These cases are consolidated for purposes of appeal. In Docket No. 315891, Auto-Owners Insurance Company appeals by right the trial court’s declaratory ruling that the commercial general-liability policy (CGL) it issued to defendant Fraternal Order of Police Associates, Grosse Pointe Lodge 102 (FOPA) provided both dramshop and contractual-liability coverage for an incident in which an allegedly intoxicated person (AIP) murdered and severely injured several people. In Docket No. 315901, this Court granted the FOPA’s application for leave to appeal the trial court’s denial of its motion for summary disposition of the underlying dramshop action.
I. SUMMARY OF PERTINENT FACTS AND PROCEEDINGS
A. DOCKET NO. 315891
According to the testimony of Robert Estabrook, its treasurer and one of its incorporators, the FOPA is a nonprofit corporation organized for the purpose of supporting the police and various charities such as Special Olympics and other community charities. The FOPA also directly supports local police by doing things like buying GPS units for detectives’ cars and bulletproof vests for new officers. Its articles of incorporation as a domestic nonprofit corporation state that in addition to “inculcating] loyalty and allegiance” to the Constitution and the nation, the FOPA’s purpose is to “join together fraternally ... to promote and foster the impartial enforcement of law and order; to assist in all reasonable and ethical ways our parent lodge, Fraternal Order of Police, Grosse Pointe Lodge No. 102, in their endeavor to support and assist their members and family . . . .”
To raise money for its stated purposes, the FOPA would each year obtain a temporary license from the Liquor Control Commission to staff a beer tent at various community special events and, in particular, staff a beer tent at an annual three-day event known as the Detroit Hoedown (the Hoedown). It is undisputed that this event had been the FOPA’s main fundraiser for 20 years preceding the events of May 2010. CBS Radio and Live Nation Entertainment promoted the Hoedown, and concessions were run by a succession of event managers, ending in 2010 with Olympia. For the 2010 Hoedown, Olympia and the FOPA entered into a concession agreement. Twelve other civic groups also signed concession agreements as “sub-licensees” to staff beer tents at the Hoedown under the auspices of the FOPA’s special liquor license. Estabrook testified that Olympia recruited, trained, and supervised the other civic groups and that the FOPA was responsible for only one beer tent. The FOPA earned $8,010.19 from the 2010 Hoedown, representing an 8% commission on gross sales from the beer tent it staffed; gross beer sales at the entire event were $875,351.70. The other civic groups likewise received an 8% commission on gross sales from the beer tent the civic group staffed.
The concession agreement required the FOPA to obtain and certify to Olympia that it had obtained “(i) comprehensive general liability insurance . . . ; (ii) required worker’s compensation coverage; and (iii) host liquor liability insurance of not less than $500,000 for each occurrence.” Also, these insurance policies were to include Olympia, CBS Radio, Live Nation, the Hoedown, and the city of Detroit as additional named insured parties. The FOPA did not obtain liquor-liability insurance.
The concession agreement also contained an indemnification clause providing that “[irrespective of the amount of insurance provided, [the FOPA] shall be liable for and shall indemnify, defend and hold harmless [Olympia] . . . against and with
The issues presented in this appeal concern the application of two exclusions in the CGL policy that Auto-Owners issued to the FOPA. The “Tailored Protection Policy” identifies the insured on its face page as “FOP LODGE #102” and as a “Club” that is “Not For Profit.” The policy both excluded and provided coverage for liquor liability by providing the following in § 1(A)(2)(c) under “Exclusions”:
This Insurance does not apply to:
*
* *
c. Liquor Liability
“Bodily injury” or “property damage” for which any insured may be held liable by reason of:
(1) Causing or contributing to the intoxication of any person;
(2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or
(3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.
This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. [Emphasis added.]
The policy also both excluded and provided coverage for contractual liability by providing in § 1(A)(2)(b) under “Exclusions” that the insurance also did not apply to the following:
b. Contractual Liability
“Bodily injury” or “property damage” for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:
(1) Assumed in a contract or agreement that is an “insured contract”, provided the “bodily injury” or “property damage” occurs subsequent to the execution of the contract or agreement. However, if the insurance under this policy does not apply to the liability of the insured, it also does not apply to such liability assumed by the insured under an “insured contract”.
The meaning of “insured contract” pertinent to this case is found in § V(10) of the policy setting forth various definitions. The parties agree that it means:
That part of any other contract or agreement pertaining to your business .. . under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. [Emphasis added.] if it’s defined as purposeful activity, then the exclusion might apply.
