Michigan Court of Appeals; Docket # 341150; Unpublished
Judges Redford, Markey, and Kelly; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Uninsured Motorist Benefits
SUMMARY:
In this unanimous unpublished per curiam decision regarding Plaintiff’s claims for uninsured motorist benefits, the Court of Appeals upheld that trial court’s grant of summary disposition dismissing Plaintiff claims. The Court of Appeals determined that Plaintiff was not entitled to uninsured motorist benefits from his insurer, Defendant AAA, because the vehicle responsible for the accident was not “uninsured.” Rather, the at-fault driver’s liability insurer simply denied coverage because the plaintiff failed to file an auto negligence lawsuit against the at-fault driver within the applicable three-year statute of limitations. The Court of Appeals rejected the Plaintiff’s argument that this denial of liability coverage effectively rendered the at-fault driver “uninsured.” The Court remarked that Plaintiff’s argument, “[t]aken to its logical end . . . would implicate UM provisions every time alleged tortfeasors, supported by their insurers, avoided liability.”
Plaintiff was involved in an automobile accident caused by Robert Tucker. Tucker’s vehicle was owned by Richard Sovis and insured under a policy with AAA. Plaintiff sought UM benefits under his own policy, with Defendant Safeco Insurance Company of America, not realizing that Sovis’s vehicle was insured. Plaintiff did not commence suit, then, until after the statutory period of limitations for his third party claims against Tucker and Sovis lapsed, prompting AAA to move for summary disposition based on the lapsed period of limitations. The trial court granted AAA’s motion, and dismissed Plaintiff’s UM claim against Safeco as well, “concluding that Sovis’s vehicle was not uninsured.”
Plaintiff first argues that Sovis’s vehicle was effectively uninsured because AAA denied coverage with respect to Sovis’s vehicle. The Court of Appeals found this argument to be entirely without merit, reasoning:
Simply put, AAA did not deny coverage. Indeed, AAA fully complied with its obligations under its policy regarding Sovis’s vehicle, retaining counsel to defend Sovis and Tucker, which revealed that AAA was fully prepared to provide indemnification if liability was established. See Winans v Hartford Accident Indemnity Co, 25 Mich App 75, 82-83; 181 NW2d 17 (1970) (insurer denies coverage to an insured when it refuses or fails to provide the protection contracted for in the insurance policy, such as defending the insured against a claim or satisfying a judgment). The successful defense and plaintiff’s failure to establish liability did not translate into a denial of coverage by AAA. Had AAA actually denied coverage under the policy, it would not have defended Sovis and Tucker. And there is no indication in the record that AAA denied that it had a duty to cover damages within policy limits if awarded. See Lotoszinski v State Farm Mut Auto Ins Co, 417 Mich 1, 12; 331 NW2d 467 (1982) (denial of coverage within the policy’s language would require a showing that insurer denied duty to indemnify against damages). Taken to its logical end, plaintiff’s theory would implicate UM provisions every time alleged tortfeasors, supported by their insurers, avoided liability.
Plaintiff also argued that “Safeco was equitably estopped from denying coverage for UM benefits because it was Safeco’s failure to discover the existence of the AAA insurance policy that caused plaintiff to lose his cause of action.” The Court of Appeals did not allow an application of the doctrine of equitable estoppel in this way, reasoning:
Equitable estoppel simply cannot be applied to broaden Safeco’s UM coverage to cover damages sustained by plaintiff in the accident that involved Sovis’s insured vehicle. If equitable estoppel is invoked as plaintiff demands, it would create both a contract that the parties did not agree to and liability contrary to the contract of insurance.
Moreover, plaintiff was responsible under the insurance policy to provide evidence that an uninsured motor vehicle was involved. Although Safeco repeatedly asked plaintiff to submit the required evidence, Safeco never informed plaintiff that an uninsured motor vehicle was involved. Further, while Safeco did not locate any pertinent insurance information in its databases, there is no indication of negligence or intentional misconduct in doing the search, and plaintiff was ultimately able to identify Sovis for purposes of the suit, quickly discovering that there was an insurance policy covering his vehicle. Equitable estoppel arises when a party, by representations, admissions, or silence, negligently or intentionally induces another party to believe certain facts that are then justifiably relied on by the other party. Conagra, Inc v Farmers State Bank, 237 Mich App 109, 141; 602 NW2d 390 (1999). Plaintiff failed to create an issue of fact with respect to the elements of equitable estoppel. “Equity will not lend aid to those who are not diligent in protecting their own rights.” Knight v Northpointe Bank, 300 Mich App 109, 114; 832 NW2d 439 (2013). This principle clearly fits the facts in this case.
