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Matouk v. Michigan Municipal League Liability & Property Pool

Court of Appeals of Michigan

July 11, 2017

TIMOTHY MATOUK, Plaintiff-Appellee,
v.
MICHIGAN MUNICIPAL LEAGUE LIABILITY & PROPERTY POOL, Defendant-Appellant.

         Macomb Circuit Court LC No. 15-003573-CK

          Before: O'Brien, P.J., and Jansen and Stephens, JJ.

          Jansen, J.

         Defendant appeals by leave granted[1] an order granting partial summary disposition in favor of plaintiff entered after the trial court determined that defendant was contractually obligated to defend plaintiff, a police officer for the City of Harper Woods, in a federal civil rights action wherein plaintiff is a named defendant. We reverse.

         This case arises from a federal lawsuit brought against plaintiff and a number of other individually named police officers and related defendants after the January, 2010 disappearance and death of plaintiff's cousin, JoAnn Matouk Romain. On the day of her disappearance, Romain allegedly drove from her home in Grosse Pointe Woods to attend church services in Grosse Pointe Farms. Romain never returned home, and her vehicle was later found in the parking lot of her church, across the street from the shore of Lake St. Clair. An investigation by the Grosse Pointe Woods and Grosse Pointe Farms police departments revealed some evidence that Romain walked out onto the frozen lake and fell through the ice. Although a search ensued, Romain's body was not found until three months later. Romain's death was deemed a suicide. However, members of Romain's family believe that Romain was murdered, and that the Grosse Pointe Woods and Grosse Pointe Farms police departments conspired to conceal the crime. Romain's family members also believe that plaintiff, who is Romain's cousin as well as a police officer for Harper Woods, either murdered Romain or participated in the cover-up conspiracy.

         Romain's family, on behalf of Romain's estate, brought a complaint against the city of Grosse Pointe Farms, the city of Grosse Pointe Woods, 19 individual police officers, and an individual identified as "Suspect One, " in the Eastern District of Michigan. Although plaintiff was not named in the original complaint, a second amended complaint in the federal lawsuit names plaintiff "individually and in his official capacity as a public safety officer for the City of Harper Woods, " among the defendants, which include all of the municipal and police defendants named in the original complaint, as well as individuals identified as "John Doe" and "Killer John Doe." As to "all defendants, " the complaint alleges (1) violation of Romain's civil rights under 42 USC § 1985 for conspiracy to deny Romain her equal protection of the law by covering up her murder, and (2) violation of Romain's civil rights under 42 USC § 1983 for "state-created danger" in the defendants' acts of informing Romain's killer that they would cover up the murder and rule it a suicide. A third count, for violation of Romain's civil rights under 42 USC § 1983 for "failure to implement appropriate policies, customs, and practices, " is labeled "as to all defendants, " but clearly applies only to the city of Grosse Pointe Woods and the city of Grosse Pointe Farms. The fourth count is brought against 17 of the named defendants, including plaintiff, and alleges violations of Romain's civil rights under 42 USC § 1983 for wrongful death.

         Defendant, as a liability insurer, provides liability coverage for the city of Grosse Pointe Woods and the city of Grosse Pointe Farms. Pursuant to their municipal liability policies, defendant agreed to provide a defense to the federal action for the two municipalities and all of their police officers. The city of Harper Woods, where plaintiff was employed at the time of the alleged misconduct, also has a municipal liability insurance policy (the Policy) with defendant. However, defendant refused to provide for plaintiff's defense in the federal action, asserting that the specific allegations of misconduct against plaintiff fell outside defendant's policy.

         Plaintiff brought a complaint for declaratory judgment in the Macomb Circuit Court, seeking to compel defendant to pay for his defense in the federal court action. Defendant brought a motion for summary disposition pursuant to MCR 2.116(C)(10), arguing that coverage under the city of Harper Woods' municipal liability policy only extends to a Harper Woods employee for damages arising from conduct "within the scope of their employment by or duties on behalf of, " Harper Woods. The trial court denied defendant's motion as premature because discovery had not yet closed. However, less than a month later, plaintiff brought his own motion for partial summary disposition, limited to the subject of defendant's duty to defend, under MCR 2.116(C)(10). This time, the trial court granted the motion, concluding that "the Defendant has a contractual obligation to provide a defense to Plaintiff for the Romain case pursuant to the terms of the Defendant's subject insurance policy."

