Lead Opinion
Wе granted leave to appeal in this case to review the Court of Appeals first impression construction of the phrase “in the care of” in a homeowner’s insurance policy. The Court of Appeals determined that the phrase was ambiguous and that there was no genuine issue of material fact that Dawn Mysierowicz, plaintiff’s assignor, came within the definition of an insured
BACKGROUND FACTS AND PROCEEDINGS BELOW
In early 1993, Mysierowicz’ mother was in the process of divorcing her father and was unable to provide a home for her. Bonnie Twitchell, the mother of Mysierowicz’ boyfriend Travis Twitchell, agreed that Mysierowicz could stay at the Twitchell home on a
The lawsuit was tendered to State Farm Fire and Casualty Company. State Fаrm assumed a defense for Travis Twitchell, but declined to provide a defense for Mysierowicz on the basis that she was not an “insured” within the meaning of the insurance policy. Plaintiff obtained a default judgment for $75,000 against Mysierowicz. In consideration of a promise by Henderson not to proceed against her personal assets, Mysierowicz assigned all rights, benefits and claims she had against State Farm to Henderson.
Henderson subsequently filed a complaint, as Mysierowicz’ assignee, against State Farm alleging that it had breached its obligations when it did not defend and provide coverage to Mysierowicz under the Twitchell homeowner’s policy. Plаintiff alleged that he was entitled to a judgment of $75,000 against defendant. State Farm filed an answer denying liability on the basis that Mysierowicz was not an “insured” as the term was defined in the insurance policy.
After depositions of Mysierowicz and the Twitchells were taken, plaintiff filed a motion for summary disposition under MCR 2.116(C)(9) (failure to state a
The trial court denied plaintiffs motion and granted defendant’s motion. The court explained:
This Court finds that Dawn Mysierowicz was at the age of 18, [a] legal adult suffering from no physical or mental disabilities. She resided with the Twitchelfls] and was not under the[ir] control, guidance, supervision, management or custody. As such it is clear to this Court that State Farm’s policy of insurance did not provide coverage to her because she was not, “In the care of,” the insureds. Thus, this Court finds no genuine issue as to any material fact.
Plaintiff filed a claim of appeal. After consulting dictionary definitions of the word “care” and some out-of-state cases, the Court of Appeals determined that “care” had many meanings and thus the phrase “in the care of” was ambiguous because it could also reasonably be understood to have different meanings. The Court ultimately reversed the order granting summary disposition for defendant and further found that there was no genuine issue of material fact that Mysierowicz came within the definition of “insured” because she was “in the care of” Bonnie Twitchell, the named insured under defendant’s homeowner’s policy.
STANDARD OF REVIEW
We review the grant or denial of a motion for summary disposition de novo. Groncki v Detroit Edison Co,
PRINCIPLES UTILIZED IN INTERPRETING INSURANCE CONTRACTS
Initially, in reviewing an insurance policy dispute we must look to the language of the insurance policy and interpret the terms therein in accordance with Michigan’s well-established principles of contract con
First, an insurance contract must be enforced in accordance with its terms. Upjohn Co v New Hampshire Ins Co,
While we construe the contract in favor of the insured if an ambiguity is found, Auto Club Ins Ass’n v DeLaGarza,
The Court of Appeals erred in concluding that the phrase “in the care of” was ambiguous. It is not.