At an April 1, 2013 hearing on the parties’ motions for summary disposition, the trial court ruled with respect to § 1(A)(2)(c) of the policy that the FOPA was not “in the business of. . . selling, serving or furnishing alcoholic beverages.” Therefore, the liquor-liability exclusion of the CGL policy did not apply. The trial court first noted that “business” was undefined and opined that
But if we look at other definitions in the business, where we talk about on — ongoing commercial activity to provide a livelihood to a person, in this case an organization, then it wouldn’t apply.
The trial court rejected Auto-Owners’ contention that if the FOPA is not in the business of selling alcohol, and the contract between the FOPA and Olympia concerned selling alcohol, then the concession agreement could not be an insured contract because it did not pertain to the FOPA’s business. The trial court ruled that the policy definition of “insured contract”— i.e., “pertaining to your business” — was broader than the language “in the business” as used in the liquor-liability exclusion. On this basis, the trial court ruled that the concession agreement pertained to the FOPA’s fundraising for its business of civic and charitable activities. Therefore, the contractual-liability exclusion of Auto-Owners’ CGL policy did not apply.
For these reasons, the trial court entered an order on April 17, 2013, denying Auto-Owners’ motion for summary disposition and granting summary disposition to the FOPA. This order required Auto-Owners to defend and indemnify the FOPA in the underlying dramshop action. On the basis of its ruling on the contractual-liability exclusion, the trial court also ordered that Auto-Owners defend and indemnify Olympia because the concession agreement between the FOPA and Olympia regarding the staffing of beer tents at the three-day Hoedown was an “insured contract.”
B. DOCKET NOS. 315901 AND 316511
Plaintiff Chad Seils (Seils) is the ex-husband of decedent Carrie Marie Seils and the father of their children, decedent Skyler Seils and Heavyn Seils.
On August 31, 2011, Seils, as personal representative of the estates of Carrie and Skyler and as next friend of Heavyn, sued the FOPA, Olympia, Pink, and Pink’s father, Richard Pink.
In relevant part, the amended complaint alleged that the FOPA was granted a special license by the Liquor Control Commission to serve intoxicating beverages at the festival, that the FOPA sold alcoholic beverages to Pink, who the FOPA knew or should have known was visibly intoxicated in violation of MCL 436.22,
In Docket No. 315901, the FOPA appeals by leave granted the trial court’s separate April 17, 2013 order denying its motion for summary disposition of Seils’s dramshop action on the basis that the actions of Pink in committing first-degree premeditated murder and assault with intent to murder were not reasonably foreseeable such that Seils could not establish the necessary element of proximate causation. The FOPA argued that under the undisputed facts, Pink’s actions were deliberate and premeditated and therefore not a foreseeable consequence of serving alcohol to a visibly intoxicated adult and that Pink’s specific intent severed any causal chain with respect to any improper serving of alcohol. Olympia filed a concurrence in this aspect of the FOPA’s motion below. The trial court ultimately denied the motion, relying on Weiss v Hodge (After Remand),
In Docket No. 316511, Olympia appeals by leave granted the trial court’s May 14,2013 order denying its motion for summary disposition with respect to Seils’s dramshop action. The parties argued this motion the same day as the FOPA’s motion. In addition to ruling that the issue of proximate cause presented a question of fact for trial, the trial court rejected Olympia’s arguments that it could not be held liable under the dramshop act because it was not the liquor licensee and because Seils had failed to provide it with written notice as required by MCL 436.1801(4).
II. DOCKET NO. 315891
A. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decision on a motion for summary disposition.
We also review de novo the interpretation of a contract and the legal effect of one of its clauses. Rory v Continental Ins Co,
A two-step analysis is used when interpreting an insurance policy: first, does the general insurance policy provide coverage for the occurrence, and second, if coverage exists, does an exclusion negate the coverage? Hunt v Drielick,
Auto-Owners argues that the trial court erred by ruling that the insurance policy’s liquor-liability exclusion did not apply on the facts of this case because the FOPA was “in the business of. . . selling, serving, or furnishing alcoholic beverages.” Furthermore, Auto-Owners contends that if the FOPA was not in the business of selling alcoholic beverages, for purposes of avoiding the liquor-liability exclusion, then the concession agreement cannot pertain to the FOPA’s business because it was totally about the sale of alcohol and, therefore, coverage for Olympia is excluded. We conclude that because the policy in this case did not exclude all coverage for liquor liability and contractual liability and because under the facts and circumstances of this case the exceptions to the exclusions arguably apply, the trial court did not err by strictly construing the exclusions at issue in favor of coverage. Churchman,
The Auto-Owners policy does not define the key word “business” or the critical phrases “in the business of’ and “pertaining to your business.” Consequently, when determining the plain and ordinary meaning of these words and phrases it is appropriate to consult a dictionary. Safety King,
In Random House Webster’s College Dictionary (1992), “business” is defined as
1. an occupation, profession, or trade. 2. the purchase and sale of goods in an attempt to make a profit. 3. a person, partnership, or corporation engaged in commerce, manufacturing, or a service. 4. volume of trade; patronage or custom. 5. a store, office, factory, etc., where commerce is carried on. 6. that with which a person is principally and seriously concerned: Words are a writer’s business.
