*1 YAHR v GARCIA 9, January 1989, Lansing. Docket No. 108733. Submitted at Decided 19, 1989. appeal applied June Leave to for. Yahr, Yahr, Geralyn Jason M. son of John C. and K. died after being by Garcia, by an struck automobile driven Ramon G. who policy was insured under an automobile to him Garcia, Exchange. Farmers Insurance as a member of his household, father Raul Garcia’s was also covered policy policy automobile issued to his father. Raul Garcia’s antistacking provision contained an which stated: "With re- occurrence, spect any any or accident loss to which this and other insurance issued to the insured company apply, payment also no shall be made hereunder which, any payable when added to under such policies, other insurance in a result total payment any person to the insured or in excess of the highest applicable policy.” limit of such wrongful brought by A action death Mr. and Yahr in Mrs. against Genesee Circuit Court Ramon Garcia and Farmers was entry judgment settled with the of a consent in the amount of $60,000 against judgment preclude defendants. The did plaintiffs seeking recovery from under the issued to Raul plaintiffs subsequently sought recovery, Garcia. When court, Elliott, J., Philip plaintiffs, trial C. ruled in favor determining antistacking provision that inclusion of the in that policy relating section of the to conditions rather than exclu- deceptive expecta- sions was and that it violated a reasonable provision tion the insured that such would be found along exclusions section other situations for which appealed. there was no Defendant Farmers Appeals The Court of held: following guided by construing A court is rules when (1) policy exception or exclusion: are to be (2) insurer; ambiguities construed are to be References 2d,
Am Jur Automobile Insurance 291. § §§ Insurance; See the Index to Annotations Insur- under Automobile ance; Other Insurance. (3) insured; favor of the the insurer has a (4) exclusion; escape make clear liability by taking advantage of a forced construction of the *2 (5) language patience policy; in courts the have no with at- paid tempts by escape taking liability by advantage a insurer to ambiguity, meaning, of an a hidden or a forced construction of language might policy, questions the all have the when been (6) words; by generous plainer a avoided use of and the more protected against confusing must insured be statements in the policy. support In this case rules three and six the trial court’s ruling against the insurer. Affirmed. J., dissented would hold that the J. and antistacking provision question not run afoul of does relating judicial the rules of insurance construction prevention stacking coverage not and does defeat an expectations
insured’s of insurance He of the trial court. would reverse the decision — — 1. Insurance Judicial Construction Exclusions. court, construing exceptions A and exclusions from (1) policy, guided following by under an the rules: (2) insurer; are the to be (3) insured; ambiguities are construed in favor of the to be (4) any exclusion; duty has a insurer to make clear insurer escape by taking advantage may of a forced con- (5) language policy; of the courts have no struction patience attempts by a insurer to ambiguity, meaning, taking advantage or a of an a hidden policy, when forced construction of the in the generous might questions more have been avoided (6) words; protected must be use and insured against confusing policy. statements — 2. Insurance Exclusions. exclusion; duty clear an exclusion An insurer has to make placed the Exclusions section must be — Exclusions. 3. easily insurance in has to write An liability by escape taking language, readable complex phraseol- wordy advantage of caused confusion might ogy have avoided use of been confusion plainer language. Opinion op the Court (by Gary Piggott), plain- Bueche & Failer for tiffs. Doyle, (by
O’Neill, Ackerman, Wallace & PC. Filipiak), Charles F. Ex- Farmers Insurance change. Kelly Gribbs, P.J., Before: and Michael
Marilyn Kelly, JJ. Marilyn Kelly, J. Defendant Farmers Insur- Exchange appeals right ance as of a circuit court permitting recovery order under a Farmers auto- mobile insurance contains purports "other insurance” clause. The clause deny multiple recovery "stacking” of insurance payments under more than one company. limits the total dollar amount *3 payable highest applicable to the amount under any policy. one September, defendant Ramon Garcia driving
was an automobile insured Farmers plaintiffs’ when he struck and killed thirteen- parties month-old son. The settled suit their through judgment judg- a consent $60,000. preserved liability ment released Ramon from plaintiffs’ right recovery to seek further under policies. other insurance accident,
At the time the Ramon lived with father, his Raul. Raul Garcia was also insured He maintained his Farmers. which listed car, own one not involved the accident. The policy said it covered others in the household driving while vehicles in to one addition the policy. named action Garcia’s the the Plaintiffs filed instant $30,000, to the under Raul recover limit liability Farmers denied the based on Mich 705 op the Court para- This is found at insurance” clause. It 9 of the section "Conditions.” graph entitled reads: OTHER IN THE COMPANY INSURANCE occurrence, respect any loss With accident or any policy or
to which this and policies other insurance Company the the also issued to insured apply, no made hereunder payment shall be which, payable to any when added policies, such other under payment result in a total insured highest applica- person excess of liability limit of ble its "other policy including After review of clause, opin court issued an circuit allowing striking recovery and order ion on Justice as relied Chief deceptive. DAIIE, opinion in Powers lead Williams held The court 398 NW2d as an exclusion of the clause that existence It ruled unclear. impact on were expec defeated the reasonable that also therefore and that was tations of the insured and unenforceable. void court the trial argues appeal,
On and affirm. disagree erred. We us, binding upon The Powers decision is not However, find the we decision. majority was opinion persuasive, reasoning in Justice Williams’ Ass’n Auto in DeMaria v Club panel as did 251, 254; 418 NW2d (On *4 Remand), rules forth six opinion sets policies: construing automobile 1) to the policy in an insurance "[Ejxceptions provided for are be general against the insurer.” Garcia Yahr v op the Court 2) "escape liability by tak- may An insurer ambiguity . . . ing advantage " that can there are two constructions '[W]herever most placed upon policy, be construction ” adopted.’ policyholder favorable to the will be 3) policy . . . An insurer must "so draft the nonliability under the to make clear the extent exclusion clause.”