An example of a court recognizing that parsing phrases word by word may lead to an inaccurate interpretation is informative. In Nat'l Security Archive v United States Dep’t of Defense, 279 US App DC 308, 310; 880 F2d 1381 (1989), the United States Cоurt of Appeals for the District of Columbia, in analyzing the phrase “educational institution,” stated:
It is often the case that words, used in conjunction, convey a meaning different from that which they would bear if interpreted separately.[5 ]
The tools available to a court in seeking to establish the meaning of such phrases include common understandings of which the court can take notice, as well as other sources such as specialized dictionaries
While the meaning of the phrase “in the care of” is not ambiguous,
THE GENERAL MEANING OF THE PHRASE
Given that the contract does not define the phrase “in the care of,” and because interpretation of an insurance contract is a question of law, it falls to us to provide some guidance regarding the meaning of the phrase. In our view, the following nonexclusive common-sense factors are relevant for the factfinder to consider in answering when someone is “in the care of” someone else:
(1) is there a legal responsibility to care for the person;
(2) is there some form of dependency;
(3) is there a supervisory or disciplinary responsibility;
(4) is the person providing the care providing substantial essential financial support;
(5) is the living arrangement temporary or permanent, including how long it has been in existence and is expected to continue;
(6) what is the age of the person alleged to bе “in the care of” another (generally, the younger a person the more likely they are to be “in the care” of another);
(7) what is the physical or mental health status of the person alleged to be “in the care of” another (a person with health problems is more likely to be “in the care” of another); and
(8) is the person allegedly “in the care of” another gainfully employed (a person so employed is less likely to be truly dependent on another)?
The Court of Appeals relied on deposition testimony establishing the following in concluding there was no genuine issue of material fact that Mysierowicz was “in the cаre of” Bonnie Twitchell: (1) Mysierowicz paid no rent and contributed nothing in terms of the monthly mortgage payments, property taxes and utilities; (2) Mrs. Twitchell performed all household chores including meals when she was home; (3) Travis hoped that everyone regarded Mysierowicz as a member of the family and considered the three of them to be living as one family unit;
FACTS OF RECORD SUGGESTING MYSIEROWICZ WAS NOT “IN THE CARE” OF BONNIE TWITCHELL
The Court of Appeals reached its conclusion that there was no genuine issue of material fact that Mysierowicz was “in the care of” Mrs. Twitchell, while acknоwledging: (1) Mysierowicz was eighteen years old; (2) the living arrangement was temporary;
Those factors cited by the Court of Appeals in support of its ruling, which are supported by the record, would allow a reasonable factfinder to conclude that Mysierowicz was “in the care of” Mrs. Twitchell at the time Henderson was stabbed. However, the eight other factors cited immediately above would similarly allow a reasonable factfinder to conclude that Mysierowicz was not “in the care of” Mrs. Twitchell at the time of the stabbing.
In our judgment, both the trial court and the Court of Appeals erred. The trial court should not have granted summary disposition to defendant because there was deposition testimony from which a reasonable person could conclude that Mysierowicz was “in the care of” Mrs. Twitchell at the time of the stabbing. The Court of Appeals likewise erred in concluding as a matter of law that Mysierowicz was “in the care of”
conclusion
Each side cited deposition testimony supporting its position. Viewing all the facts in the light most favorable to plaintiff forecloses a ruling, as a matter of law, that Mysierоwicz was not “in the care of” Mrs. Twitchell. Similarly, viewing all the facts in a light most favorable to defendant forecloses a ruling as a matter of law that Mysierowicz was “in the care of” Mrs. Twitchell. We are satisfied that a question of fact clearly exists in this case that can only be resolved by a trier of fact. Neither party is entitled to judgment as a matter of law under MCR 2.116(C)(10).
Reversed and remanded for further proceedings.
Notes
The insurance policy contained the following definition of the word “insured”:
4. “insured” means you and, if residents of your household: a. your relatives; and b. any other person under the age of 21 who is in the care of a person described above. [Emphasis added.]
Travis Twitchell was twenty years old and Mysierowicz was eighteen years old.
We reject Justice Kelly’s claim that the phrase is ambiguous because both parties attach materially different meanings to the phrase and advocate different applications of the phrase. The fact that each party is advocating a definition that supports its desired outcome in a case of first impression does not make a phrase ambiguous. If this were the test, all terms and phrases would be rendered ambiguous.
