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Estate of Hunt v. Drielick

Court of Appeals of Michigan

December 14, 2017

ESTATE OF EUGENE WAYNE HUNT, by MARIE HUNT, Personal Representative, Plaintiff/Counter-Defendant/Garnishor-Plaintiff-Appellee,
v.
ROGER DRIELICK, doing business as ROGER DRIELICK TRUCKING, Defendant/Counter-Plaintiff/Cross-Plaintiff/Cross-Defendant-Appellee, and COREY DRIELICK, Defendant/Counter-Plaintiff/Cross-Plaintiff/Cross-Defendant-Appellee, and GREAT LAKES CARRIERS CORP., Defendant/Cross-Defendant-Appellee, and GREAT LAKES LOGISTICS & SERVICES, INC., and MERMAID TRANSPORTATION, INC., Defendants, and SARGENT TRUCKING, INC., Defendant/Cross-Plaintiff-Appellee, and EMPIRE FIRE AND MARINE INSURANCE COMPANY, Garnishee-Defendant-Appellant. BRANDON JAMES HUBER, Plaintiff/Garnishor-Plaintiff-Appellee,
v.
COREY A. DRIELICK and ROGER DRIELICK, doing business as ROGER DRIELICK TRUCKING, Defendants/Counter-Plaintiffs/Cross-Plaintiff/Cross-Defendant-Appellees, and GREAT LAKES CARRIERS CORP., Defendant/Cross-Defendant-Appellee, and GREAT LAKES LOGISTICS & SERVICES, INC., and MERMAID TRANSPORTATION, INC., Defendants, and SARGENT TRUCKING, INC., Defendant-Appellee, and EMPIRE FIRE AND MARINE INSURANCE COMPANY, Garnishee-Defendant-Appellant. THOMAS LUCZAK and NOREEN LUCZAK, Plaintiffs/-Garnishor-Plaintiffs-Appellees,
v.
COREY A. DRIELICK and ROGER DRIELICK, doing business as ROGER DRIELICK TRUCKING, Defendants/Counter-Plaintiff/Cross-Plaintiffs/Cross-Defendant-Appellees, and GREAT LAKES CARRIER CORP., Defendant/Cross-Defendant-Appellee, and GREAT LAKES LOGISTICS & SERVICES, INC., and MERMAID TRANSPORTATION, INC., Defendants, and SARGENT TRUCKING, INC., Defendant-Appellee, and EMPIRE FIRE AND MARINE INSURANCE COMPANY, Garnishee-Defendant-Appellant.

         Bay Circuit Court LC Nos. 96-003280-NI, 97-003238-NI, 96-003328-NI

          Before: M. J. Kelly, P.J., and Ronayne Krause and Boonstra, JJ.

          Boonstra, J.

         In these consolidated cases, garnishee-defendant Empire Fire and Marine Insurance Company (Empire) appeals by right the June 2, 2016 final judgments entered by the trial court in favor of garnishor-plaintiffs Marie Hunt (as personal representative of the estate of Eugene Wayne Hunt) (Hunt), Brandon James Huber (Huber), and Thomas and Noreen Luczak (the Luczaks) (together, plaintiffs or garnishor-plaintiffs)[1] holding Empire liable for the amounts of consent judgments that had been entered into in three underlying cases against defendants Roger Drielick d/b/a Roger Drielick Trucking (Drielick Trucking)[2] and Corey Drielick, plus prejudgment and postjudgment interest. The trial court had entered a separate but similar judgment in each underlying case; the judgments differed only in respect to the amount awarded to each plaintiff. Empire challenges the trial court's October 1, 2015 written opinion, issued in all three cases, holding that insurance coverage for a multivehicle accident was not precluded under the leasing clause of a business-use exclusion in an "Insurance for Non-Trucking Use" policy issued by Empire to Drielick Trucking. Empire also challenges the trial court's decision to award garnishor-plaintiffs statutory interest in excess of Empire's policy limits. We affirm in part, vacate in part, and remand for further proceedings.

