Stone v. Auto-Owners Insurance
307 Mich. App. 169
| Mich. Ct. App. | 2014Background
- Stephanie Stone died in a 2010 car accident while driving a 2002 Ford Taurus she owned and registered; she and her widower (plaintiff) were listed as drivers on an Auto-Owners policy but were not named insureds.
- In August 2010, John and Linda Stone (Stephanie’s parents) added the Taurus to their existing Auto-Owners no-fault policy; the policy continued to list only “John & Linda Stone” as the insureds.
- Linda arranged the addition through an independent agent (Morris W. Smith), told the agent Stephanie owned the car and did not live with her parents, and paid the premium; Auto-Owners accepted the payment and issued the policy listing only John & Linda as insureds.
- Plaintiff sued Auto-Owners seeking survivors’ loss benefits under the no-fault act (MCL 500.3101 et seq.), arguing coverage either as an owner/registrant/operator under MCL 500.3114(4) or on other equitable/reformation grounds.
- The trial court denied Auto-Owners’ motion for summary disposition; the Court of Appeals (on remand from the Supreme Court) vacated that order and directed entry of judgment for Auto-Owners.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff (surviving husband) is entitled to PIP survivors’ benefits under MCL 500.3114(1) | Stone: Stephanie is covered as a person named in the policy because she was listed as a driver and premiums were paid | Auto-Owners: Only the named insureds (“John & Linda Stone”) are persons named in the policy; drivers are not named insureds | Held: No — §3114(1) applies only to the person named in the policy (named insured); Stephanie was not a named insured, so §3114(1) does not apply |
| Whether Auto-Owners was the “insurer” of Stephanie under MCL 500.3114(4) (priority to insurer of owner/registrant/operator) | Stone: Stephanie was owner/registrant/operator of the Taurus, and Auto-Owners insured that vehicle, so Auto-Owners is liable under the owner/registrant/operator priority | Auto-Owners: The policy names only John & Linda; it does not expand the definition of “insured” to include Stephanie, so Auto-Owners is not Stephanie’s insurer for §3114(4) purposes | Held: No — a named insured’s insurer is an insurer of owner/operator only when the policy’s language extends coverage beyond the named insured; here it does not |
| Whether equitable doctrines (estoppel) or reformation permit recovery despite policy language | Stone: Linda’s request for a new policy in Stephanie’s name, payment of premium, and agent’s representations justify estoppel or reformation | Auto-Owners: No representations were made by Auto-Owners to Stephanie or plaintiff; the agent was the insured’s agent; plaintiff did not plead estoppel or reformation below | Held: No — equitable estoppel fails because defendant made no representations to plaintiff/Stephanie and the agent was agent of the insured; plaintiff did not seek reformation or allege latent ambiguity |
| Whether defendant’s summary-disposition motion should have been granted | Stone: Factual disputes (who thought what about policy) justified denying summary disposition | Auto-Owners: Unambiguous policy language and controlling precedent entitle defendant to judgment as a matter of law | Held: Granted — no genuine issue of material fact on legal entitlement; judgment for Auto-Owners warranted |
Key Cases Cited
- Belcher v. Aetna Cas. & Sur. Co., 409 Mich 231 (discussion of entitlement and priority under MCL 500.3114 and 500.3115)
- Wilkie v. Auto-Owners Ins. Co., 469 Mich 41 (policy enforcement and reasonable expectations doctrine)
- Koontz v. Ameritech Servs., Inc., 466 Mich 304 (statutory interpretation principles)
- Rory v. Continental Ins. Co., 473 Mich 457 (enforce unambiguous contracts as written)
- Dobbelaere v. Auto-Owners Ins. Co., 275 Mich App 527 (insurer status under §3114(4) depends on policy language expanding “insured”)
- Amerisure Ins. Co. v. Auto-Owners Ins. Co., 262 Mich App 10 (named insured’s insurer not an insurer of owner/operator absent expanded insured definition)
- Coleman v. Amerisure Ins. Co., 274 Mich App 432 (policy language can make insurer an insurer of family/others when insured definition is broad)
- Transamerica Ins. Corp. of Am. v. Hastings Mut. Ins. Co., 185 Mich App 249 (drivers listed on policy are not persons named in the policy)