The American Heritage Dictionary, Second College Edition (1985), similarly defines the word “business” as
1. a. The occupation, work, or trade in which a person is engaged: in the wholesale food business, b. A specific occupation or pursuit: really knew her business. 2. Commercial, industrial, or professional dealings: new systems now being used in business. 3. A commercial enterprise or establishment: bought his uncle’s business.
And Black’s Law Dictionary (10th ed) defines “business” as
1. A commercial enterprise carried on for profit; a particular occupation or employment habitually engaged in for livelihood or gain.... 2. Commercial enterprises <business and academia often have congruent aims>. 3. Commercial transactions <the company has never done business in Louisiana>.
While these dictionary definitions support Auto-Owners’ argument that “business”
But even in cases in which the liquor-liability exclusion applied when an organization was engaged in the business of selling or serving alcoholic beverages, courts have read the word “business” as limiting its application. One court noted that if the insurance company had “clearly intended to exclude coverage for any activity involving the sale or serving of liquor, clear language to that effect could have been employed, and any reference to ‘business’ would have been unnecessary.” Schenectady Co v Travelers Ins Co,
Other courts interpreting the same language as that at issue in this case have similarly found pertinent whether the nonprofit group engaged in alcohol sales on a continuous, ongoing basis. So when a group regularly operates a bar selling alcohol to members and the public, courts have held that the exception to a liquor-liability exclusion did not apply because the insured was “in the business of. . . selling, serving or furnishing alcoholic beverages.” In
A case from another jurisdiction with facts most similar to the facts of the instant case, and that construes the same policy language, is Mut Serv Cas Ins Co v Wilson Twp,
Because the insurance policy in this case was sold to a nonprofit group whose primary purpose and activities were charitable and civic but which also engaged in limited annual fundraising through alcohol sales permitted under a temporary license, we conclude that the trial court did not err by ruling that the FOPA was not “in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages.” Consequently, the trial court did not abuse its discretion by ruling that the exception to the liquor-liability exclusion applied and that the policy provided coverage for Seils’s dramshop action. Our conclusion is buttressed by the principle that insurance policy exclusions must be strictly construed against the insurer
We also conclude that the trial court properly rejected Auto-Owners’ argument that the term “business” must be construed consistently throughout the contract. Rather, the word “business” must be construed in context and read in light of the contract as a whole. See Churchman,
Thus, the trial court correctly ruled that the FOPA was not “in the business of’ selling alcoholic beverages as stated in the exception to the liquor-liability exclusion. But at the same time, the concession agreement “pertained” or related to the FOPA’s business because it related to the FOPA’s fundraising activities for its “business” of civic and charitable activities. So, in this context, the word “business” can fairly be read as “occupation, profession, or trade,” Random House Webster’s College Dictionary (1992), or “specific occupation or pursuit,” The American Heritage Dictionary, Second College Edition (1985). Fundraising was necessary for the FOPA’s “business” or “pursuit” of charitable and civic activities, and the concession agreement clearly related to or pertained to the FOPA’s “business” or “pursuit” of charitable and civic activities. Thus, the trial court correctly ruled that the exception to the contractual-liability exclusion applied because the concession agreement “pertain [ed] to [the FOPA’s] business.”
