FARM BUREAU INSURANCE COMPANY, Subrogee of JEFF FURNESS, FREDRIC WILSON, KENNY MALBURG'S LANDSCAPING, INC., and TIMOTHY DEMARAY, and PIONEER MUTUAL INSURANCE COMPANY, Subrogee of JAY D. FERGUSON, AMANDA FERGUSON, D & R HENNE FARMS, INC., and DOROTHY WALTON and LYNN WALTON, doing business as WALTON FARMS, and HASTINGS MUTUAL INSURANCE COMPANY, Subrogee of JAMES T. YOUNG, SHELLY YOUNG, MARVIN HILL, LOIS HILL, CLIFFORD C. KESSLER, and SHIRLEY KESSLER, Plaintiffs-Appellees,
TNT EQUIPMENT, INC., Defendant, and EMPLOYERS MUTUAL CASUALTY COMPANY, Defendant-Appellant.
Sanilac Circuit Court LC No. 16-036858-NZ
Before: Murray, C.J., and Gadola and Tukel, JJ.
Employers Mutual Casualty Company (Employers), appeals as of
right the order of the trial court dismissing without
prejudice defendant, TNT Equipment, Inc. (TNT), and
challenges the earlier orders of the trial court granting
plaintiffs' motion for summary disposition, while denying
Employers' motions for summary disposition and for
reconsideration. We reverse the order of the trial court
granting plaintiffs summary disposition, and remand to the
trial court for entry of summary disposition in favor of
case arises from a fire that occurred at a storage facility
owned by TNT in Sandusky, Michigan, on April 5, 2016.
Plaintiffs are insurance companies. The parties do not
dispute that plaintiffs' insureds owned farm equipment
that was stored at the TNT facility at the time of the fire,
and that plaintiffs, having paid claims to their insureds for
the damaged farm equipment, are now subrogees of the rights
of their insureds.
time of the fire, Employers had issued to TNT a
"Commercial Inland Marine" policy of insurance that
was then in effect. Plaintiffs sought reimbursement from
Employers for the amounts they had paid to their insureds for
the damaged farm equipment, contending that plaintiffs'
insureds were entitled to coverage under Employers'
policy with TNT, and that plaintiffs were therefore entitled,
as subrogees, to payment from Employers. Employers declined
to pay plaintiffs. Employers explained that TNT had exercised
an option under the policy directing Employers "to pay
for their [TNT's] customer's deductibles and
verifiable uninsured losses only." Employers determined
that because TNT had opted out of any other coverage, it was
not obligated to pay any other amounts for damages to the
farm equipment belonging to plaintiffs' insureds.
as subrogees of their insureds, initiated this lawsuit,
alleging counts against TNT for breach of bailment contracts,
breach of implied warranty, negligence, gross negligence, and
warehouse liability. Plaintiffs also asserted claims against
Employers, seeking first-party insurance benefits under
Employers' policy with TNT, and alternatively, seeking
benefits under the policy as third-party beneficiaries. The
parties filed cross-motions for summary disposition under MCR
2.116(C)(8), (9), and (10), regarding whether plaintiffs had
a right to enforce the policy and claim benefits from
Employers directly under the insurance policy. The trial
court concluded that plaintiffs' insureds were entitled
to the status of "additional insureds" under the
policy, and therefore were entitled to enforce the policy
against Employers. The trial court then granted plaintiffs
summary disposition under MCR 2.116(C)(10), while denying
Employers summary disposition. The trial court thereafter
denied Employers' motion for reconsideration.
trial court also entered an order dismissing TNT from the
case without prejudice.Employers now appeals to this Court from
the trial court's final order dismissing TNT, challenging
the earlier orders of the trial court granting plaintiffs
summary disposition and denying Employers' motions for
summary disposition and for reconsideration.
