreme Court of Michigan) (definition of "business")
- Allied Prop. & Cas. Ins. Co. v. Pioneer State Mut. Ins. Co., 272 Mich. App. 444 (Court of Appeals of Michigan) (application of MCL 500.3121(1) to vehicle-repair businesses)
- Ross v. Auto Club Group, 481 Mich. 1 (Supreme Court of Michigan) (standard for reviewing reasonableness under MCL 500.3148(1))
- Attard v. Citizens Ins. Co. of Am., 237 Mich. App. 311 (Court of Appeals of Michigan) (insurer delay not unreasonable when based on legitimate statutory-construction question)
- Moore v. Secura Ins., 482 Mich. 507 (Supreme Court of Michigan) (insurer may reasonably delay payment even if ultimately liable)