The major flaw in the Court of Appeals approach, as will be discussed below, was failing to deal with the disputed phrase as a phrase.
Furthermore, evеn when one engages in a word-by-word analysis, such as the Court of Appeals did here, the mere fact that various dictionaries define the word “care” differently does not make the word “care” ambiguous. To so hold would make virtually any word ambiguous, thus derailing proper interpretation where word by word explication is called for. See our discussion of the proper understanding of the word “of” in Horace v City of Pontiac,
To nail down the point, the court wryly gave the phrase “monkey business” as an example of a phrase that had a different meaning than the sum of its constituent parts. Id. at 310-311, n 4.
The Legislature since 1990 has required basic insurance policies to be written in рlain English. MCL 500.2236; MSA 24.12236. The legal profession has also taken a strong interest in having documents written in plain English. For example, the Michigan Bar Journal regularly publishes articles encouraging, and even giving awards regarding, the use of plain English in contracts, pleadings, and the like. Indeed, the Plain English Committee even has its own Web site. See www.michbar.org/committees/penglish/pengcom.html.
As stated in 2 Couch, Insurance, 3d, § 21:5, p 21-9:
The trend in the insurance industry is toward drafting policies using “plain English.” As a result, many of the words and phrases that have created difficulty in interpretation and have required judicial intervention have been deleted or redefined, leaving the courts with new words and phrases to interpret.
For example, a glossary of idiomatic expressions could in a given case help one understand such sports metaphors as: (1) a “hail Mary pass,” (2) a “hat trick,” (3) “down for the count,” or (4) even the venerable “home run.”
For example, if a legal phrase of art such as “equitable remedies” is found in a contract, the phrase would be interpreted in accord with common-law understandings and case-law explanations that those familiar with such terms of art are held to understand.
See, e.g., Horace Mann Ins v Stark,
Contrary to the dissent, Travis Twitchell’s subjective hope is not evidence that Mysierowicz was “in the care of’ Mrs. Twitchell.
However, Mrs. Twitchell denied being responsible for Mysierowicz “in any way.”
Mysierowicz testified that she was not capable of completely supporting herself without assistance.
However, Mysierowicz was working full-time and paid the majority of her own living expenses. Hence, the record does not corroborate the dissent’s reference to this unsupported assertion.
It is axiomatic that the trial court must give the benefit of all reasonable doubt tо the nonmoving party when considering the motion. SSC Associates Ltd Partnership v Detroit General Retirement System,
None of the out-of-state cases cited by the dissent persuade us that plaintiff is entitled to judgment as a matter of law.
Dissenting Opinion
I respectfully dissent from the majority’s holding that the phrase “in the care of” is unambiguous. I dissent, also, from the remand for a jury determination of whether Dawn Mysierowicz was “in the care of” Mrs. Twitchell.
I would hold that the phrase is ambiguous, and as such, the contract provision should be construed against the defendant, as its drafter. Plaintiff is entitled to judgment as a matter of law under MCR 2.116(C)(10) because there was no genuine issue of
We review both the grant or denial of a motion for summary disposition and the interpretation of an insurance contract de novo. Groncki v Detroit Edison Co,
Concomitant to the rules of construction is the rule of reasonable expectation. It states that a court examines whether a policyholder was led to а reasonable expectation of coverage for the loss in question upon reading the contract. Vanguard Ins Co v Clarke,
In this case of first impression, the majority concludes that the phrase “in the care of” is unambiguous. The phrase is ambiguous, not because various dictionaries define the word “care” differently, but because both parties attached materially different meanings to the phrase. See Allstate Ins Co v Fick,
The words in an insurance policy are generally considered to be ambiguous when they may be reasonably understood in different ways. Fick, supra at 203. The defendant advocates a narrow construction, that is, the phrase should be construed tо mean “legal care,” such as a nurse would render to a patient. The plaintiff construes the phrase much more broadly and would not limit its definition to such a narrow construction.