STANDARD OF REVIEW
Court reviews de novo a trial court's decision to grant
or deny summary disposition. Johnson v Vanderkooi,
502 Mich. 751, 761; 918 N.W.2d 785 (2018). When reviewing an
order granting summary disposition under MCR 2.116(C)(10), we
consider all documentary evidence submitted by the parties in
the light most favorable to the nonmoving party. Dawoud v
State Farm Mut Auto Ins Co, 317 Mich.App. 517, 520; 895
N.W.2d 188 (2016). Summary disposition under MCR 2.116(C)(10)
is warranted when there is no genuine issue as to any
material fact and the moving party is entitled to judgment as
a matter of law. Id. We also review de novo issues
involving the proper interpretation of statutes and
contracts. Titan Ins Co v Hyten, 491 Mich. 547, 553;
817 N.W.2d 562 (2012). This Court reviews a trial court's
decision to grant or deny a motion for reconsideration for an
abuse of discretion. Sanders v McLaren-Macomb, 323
Mich.App. 254, 264; 916 N.W.2d 305 (2018). Atrial court
abuses its discretion if it chooses an outcome outside the
range of principled outcomes. Id.
contends that the trial court erred in granting plaintiffs
summary disposition because plaintiffs are not entitled to
enforce the insurance policy between Employers and TNT.
Employers first argues that plaintiffs' insureds were not
insureds under the policy issued to TNT by Employers, and
therefore lacked standing to pursue first-party benefits
under the policy, and that plaintiffs, as subrogees of their
insureds, likewise lack standing to seek first-party benefits
under the policy. We agree.
insurance policy, like other contracts, is an agreement
between parties; a court's task is to determine what the
agreement is and then give effect to the intent of the
parties. Waldan Gen Contractors, Inc v Michigan Mut Ins
Co, 227 Mich.App. 683, 686; 577 N.W.2d 139 (1998). In
doing so, we consider the contract as a whole and give
meaning to all terms of the contract. Auto-Owners Ins Co
v Churchman, 440 Mich. 560, 566; 489 N.W.2d 431 (1992).
We give the policy language its ordinary and plain meaning,
and where policy language is clear, we are bound by the
language of the policy. Waldan, 227 Mich.App. at
insurance policy is a contractual agreement between the
insured and the insurer. West American Ins Co v Meridian
Mut Ins Co, 230 Mich.App. 305, 310; 583 N.W.2d 548
(1998). Payment of benefits from one's own insurer
generally is referred to as payment of first-party benefits.
See Nickola v MIC Ins Co, 500 Mich. 115, 127; 894
N.W.2d 552 (2017) ("the insured by definition is a party
to the insurance contract, not a third party.") This
Court has suggested that a "first-party" insured is
the insured under a policy, or an individual or entity
directly entitled to benefits under the insured's
insurance policy. See GriswoldProperties, LLC v Lexington
Ins Co, 276 Mich.App. 551, 565; 741 N.W.2d 549 (2007).
case, TNT purchased from Employers a policy of commercial
inland marine insurance. The parties do not dispute that
plaintiffs' insureds were not parties to the policy
between TNT and Employers, and that plaintiffs' insureds
are not named insureds under that policy. There further is no
dispute that the policy does not expressly grant anyone other
than the named insured enforcement rights. Plaintiffs'
insureds, therefore, had no express contractual rights under
the policy and are not entitled to "first-party"
benefits. The question, then, is whether plaintiffs'
insureds, though not named insureds under the policy, are
nonetheless entitled to seek to enforce the policy.
argue, and the trial court found, that plaintiffs'
insureds were entitled to enforce the contract as
"additional insureds" under TNT's policy with
Employers. An "additional insured" is defined
generally as "[s]omeone who is covered by an insurance
policy but who is not the primary insured. An additional
insured may, or may not, be specifically named in the
policy." Black's Law Dictionary (1
ll ed). Plaintiffs in this case do not contend
that the policy here designated plaintiffs' insureds as
"additional insureds" under the policy, and point
to no published Michigan authority supporting their position
that they qualify as additional insureds absent a provision
in the policy designating them as such. ...