Thomas Luczak v. Corey a Drielick, 322 Mich. App. 318

Background

On Jan 12, 1996 a Drielick Trucking semi‑tractor (bobtail, no trailer) was involved in a multivehicle accident that killed Eugene Hunt and injured others. Plaintiffs later obtained consent judgments against Roger and Corey Drielick and Drielick Trucking.
Empire Fire & Marine issued a "non‑trucking" (bobtail) policy to Drielick Trucking and denied coverage, citing a business‑use exclusion (including a leasing clause) and a named‑driver exclusion.
Plaintiffs assigned Drielick Trucking’s insurance claims to themselves and pursued garnishment against Empire; consent judgments were entered on March 14, 2000 for specified sums plus "statutory interest from the date of the filing of the Complaint."
The Michigan Supreme Court remanded to the trial court to determine whether a lease as contemplated by the policy’s leasing clause existed between Drielick Trucking and Great Lakes Carriers (GLC) at the time of the accident.
On remand the trial court found no lease as contemplated by the policy and held Empire liable under the policy; it also awarded prejudgment and postjudgment statutory interest through the date of the garnishment judgments.
The Court of Appeals affirmed coverage (leasing clause did not apply), held Empire must pay prejudgment interest on the policy limit from complaint filing through the consent judgments, but vacated the award of postjudgment interest because Empire did not defend the underlying suits and the policy limits postjudgment interest to suits the insurer defends.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the leasing clause of the business‑use exclusion bar coverage?	Lease did not exist; bobtail use not excluded under leasing clause.	An ongoing oral exclusive lease to GLC existed, so exclusion applies.	No lease as contemplated by the policy existed at accident time; leasing clause does not bar coverage.
What is the insurer’s liability for prejudgment interest?	Empire must pay statutory prejudgment interest (MCL 600.6013) on policy limits from complaint filing to entry of consent judgments.	Policy’s supplementary‑payments clause does not require prejudgment interest beyond policy limits.	Empire must pay prejudgment interest calculated on the policy limits from complaint filing through the date of the consent judgments.
Is Empire liable for postjudgment interest on the full judgments?	Plaintiffs sought statutory postjudgment interest through garnishment judgment date.	Policy expressly limits payment of postjudgment interest to suits the insurer defends.	Empire is not liable for postjudgment interest because it did not defend and the policy conditions payment of postjudgment interest on defending the suit.
Was it proper for trial court to find Empire breached duty to defend and award postjudgment interest on that basis?	Trial court held breach negated policy limitation and awarded postjudgment interest.	No breach claim was pled or litigated; garnishment proceedings did not adjudicate duty to defend.	Trial court erred to decide breach in garnishment posture; plaintiffs did not litigate a direct breach‑of‑defense claim, so postjudgment interest award was improper.

Key Cases Cited

Hunt v. Drielick, 496 Mich 366 (Michigan Supreme Court) (remanded for factual findings on whether a lease existed as contemplated by the policy’s leasing clause)
Matich v. Modern Research Corp., 430 Mich 1 (Michigan Supreme Court) (insurer with standard interest clause pays prejudgment interest calculated on policy limits)
Auto–Owners Ins. Co. v. Churchman, 440 Mich 560 (Michigan Supreme Court) (insurance contracts interpreted like other contracts; exclusions strictly construed)
Heniser v. Frankenmuth Mut. Ins. Co., 449 Mich 155 (Michigan Supreme Court) (two‑step analysis: coverage then exclusions)
Fresard v. Mich. Millers Mut. Ins. Co., 414 Mich 686 (Michigan Supreme Court) (insurer bears burden to prove absence of coverage)
Group Ins. Co. of Mich. v. Czopek, 440 Mich 590 (Michigan Supreme Court) (clear, specific exclusions must be enforced)
Auto–Owners Ins. Co. v. Harvey, 219 Mich App 466 (Michigan Court of Appeals) (clear and unambiguous policy language is enforced)
Cochran v. Auto Club Ins. Ass’n, 169 Mich App 199 (Michigan Court of Appeals) (application of Matich principles to insurer’s interest obligations)