The majority states that “in the care of” was misinterpreted by the Court of Appeals because it was parsed, rather than being treated as an idiom or colloquialism. “In the care of” is not a colloquial or idiomatic phrase. It cannot be analogized to a phrase like “monkey business.” There is only one noun used in the expression “in the care of,” whereas, in “monkey business,” two nouns used together obliterate the meaning of each and form a whоle new meaning.
I agree, as the majority recites, that a term is not rendered ambiguous merely because its meaning varies with changed circumstances. Also, a term is not ambiguous because it is difficult to apply to certain factual situаtions. However, in either instance, the likelihood of ambiguity is greatly enhanced.
A fair reading of some insurance policy language leads one to understand that there is coverage under a particular set of circumstances. Another fair reading of the same language may lead another to understand that there is no coverage. Under those circumstances, the contract is ambiguous and should be construed against the drafter in favor of coverage. Michigan Mut Ins Co v Dowell,
In this case, defendant reads “in the care of” to connote only support, supervision, charge, custody, and responsibility. Courts in other jurisdictions have interpreted the phrase “in the care of” as used in homeowners’ insurance policies more broadly. Both
In Odom, the Sixth Circuit Court of Appeals found that a child, who lived with her mother in the named insured’s house, but was unrelated to the insured, was “in the care of” the insured. The court relied on the fact that the insured provided the child with significant physical care, giving her housing, clothing, and food, and sharing in her care. Id. at 250.
While the insured was looking after her, the child was fatally injured. The mother sued the insured for wrongful death. The Sixth Circuit agreed with State Farm that (1) the child was an “insured” under the policy because she was “in the care of” the named insured, and (2) the policy excluded liability coverage for injuries suffered by an insured. Accordingly, State Farm was not obligated under the policy to provide coverage or defense arising out of the insured’s alleged liability for the child’s injuries and death. Id. at 249-250.
Notably, in Odom, State Farm sought to have the child deemed an “insured” under the policy because such a finding precluded coverage. In this case, State Farm seeks to prevent this Court from finding that Dawn Mysierowicz is an insured under Bonnie Twitchell’s policy.
Also persuasive is the Louisiana Court of Appeals decision in United States Fidelity & Guaranty Co v Richardson, 486 So 2d 929, 930-931 (La App, 1986). There, the question whether the fourteen-year-old daughter of the insured’s girlfriend living in the insured’s home was “in the care of” the insured for purposes of coverage under the insured’s homeowner’s policy. The policy defined as insureds “residents of the named insured’s household, his spouse, the relatives of either, and any other person under the age of twenty-one in thе care of any insured.” Id. at 931.
The court found that all three individuals lived together in the insured’s house under an unwritten agreement for sharing expenses. The insured paid the mortgage, bought his food, and took care of his vehicle. The insured’s girlfriend paid for utilities, telephone bills, her car, purchased food for her and her daughter, and occasionally contributed to the mortgage payment. Id. at 930-931. In concluding that the fourteen-year-old was “in the care of” the insured and was, therefore, an “insured” under the policy, the court observed:
It is clear that on the basis of the agreement between the parties, the payments made by James Richardson [thе insured] did directly benefit Demetric Ayio. He was caring for the child by letting her stay in his home and by paying*367 for both the maintenance of the home and his other agreed-upon expenses. Further, the bills and other expenses paid by James Richardson allowed Evelyn to devote more of her own income to Demetric’s needs. Even though he did not consider himself as having guardianship of Demetric, James was much more than a nameless, unseen benefactor. We conclude, therefore, that the trial court was correct in its finding that the child was “in the care of” James Richardson under the policy. [Id. at 931.]
Thus, the insured’s homeowner’s insurance company wаs required to provide insurance coverage for the girl and her mother when the girl injured her classmate. Id.
