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Home-Owners Insurance Co. v. Andriacchi

Court of Appeals of Michigan

June 8, 2017

HOME-OWNERS INSURANCE COMPANY, Plaintiff/Counter-Defendant-Appellee,
DOMINIC F. ANDRIACCHI, Defendant/Counter-Plaintiff-Appellant. HOME-OWNERS INSURANCE COMPANY, Plaintiff/Counter-Defendant-Appellant,
OMINIC F. ANDRIACCHI, Defendant/Counter-Plaintiff-Appellee.

         Marquette Circuit Court LC No. 14-052954-CZ

          Before: Sawyer, P.J., and Murray and Gleicher, JJ.

          MURRAY, J.

         In Docket No. 331260, defendant/counter-plaintiff Dominic F. Andriacchi appeals as of right the circuit court order granting plaintiff/counter-defendant Home-Owners Insurance Company's motion for summary disposition under MCR 2.116(C)(10) in this declaratory judgment action regarding whether Home-Owners had a duty to provide insurance coverage for Andriacchi under a policy that excluded coverage for loss caused by any "earth movement." In Docket No. 332457, Andriacchi appeals as of right a subsequent order granting fees and costs to Home-Owners under MCR 2.625, while in Docket No. 332640, Home-Owners appeals as of right, and Andraicchi appeals by delayed leave granted, that same order that also denied Andriacchi's motion to disqualify the trial judge and determined it to be frivolous, but declined to award Home-Owners sanctions under MCR 2.114 and MCL 600.2591. We affirm in part, vacate in part, and remand for further proceedings.


         Home-Owners provided a "businessowners policy" of insurance to Andriacchi with effective dates of June 1, 2013, through June 1, 2014. The policy covered risks of physical loss unless the loss was "[e]xcluded in Section B., Exclusions" or "[l]imited in Paragraph A.4., Limitations." On March 1, 2014, Andriacchi sought coverage under the policy for damages to his building that occurred after a major street repair had taken place. A licensed professional engineer retained by Home-Owners determined that "[e]arth movement beneath the interior concrete floor slab has resulted in the observed structural damage at the subject law offices building." The preliminary engineering report stated:

This earth movement resulted in the subsidence of supporting soils and interior concrete floor slab. The perimeter footings appear stable and undisturbed.
Supporting soils usually do not move and subside under older structures; any subsidence usually appears shortly after construction. However, a major infrastructure/street project that required long periods of dewatering and construction vibration was just completed per the insured. The interaction of original site soil preparation, fill quality, placement, and compaction under the interior concrete slab with recent dewatering and construction activity combined to create the recent earth movement event.

         The claim was denied pursuant to an exclusion to coverage in Section B for "[a]ny earth movement." Home-Owners thereafter sought a declaration that it owed no duty to cover Andriacchi's losses because the losses were excluded under the policy.

         Home-Owners eventually filed a motion for summary disposition under MCR 2.116(C)(8), (C)(9), and (C)(10), arguing that the language of the exclusion barring coverage for losses resulting from "any earth movement" is clear and unambiguous and fell squarely within the acknowledged operative facts of Andriacchi's loss. Home-Owners sought summary disposition on its declaratory judgment claim as well as on Andriacchi's counterclaims, and requested costs and attorney fees under MCR 2.114.

         In response, Andriacchi maintained that the earth movement exclusion in the policy applied only to natural earth movement, not to "man-made" earth movement. He contended that the words "any earth movement" must be read in context with those that surround them and, therefore, the exclusion was limited in application to natural phenomena; in the alternative, Andriacchi maintained that the exclusion was subject to more than one reasonable interpretation and was, therefore, ambiguous. Andriacchi sought summary disposition under MCR 2.116(I)(2), and requested damages in the amount of $92, 100 to repair his damaged property, statutory interest, prejudgment interest, and actual attorney fees and costs.

         The trial court held a hearing on the motion and, following the parties' arguments, concluded that "[a]ny earth movement means any earth movement. And I don't need Latin rules of statutory construction to turn that into anything else other than what it says." The trial court thereafter entered an order granting Home-Owners's motion for summary disposition on the basis "that [Home-Owners] has no duty to provide coverage for [Andriacchi's] losses" and dismissing Andriacchi's counterclaim.