         On appeal, defendant argues that the trial court erred when it determined that defendant was contractually obligated to provide plaintiff with a defense in the federal lawsuit under the Policy because the misconduct alleged in the federal complaint was not undertaken within the scope of plaintiff's employment. We agree.

         This Court reviews de novo a trial court's decision on a motion for summary disposition. Loweke v Ann Arbor Ceiling & Partition Co, LLC, 489 Mich. 157, 162; 809 N.W.2d 553 (2011). "In reviewing a motion brought under MCR 2.116(C)(10), we review the evidence submitted by the parties in a light most favorable to the nonmoving party to determine whether there is a genuine issue regarding any material fact." Cuddington v United Health Servs, Inc, 298 Mich.App. 264, 270; 826 N.W.2d 519 (2012). Summary disposition is proper 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." West v Gen Motors Corp, 469 Mich. 177, 183; 665 N.W.2d 468 (2003). "Questions of law relative to declaratory judgment actions are reviewed de novo, but the trial court's decision to grant or deny declaratory relief is reviewed for an abuse of discretion." Pioneer State Mutual Ins Co v Dells, 301 Mich.App. 368, 376; 836 N.W.2d 257 (2013).

         Whether defendant is contractually obligated under the Policy to defend or indemnify certain claims is a question of law that requires interpretation of the insurance policy. American Bumper & Mfg Co v Nat'l Union Fire Ins Co, 261 Mich.App. 367, 375; 683 N.W.2d 161 (2004). "[T]he proper construction and application of an insurance policy presents a question of law that is reviewed de novo." Pioneer State Mutual Ins Co, 301 Mich.App. at 376-377. "While the issue of whether the employee was acting within the scope of his employment is generally for the trier of fact, the issue may be decided as a matter of law where it is clear that the employee was acting to accomplish some purpose of his own." Bryant v Brannen, 180 Mich.App. 87, 98; 446 N.W.2d 847 (1989).

         "It is well-established that an insurer has a duty to defend an insured and that such duty is not limited to meritorious suits and may even extend to actions which are groundless, false, or fraudulent, so long as the allegations against the insured even arguably come within the policy coverage." Auto Club Group Ins Co v Burchell, 249 Mich.App. 468, 480-481; 642 N.W.2d 406 (2001) (quotation marks and citation omitted). Additionally, "[a]n insurer has a duty to defend, despite theories of liability asserted against any insured which are not covered under the policy, if there are any theories of recovery that fall within the policy." Detroit Edison Co v Mich. Mut Ins Co, 102 Mich.App. 136, 142; 301 N.W.2d 832 (1980). "In a case of doubt as to whether or not the complaint against the insured alleges a liability of the insurer under the policy, the doubt must be resolved in the insured's favor." Id.

         In determining whether an insurer has a duty to defend its insured, we are required to look at the language of the insurance policy and construe its terms. Allstate Ins Co v Fick, 226 Mich.App. 197, 201-202; 572 N.W.2d 265 (1997). An insurance policy's terms are given their "commonly used meaning" if not defined in the policy. Frankenmuth Mut Ins Co v Masters, 460 Mich. 105, 112; 595 N.W.2d 832 (1999). Unambiguous insurance policy language must be enforced as written. Farm Bureau Mut Ins Co v Nikkel, 460 Mich. 558, 570; 596 N.W.2d 915 (1999). If the policy is ambiguous, it will be construed in favor of the insured to require coverage. Royce v Citizens Ins Co, 219 Mich.App. 537, 542-543, 557 N.W.2d 144 (1996).

         Insurers are free to limit the scope of their liability by excluding particular conduct from coverage. Auto Club Group Ins Co v Daniel, 254 Mich.App. 1, 4; 658 N.W.2d 193 (2002). And while "[e]xclusionary clauses in insurance policies are strictly construed in favor of the insured, " Century Surety Co v Charron, 230 Mich.App. 79, 83; 583 N.W.2d 486 (1998), "[c]overage under a policy is lost if any exclusion in the policy applies to an insured's particular claims, " id (emphasis added). Clear and specific exclusions must be given effect because an insurance company cannot be liable for a risk it did not assume. Auto-Owners Ins Co v Churchman, 440 Mich. 560, 567; 489 N.W.2d 431 (1992).

         Neither of the parties contends that the language of the Policy is ambiguous. Therefore, we will simply apply the policy according to its terms. Notably, in the absence of any ambiguity in the policy language, we need not construe the policy against the insurer. Defendant's obligation to defend an insured against wrongful acts is ...


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