Moreover, as with the liquor-liability exclusion, the contractual-liability exclusion must be strictly construed against the insurer and in favor of coverage. Churchman,
III. DOCKET NOS. 315901 AND 316511: PROXIMATE CAUSE
A. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decision on a motion for summary disposition. West v Gen Motors Corp,
The trial court in deciding the motion must view the substantively admissible evidence submitted up to the time of the motion in a light most favorable to the party opposing the motion. Maiden v Rozwood,
B. ANALYSIS
For Seils to establish his dramshop action he must show that the FOPA violated MCL 436.1801(2) by selling, furnishing, or giving alcohol to Pink while he was visibly intoxicated and that this statutory violation was “a proximate cause of [Seils’s] damage, injury, or death,” MCL 436.1801(3). Because Seils points to no evidence from which the FOPA could have reasonably foreseen Pink’s intentional criminal acts and because Pink’s decision to commit premeditated, deliberate murder (and other assaults) was an intervening or superseding cause of Seils’s damages, the trial court erred by not granting summary disposition to the FOPA and Olympia on the basis that no reasonable jury could find that the FOPA’s alleged statutory violation was a proximate cause of the injury that Seils alleged. See Nichols v Dobler,
MCL 436.1801(3) “imposes liability on any licensee that, by the unlawful sale or furnishing of alcoholic liquor to a minor or visibly intoxicated person, has ‘caused or contributed’ to the intoxication that is a proximate cause of damage, injury, or death.” Hashem v Les Stanford Oldsmobile, Inc,
In Weiss, this Court addressed the issue of whether a liquor licensee may be held liable in tort for an AIP’s intentional physical attack on another patron, which occurred in the parking lot of the bar where the AIP had been served alcohol until 2:00 a.m. The jury found that the defendant’s bartender furnished alcoholic liquor to the AIP while he was visibly intoxicated and that the furnishing of liquor to the AIP was a proximate cause of the plaintiffs injuries. On appeal, the defendant bar owner argued that while the statute contemplated liability for negligent torts, it did not create liability for intentional torts. Id. at 623-625. This Court analyzed the predecessor of MCL 436.1801, MCL 436.22, and noted that the statute required the sale of alcohol to be a proximate cause of the resulting injury, but did “not limit liability only to negligently
Proximate cause is “ ‘that which in a natural and continuous sequence, unbroken by any new, independent cause, produces the injury, without which such injury would not have occurred . . . .’ ” McMillian v Vliet,
As noted in the McMillian definition of “proximate cause,” the chain of causation between the defendant’s conduct and the plaintiffs injuries may be broken by an intervening or a superseding cause. An “intervening cause” is “ ‘one which actively operates in producing harm to another after the actor’s negligent act or omission has been committed.’ ” McMillian,
The FOPA argues, citing Graves v Warner Bros,
Graves is relevant to the instant case because both the question of duty and proximate cause “ ‘depend in part on foreseeability.’ ” Babula v Robertson,
Babula, in which the defendant husband, Brian Robertson, molested the child of the defendant wife’s sister while the defendant wife, Janice Robertson, was babysitting the child, is also instructive. Babula,
On the other hand, Michigan has “long recognized that criminal acts by third parties can be foreseeable.” Dawe v Dr Reuven Bar-Levav & Assoc, PC (On Remand),
Our conclusion that Seils has failed to present evidence to establish proximate cause is supported by caselaw from other states that the FOPA and Olympia cite regarding whether a dramshop violation could be a proximate cause of the subsequent violent criminal act of an intoxicated person. See Fast Eddie’s v Hall,
IV. OTHER ISSUES IN DOCKET NO. 316511
Although Olympia’s remaining issues could be considered moot
A. DRAMSHOP VICARIOUS LIABILITY
Olympia argues that the dramshop act is a remedial statute, requiring that it be strictly construed. The act imposes duties on a “retail licensee” who is the “person” subject to liability under the act. MCL 436.1801(2) and (3); Guitar v Bieniek,
In rejecting Olympia’s argument on this issue, the trial court relied on Kerry v Turnage,
The dramshop act does not permit imposition of liability on a third party under a common-law theory of vicarious liability that the third party is the principal and the liquor licensee the agent. Under the dramshop act, the only vicarious liability that exists is for liability flowing upward to the “retail licensee” from its “clerk, agent, or servant” who actually sells, furnishes, or gives “alcoholic liquor to a person who is visibly intoxicated.” MCL 436.1801(2). Nothing may be read into a
Moreover, statutes in derogation of the common law are narrowly construed. Rusinek v Schultz, Snyder & Steele Lumber Co,
Consequently, we conclude that because Olympia was not the liquor licensee in this case, this argument provides an alternative basis for reversing the trial court and remanding for entry of an order granting summary disposition to Olympia regarding Seils’s dramshop claim.
B. STATUTORY NOTICE
As a second alternative basis for reversing the trial court, Olympia argues that Seils failed to give Olympia timely written notice of its intent to seek damages under the dramshop act as required by MCL 436.1801(4). We agree. This issue also presents a question of statutory interpretation, which is reviewed de novo. Niles Twp,
MCL 436.1801(4) provides:
An action under this section shall be instituted within 2 years after the injury or death. A plaintiff seeking damages under this section shall give written notice to all defendants within 120 days after entering an attorney-client relationship for the purpose of pursuing a claim under this section. Failure to give written notice within the time specified shall be grounds for dismissal of a claim as to any defendants that did not receive that notice unless sufficient information for determining that a retail licensee might be liable under this section was not known and could not reasonably have been known within the 120 days. [Emphasis added.]