         Andriacchi thereafter filed a motion to disqualify the trial judge "for ex parte communication and bias" as a result of the court's reading of Home-Owners's reply brief that he had apparently not received before the hearing, and purported bias against him. The trial court denied the motion to disqualify, stating:

I'm denying the motion for a disqualification. I'm finding that the communication-so called communication or reply brief, which was accompanied by a proof of service, and not-Mr. Andriacchi is not objecting to the proceeding, and gave a nine- or ten-minute argument without benefit of the reply brief, and I'm not sure the reply brief would have helped him because it didn't change anything about what the plaintiff was arguing. So I'm finding that it was not an ex parte communication.
. . . And the court rule has a 14-day window there for good reason. Number one, I don't think I've shown any bias or prejudice. Number two, as Mr. Smith pointed out, it's disingenuous to wait until you get an adverse ruling on a substantive motion, and then to raise all of these prejudicial allegations, going back to when the case was filed. But I allowed Mr. Andriacchi to make a record on all of those perceived-he calls it scolding or evidence of prejudice. I think he's made a sufficient record.
But to the extent that they go back more than 14 days from the filing of his motion, they're denied for that reason. They're also denied because I don't believe they're prejudicial. I was trying to provide some guidance.

         The State Court Administrator assigned Judge Charles Goodman to review the motion for disqualification. After a hearing, Judge Goodman issued a detailed order affirming the denial of the motion to disqualify the trial judge, finding that "[t]he record before this Court shows no evidence of favoritism, prejudice, bias or improper conduct on the part of" the trial judge.

         After Andriacchi filed his claim of appeal, Home-Owners filed a motion to tax attorney fees and costs under MCR 2.114, MCR 2.625, and MCL 600.2591, in the amount of $18, 694.43. Home-Owners requested costs and fees under MCR 2.114 and MCL 600.2591, for Andriacchi having filed a frivolous defense, counterclaim, and motion to disqualify, and costs under MCR 2.625, for prevailing on the motion for summary disposition. In response, Andriacchi argued that his position was not frivolous due to the lack of Michigan precedent, and that Home-Owners was entitled at most to $20 in costs for the summary disposition motion, and disputed the remainder of the costs requested.

         At a subsequent hearing, Home-Owners conceded that it was not entitled to a $150 charge for statutory costs for proceeding to trial, as there was no trial. The trial court then ruled:

I've never awarded costs-actual attorney fees. I . . . came very close in this case, but I am not going to award them. I . . . am, frankly, uncomfortable awarding fees to a party defending my disqualification.
And with respect to attorney fees on the underlying claim, I did grant a motion for summary disposition. I believe that the law is clear, but that Mr. Andriacchi was making an effort to establish Michigan precedent to the contrary on that . . . policy language.
I'm . . . finding that the statutory costs [under MCR 2.625], Mr. Smith, of course, can be imposed.

         The trial judge clarified that Andriacchi's motion to disqualify was frivolous pursuant to MCR 2.114 and MCL 600.2591, and then entered an order and judgment (1) denying Home-Owners's motion "for violation of MCR 2.114 and MCL 600.2591 regarding the defense of the coverage issue" for reasons stated on the record, and (2) finding the defense motion to disqualify the judge to be frivolous pursuant to MCR 2.114 and MCL 600.2591, but declining to award costs and attorney fees. A second order and judgment was entered granting Home-Owners's motion to tax costs pursuant to MCR 2.625, in the amount of $821.76.[1]

         II. ANALYSIS


         For the reasons explained below, we hold that the trial court properly granted Home-Owners's motion for summary disposition because the earth movement exclusion plainly excluded coverage for loss caused by "any" earth movement, and there is no material factual dispute that Andriacchi's loss was caused by earth movement.

         Because the trial court considered documentary evidence in granting the motion for summary disposition, we review the trial court's order as one granted pursuant to MCR 2.116(C)(10). See Cuddington v United Health Servs, Inc, 298 Mich.App. 264, 270; 826 N.W.2d 519 (2012). Summary disposition is appropriate under MCR 2.116(C)(10) if "there is no genuine issue as to any material fact, and the moving party is entitled to judgment . . . as a matter of law." In conducting the de novo review, this Court construes the affidavits, pleadings, depositions, admissions, and other documentary evidence submitted by ...

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