4) "escape liability by tak- An insurer ing advantage ... construction of the a forced con- language policy in a "[Technical policies of are not structions favored. . . .” 5) patience attempts "The courts have no taking
by a
meaning,
advantage
ambiguity, a hidden
or a
of an
policy,
in a
forced construction
question might
have been avoided
generous
more
use words.”
6)
ambiguous
deceptive.”
only
but
"[N]ot
"[T]he
protected against confusing
policyholder must be
. . . .”
statements
omitted.
[Citations
Review of the insurance and the question convinces us that the "other insurance” clause violated not rule three but only also rule six. three, respect
With to rule failed to draft so as to make clear Exclusions section the extent of in- nonliability tended. The "other clause does not *5 Opinion of the Court
appear under the Exclusions section. It is not even vaguely by placement identified as an exclusion captioned supplemental endorsement, under a supra. DeMaria, was a similar clause in policy appears "other in this insurance” clause under the Conditions section on the next to last page belong logically
of does not there, as it is much more an exclusion than a apparent compares condition. This becomes as one it with the other clauses in each section.
The other Conditions clauses include actions constituting acceptance agreement; of the a re- quirement that the accident must occur within the policy period; requirement of written notice of provision against assignment; loss; a cancellation provisions; requirement proof and a of loss. clauses, clause, These unlike the "other insurance” give cover situations which rise to The Exclusions section includes clauses which deny recovery injured persons to entitled to re- compensation ceive workers’ in- benefits from the analogous sured. The "other insurance” clause type situation, to this where is denied of the because gency. existence of some other contin- attempted Farmers has inserting taking advantage then of confusion phrasing in the of the "other insurance” clause. doing, supra. so also violated rule six general Rule one states that are to be the insurer. As insurer, between the insured and the the latter complete drafting had control of the writing question, When long, chose complex wordy and sentence. average person purchasing
We believe the this great difficulty would have under- Court standing opaque clause. Such why us insureds reminds
use reading commonly despair their getting. they are to learn what effort easily confusion could have avoided *6 use of lan- clause "other insurance” guage. was that
The trial final conclusion court’s expec- the reasonable insurance contract violated that an insured. be true tations of the expect reasonably his to stack insured cannot coverage. Bradley Mid-Century Co, 409 Mich (1980). 1, 57-58; 141 doubt it occurs 294 NW2d We people they if stack to most coverage to consider could selecting sense, in a broader we find that an However expecta- insured is not without some reasonable choosing expecta- tions when tion is that when one refers to the Exclusions insurance. One such section, one will find listed there the situations supra, Powers, which the will not cover. See pp 631-634. A in situation which more than policy category. liability for in that has an accident falls agree
Thus we this Farmers insur- ance contract defeated the insured’s reasonable expectation appear that exclusions would Exclusions section. duty
Farmers had a to make the exclusions people pay chose clear to the who insur- supra, p Powers, ance. 627. It violated that through obfuscating language in use of by deceptive place- "other insurance” clause and ment of the clause in the affirm the We ruling voiding trial court’s the "other insurance” provision.
Affirmed.
Gribbs, P.J., concurred.
App
Mich
Michael J.
J.
Kelly,
Dissent
(dissenting).
disagree
I
majority’s
with the
conclusion that
the antistack-
ing clause violated rules three and six from Pow-
DAIIE,
ers v
427 Mich
In DeMaria v Auto Club Ins Ass’n
(1987),
App 251;
Nor is that Farmers’ clause was listed under the "Conditions” section of the insur- ance tions. The rather than in the "Exclusions” sec-
antistacking supra, DeMaria, clause "Coverage Applicability was entitled ment” endorsements to the App Endorse- and was found the amendments and contract. 165 Mich at 254. Review of Farmers’ indicates specific that tions where the Exclusions section listed situa- coverage simply did not apply. However, the Conditions section contained paragraphs, including issue, several the clause at policy coverage, which did not eliminate but merely placed cap recovery on the overlapping policies. the case of Farm- antistacking placed, deceptively ers’ was Dissent cap coverage to make clear the nor did fail multiple coverage of additional the case policies Farmers. concluding that trial court also erred antistacking the in- clause defeated Farmers’ coverage. expectation Con- sured’s reasonable trary holding, prevention the trial court’s stacking not defeat an insured does expectations party’s Brad- Mid-Century ley Co, 57-58; 294 Supreme Bradley, Court our NW2d argument rejected recovery duplicate defeated which barred
clauses parties. expectations Id. of insured the reasonable stacking prevent are enforceable to These clauses payments. Id. at 48.1 believe that of insurance concluding clearly that Farm- erred trial court Exchange’s antistacking was ers void. the trial court’s decision.
I reverse