         I. PERTINENT FACTS AND PROCEDURAL HISTORY

         A. BUSINESS USE EXCLUSION

         This case has a lengthy procedural history involving multiple prior appeals. Relevant to this appeal, our Supreme Court remanded the case to the trial court "for further fact-finding to determine whether Drielick Trucking and [GLC] entered into a leasing agreement for the use of Drielick Trucking's semi-tractors as contemplated under the policy's clause related to a leased covered vehicle." Hunt v Drielick, 496 Mich. 366, 369; 852 N.W.2d 562 (2014).

         In Hunt, the trial court had concluded that the business-use exclusion did not preclude coverage, even if there was a lease between Drielick Trucking and GLC. Hunt, 496 Mich. at 371. This Court disagreed, holding that the first clause of the business-use exclusion, which precluded coverage if injury or damage occurred "while a covered 'auto' is used to carry property in any business, " applied despite the fact that the truck was not actually carrying property at the moment of the accident. Hunt v Drielick, 298 Mich.App. 548, 555-557; 828 N.W.2d 441 (2012), rev'd 496 Mich. 366 (2014).[3] Our Supreme Court granted garnishor-plaintiffs' applications for leave to appeal. Hunt v Drielick, 495 Mich. 857; 836 N.W.2d 684 (2013).

         Our Supreme Court set forth the following relevant facts:

Roger Drielick owns Drielick Trucking, a commercial trucking company. It seems that throughout most of the year in 1995, Drielick Trucking leased its semi-tractors to Sargent Trucking (Sargent). Around October 1995, Roger orally terminated the lease agreement with Sargent and began doing business with Bill Bateson, one of the operators of GLC, the other being his wife at the time, Jamie Bateson.
On January 12, 1996, Bill Bateson dispatched Corey Drielick, a truck driver employed by Drielick Trucking, to pick up and deliver a trailer of goods stored on GLC's property. While driving the semi-tractor without an attached trailer, Corey picked up his girlfriend and proceeded to GLC's truck yard.[4]When he was less than two miles away from the yard, Corey was involved in a multivehicle accident. Eugene Hunt died and Noreen Luczak and Brandon Huber were seriously injured.
Marie Hunt (on behalf of her deceased husband), Thomas and Noreen Luczak, and Huber filed suits against Corey and Roger Drielick, Drielick Trucking, Sargent, and GLC. Empire, which insured Drielick Trucking's semi-tractors under a non-trucking-use or bobtail, policy, denied coverage and refused to defend under the policy's business-use and named-driver exclusions. Plaintiffs settled with Sargent and GLC. Plaintiffs later entered into consent judgments with the Drielicks and Drielick Trucking.[5] The parties entered into an "Assignment, Trust, and Indemnification Agreement, " wherein they agreed that Roger Drielick would assign the rights under the insurance policy with Empire to plaintiffs, Sargent, and GLC. Sargent and GLC agreed to help plaintiffs' collection efforts from Empire in exchange for a portion of any proceeds received from Empire.
Sargent and GLC filed writs of garnishment against Empire. In response, Empire filed a motion to quash, arguing again that the policy exclusions apply, among other things. The trial court denied Empire's motion and entered an order to execute the consent judgments, reasoning that the business-use exclusion does not apply and the named-driver exclusion is invalid under MCL 500.3009(2). The Court of Appeals affirmed the trial court's ruling regarding the named-driver exclusion but reversed the trial court's ruling regarding the business-use exclusion, holding that further factual determinations were necessary because the fact that the semi-tractor "was traveling bobtail at the time of the accident, creat[ed] a question of fact whether the truck was being used for a business purpose at that time." Hunt v Drielick, unpublished opinion per curiam of the Court of Appeals, issued October 5, 2004 (Docket Nos. 246366, 246367, and 246368), p 5[, 2004 WL 2238628)]. The Court mentioned that the policy exclusions are clear but "whether this accident was a covered event is not, " explaining that Roger Drielick orally revoked his lease with Sargent, and, contrary to federal regulations, there was no written lease with GLC. [Hunt, 496 Mich. at 369-371.]

