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Hastings Mutual Insurance Co. v. Grange Insurance Co. of Michigan

Court of Appeals of Michigan

May 16, 2017

HASTINGS MUTUAL INSURANCE COMPANY, Plaintiff-Appellee,
v.
GRANGE INSURANCE COMPANY OF MICHIGAN, Defendant-Appellant. HASTINGS MUTUAL INSURANCE COMPANY, Plaintiff-Appellant,
v.
GRANGE INSURANCE COMPANY OF MICHIGAN, Defendant-Appellee.

         Berrien Circuit Court LC No. 14-000258-NF

          Before: Markey, P.J., and Murphy and Meter, JJ.

          Murphy, J.

         In Docket No. 331612, defendant Grange Insurance Company of Michigan (Grange) appeals by right the trial court's order denying its motion for summary disposition and granting summary disposition in favor of plaintiff, Hastings Mutual Insurance Company (Hastings). In Docket No. 333193, Hastings appeals by right the trial court's order denying its motion for attorney fees. We affirm.

         This case arises out of a fire that occurred on April 15, 2014, in a barn owned by Williams Farms, LLC, a family-operated farm that grows a variety of vegetables. Ryan Keath, a salaried employee of Williams Farms, regularly used the barn and its equipment to provide repairs and maintenance to the farm's vehicles, as well as to the vehicles of family members. Keath was repairing his sister's motor vehicle when the fire began. The fire ultimately destroyed the barn and all of its contents. Hastings, the insurer of Williams Farms's real and personal property, paid Williams Farms $699, 134 in insurance benefits to cover the loss. Hastings later filed a claim as subrogee for property protection benefits in the same amount from Grange, the no-fault insurer of the vehicle involved in the fire. Grange denied the claim by Hastings in August 2014, and Hastings subsequently filed suit against Grange.

         Both parties filed motions for summary disposition under MCR 2.116(C)(10). The trial court granted summary disposition in favor of Hastings, finding that the no-fault act, MCL 500.3101 et seq., rendered Grange liable for the property damage. The trial court specifically ruled that MCL 500.3121(1) did not relieve Grange of liability, given that Williams Farms was a farm and was not in the business of repairing, servicing, or maintaining motor vehicles. Accordingly, the trial court granted Hastings' motion for summary disposition and denied Grange's competing motion.

         On appeal, Grange argues that the trial court improperly granted Hastings' motion for summary disposition because Williams Farms was in the business of repairing, servicing, or maintaining motor vehicles for purposes of MCL 500.3121(1) and, therefore, the statute operated to exclude Grange from liability for the property damage. We disagree.

         This Court reviews de novo a ruling on a motion for summary disposition, as well as issues of statutory construction. Johnson v Recca, 492 Mich. 169, 173; 821 N.W.2d 520 (2012). With respect to a motion for summary disposition brought pursuant to MCR 2.116(C)(10), this Court in Pioneer State Mut Ins Co v Dells, 301 Mich.App. 368, 377; 836 N.W.2d 257 (2013), set forth the governing principles, stating:

In general, MCR 2.116(C)(10) provides for summary disposition when there is no genuine issue regarding any material fact and the moving party is entitled to judgment or partial judgment as a matter of law. A motion brought under MCR 2.116(C)(10) tests the factual support for a party's claim. A trial court may grant a motion for summary disposition under MCR 2.116(C)(10) if the pleadings, affidavits, and other documentary evidence, when viewed in a light most favorable to the nonmovant, show that there is no genuine issue with respect to any material fact. A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ. The trial court is not permitted to assess credibility, weigh the evidence, or resolve factual disputes, and if material evidence conflicts, it is not appropriate to grant a motion for summary disposition under MCR 2.116(C)(10). A court may only consider substantively admissible evidence actually proffered relative to a motion for summary disposition under MCR 2.116(C)(10). [Citations and quotation marks omitted.]

         With respect to the construction of MCL 500.3121 and statutes in general, our Supreme Court in Whitman v City of Burton, 493 Mich. 303, 311-312; 831 N.W.2d 223 (2013), observed:

When interpreting a statute, we follow the established rules of statutory construction, the foremost of which is to discern and give effect to the intent of the Legislature. To do so, we begin by examining the most reliable evidence of that intent, the language of the statute itself. If the language of a statute is clear and unambiguous, the statute must be enforced as written and no further judicial construction is permitted. Effect should be given to every phrase, clause, and word in the statute and, whenever possible, no word should be treated as surplusage or rendered nugatory. Only when an ambiguity exists in the language of the statute is it proper for a court to go beyond the statutory text to ascertain legislative intent. [Citations omitted.]

         "The owner or registrant of a motor vehicle required to be registered in this state shall maintain security for payment of benefits under personal protection insurance, property protection insurance, and residual liability insurance." MCL 500.3101(1) (emphasis added). MCL 500.3121(1) provides:

Under property protection insurance an insurer is liable to pay benefits for accidental damage to tangible property arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle subject to the provisions of this section and sections 3123, 3125, and 3127. However, accidental damage to tangible property does not include accidental damage to tangible property, other than the insured motor vehicle, that occurs within the course of a business of repairing, servicing, or otherwise maintaining motor vehicles. [Emphasis added.]

         In the present case, the parties dispute whether vehicle repairs performed by a salaried employee of Williams Farms, a business whose primary purpose is farming, qualifies under the course-of-business exception in MCL 500.3121(1). Our Supreme Court has ruled that a "business" encompasses a person engaged in a service, activity, or enterprise for benefit, gain, advantage, or livelihood. Terrien v Zwit, 467 Mich. 56, 64; 648 N.W.2d 602 (2002), quoting Random House Webster's College Dictionary (1991) and Black's Law Dictionary (6th ed); see also Allied Prop & Cas Ins Co v Pioneer State Mut Ins Co, 272 Mich.App. 444, 450; 726 N.W.2d 83 (2006) (a business is a commercial ...


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