The pertinent facts underlying this argument are as follows. On April 11, 2011, Seils entered a contingent-fee agreement with attorney Peter J. Parks to pursue claims for damages against responsible parties concerning the events occurring on or about May 14, 2010. On May 25, 2011, Parks sent Freedom of Information Act requests to the Liquor Control Commission and the city of Detroit requesting information related to the alcoholic beverage concession at the 2010 Hoedown. Parks at some point obtained a copy of the concession agreement between Olympia
On June 17, 2011, Parks sent a letter to Robert Estabrook of the FOPA, which stated that he intended to pursue a dramshop claim against the FOPA. The letter stated that it was Seils’s position that Pink “was clearly visibly intoxicated prior to being furnished intoxicants (beer) by vendors operating under the temporary liquor license issued to the [FOPA] contrary to law.” The letter asserted claims of liability under MCL 436.1801 and stated that the letter was intended to afford the FOPA formal notice under the act of Seils’s claims.
On August 9, 2011, Parks sent a letter to Robert Stefanski of Olympia that contained a “courtesy copy” of the letter Parks sent to the FOPA. Parks’s letter to Stefanski stated that Parks had not received a reply from the FOPA or its insurance carrier; the letter did not assert a claim under MCL 436.1801 against Olympia. Also, on August 9, 2011, Parks sent to the Clinton Township Police Department and the Roseville Police Department letters identical in content to that sent to Olympia. The trial court ruled that the August 9, 2011 letter to Stefanski, which contained a “courtesy copy” of the notice sent to the FOPA, was sufficient notice to Olympia of Seils’s dramshop claim against Olympia.
We conclude that the August 9, 2011 letter Parks sent to Stefanski was by its plain terms merely a “courtesy copy” notice of Seils’s intent to pursue a dramshop claim against the FOPA. It cannot, by its plain terms, be read as a notice of a dramshop claim against Olympia. The statute clearly and unambiguously requires written notice to “all defendants,” and “any defendants” not timely noticed may move for dismissal. MCL 436.1801(4). Because of this clear language, Seils’s agency argument is without merit.
While the statute does not specify what the notice must contain, read in context with the first sentence regarding when “[a]n action” must be brought, it is patent that the written notice must, at a minimum, provide notice to the defendant of the plaintiffs intent to pursue “[a]n action” under the dramshop act against the notified defendant. Parks’s August 9, 2011 letter did not do so with respect to Olympia. A plaintiffs “[failure to give written notice within the time specified shall be grounds for dismissal of a claim as to any defendants that did not receive [the] notice” required by MCL 436.1801(4). To the extent the trial court relied on a finding that Olympia did not show that it had suffered any prejudice, we must conclude that the trial court also erred. See Chambers v Midland Country Club,
We therefore conclude that Seils’s failure to give Olympia the timely written notice required by MCL 436.1801(4) provides another alternative basis for reversing the trial court’s denial of Olympia’s motion for summary disposition, and we remand for entry of an order granting summary disposition to Olympia regarding Seils’s dramshop claim.
V. CONCLUSION
For the reasons discussed in this opinion, we affirm the trial court in Docket No. 315891, but in Docket No. 315901 and
Notes
At the time, Skyler was three, and Heavyn was five years old.
People v Pink, unpublished opinion per curiam of the Court of Appeals, issued August 28, 2012 (Docket No. 304909).
The register of actions indicates that the trial court dismissed Richard Pink on June 28, 2013.
MCL 436.22 was the predecessor of the current applicable statute, MCL 436.1801, which has been in effect since April 14, 1998. MCL 436.1801 is commonly referred to as the dramshop act.
Cases from other jurisdictions are not binding precedent, but we may consider them to the extent this Court finds their legal reasoning persuasive. Hiner v Mojica,
Cf. Cormier v Travelers Ins Co, 618 So 2d 1185, 1187 (La App, 1993) (opining on an exception to a liquor-liability exclusion identically worded to that in the present case and stating that “[t]he obvious purpose of the phrase ‘in the business of is to describe the nature of the activity engaged in and has nothing to do with the specific purpose for which the activity is pursued or the nature of the person or entity engaged in the activity”).
“Obiter dicta are not binding precedent. Instead, they are statements that are unnecessary to determine the case at hand and, thus, ‘lack the force of an adjudication.’ ” People v Peltola,
An issue is moot when a judgment, if entered, cannot have any practical legal effect on the existing controversy. People v Richmond,