         In reversing this Court's decision, the Supreme Court concluded that the first clause of the business-use exclusion precludes coverage only if the covered vehicle is carrying attached property and that, because it was undisputed that the semi-tractor was not carrying attached property at the time of the accident, the first clause did not preclude coverage in this case. Hunt, 496 Mich. at 376, 379. The Court further stated:

Because we hold that the first clause of the business-use exclusion does not preclude coverage, it is necessary to determine whether the second clause does. After considering the record in light of the trial court's prior factual findings, we conclude that this case requires that the trial court make further findings of fact.
It is clear that Drielick Trucking and the Batesons did not enter a written lease regarding the use of Drielick Trucking's semi-tractors, contrary to federal regulations. Because Drielick Trucking's and the Batesons' business relationship was in direct contravention of applicable federal regulations, our order granting leave to appeal focused primarily on the potential lease agreement and whether the Court of Appeals should have, instead, resolved this case under the policy's leasing clause.
Apparently considering that clause, the trial court previously explained that the parties had agreed that there are no material issues of fact in dispute; however, that does not appear to be the case. Bill and Jamie Bateson operated Great Lakes Logistics & Services (GLLS). In addition to the carrier company, GLC, GLLS was a brokerage company that connected semi-tractor owners, such as Roger Drielick, with carriers that are federally authorized to transport goods interstate, such as GLC. The parties dispute whether Bill Bateson dispatched Corey under GLC's authority or merely brokered the deal under GLLS's authority. Furthermore, the trial court considered the parties' "verbal agreement and course of conduct, " concluding that the payment terms and the fact that Corey was not bound by a strict pick-up deadline meant that the business relationship was not triggered until Corey actually picked up for delivery the trailer of goods. Yet it remains uncertain whether the parties entered into a leasing agreement as contemplated by the terms of the insurance policy. Barring GLLS's alleged involvement, an oral arrangement between or course of conduct might have existed between GLC and Drielick Trucking but whether that agreement constituted a lease for the purposes of the policy is a threshold determination that has not yet been fully considered.
Accordingly, we direct the trial court on remand to consider the parties' agreement to decide whether there was, in fact, a lease agreement between Drielick Trucking and GLC as contemplated by the business-use exclusion's leasing clause. If so, the precise terms of that agreement must be determined, and the trial court should reconsider whether Corey was acting in furtherance of a particular term of the leasing agreement at the time of the accident. [Id. at 379-381.]

         On remand, the trial court held that there was no lease agreement as contemplated by the leasing clause of the business-use exclusion, and that Corey Drielick was not acting in furtherance of a particular term of any leasing agreement at the time of the accident. Therefore, the court again concluded that the leasing clause of the business-use exclusion did not preclude coverage under the insurance policy between Drielick Trucking and Empire.

         B. JUDGMENT INTEREST

         Thereafter, garnishor-plaintiffs filed a motion for entry of judgment against Empire, seeking a judgment that Empire was liable for payment of the amounts owing under the consent judgments, including statutory interest. Empire argued that its liability for payment of the liabilities under the consent judgments was limited to the $750, 000 policy limits because the policy contains no provision for the payment of prejudgment interest in excess of policy limits, and because the policy's "Supplementary Payments" provision contains an interest clause that provides that postjudgment interest will be paid only in suits in which Empire assumes the defense. In other words, Empire argued that it was not obligated to pay postjudgment interest because it did not defend the underlying suits. The trial court found that Empire had breached its duty to defend under the policy and that the breach had negated the provision in the policy that limited the payment of judgment interest to those suits in which Empire had assumed the defense. The trial court entered final orders of judgment inclusive of statutory judgment ...


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