Similarly, in Nationwide Mut Ins Co v Anderson,
“insured” means you and residents of your household who are:
a. your relatives; or
b. other persons under the age of 21 and in the care of any person named above. [Id. at 93.]
The lower court granted summary judgment for the plaintiff. Id. The North Carolina Court of Appeals found that the son was an insured under the pоlicy. The named insured, the mother, and the son had acted as a family for many years, the son even refer
Giving the phrase “in the care of” a nonstrained, nontechnical reading, and in light of the reasoning in cases that construed nearly identical provisions, I find that Dawn Mysierowicz was “in the care of” defendant’s insured, Bonnie Twitchell. Therefore, she was an “insured” under defendant’s homeowner’s policy.
In accordance with established precedent, I would construe the phrase against defendant and in favor of plaintiff, as Mysierowicz’ assignee. State Farm Mut Automobile Ins Co v Enterprise Leasing Co,
It is undisputed that Bonnie Twitchell permitted Mysierowicz to stay in her home without requiring Mysierowicz to pay for either the maintenance of the home or substantial household expenses. Bonnie Twitchell, not Mysierowicz’ mother, provided for Mysierowicz during the approximately six months
As in Anderson, Mysierowicz provided her own support by purchasing her own clothing and personal articles and maintaining her vehicle.
Finally, as in Anderson, supra, Mysierowicz’ age did not preclude her from being dependent on Bonnie
By construing the phrase “in the care of” in favor of coverage and applying the law to the essentially uncontested material facts, I find that Dawn Mysierowicz came within the definition of an “insured” because she was “in the care of” Bonnie Twitchell, the named insured under defendant’s homeowner’s policy.
In conclusion, what the majority denominates an issue of fact is actually an issue of law that only a court should decide. Given that no genuine issue of material fact exists and given our rules of contract construction, plaintiff was entitled to judgment as a matter of law under MCR 2.116(C)(10). Therefore, I would affirm the judgment of the Court of Appeals.
799 F2d 247 (CA 6, 1986).
In Odom, supra at 249, the insurance contract defined the term “insured” as “you and the following residents of your household: a. your relatives; b. any other person under the age of 21 who is in the cаre of any person named above.”
118 NC App 92;
The Sixth Circuit Court of Appeals in Odom, supra at 250, found that “in the care of” was unambiguous in the context of that case. However, it said that the phrase does not mean only “legal care” as opposed to “legal and physical care,” where the named insured furnishes housing, clothing, food, and security for a household resident. In so concluding, Odom indicates that the phrase “in the care of” would be ambiguous if the question were whether the phrase meant “legal care” versus “physical care.” Id.
Assuming that the majority correctly concluded that the phrase was unambiguous, its construction and legal conclusion from uncontested facts was a question of law for the court to decide. Vigil v Badger Mut Ins Co,
[A] court . . . does not have to remain idle in the presence of undisputed, uncontroverted facts. In this situation, the only question remaining is what legal conclusion can be drawn from the facts. This question is to be decided as a matter of law by the trial judge.
Ante at 358.
The majority states that the “contract does not define the phrase ‘in the care of.’ ” Id. It also concludes that the phrase is unambiguous. Id. at 355. Despite these assertions, the majority, in effect, provides the jury with a list of possible definitions from which to choose. In essence, it permits the jury to choose a meaning or interpretation without regard to the intent of either party. Basic contract law requires courts to honor the intent of the parties. Rasheed v Chrysler Corp, supra. Furthermore, the majority compiles extrinsic factors to help the jury in construing the contract. Courts cannot supply material provisions that are absent from a clear and unambiguous writing. Purlo Corp v 3925 Woodward Ave,
Travis Twitchell, son of Bonnie Twitchell testified that he maintained Dawn’s car by performing oil changes, tune-ups, and other activities.
While ordinary house guests are arguably provided with food and shelter, Dawn was different in that she was not free to return to another home. Bonnie Twitchell’s home was the only one Dawn had during the period in question.