Michigan Court of Appeals; Docket No. 94304; Published
Judges Walsh, Wahls, and Giddings; Unanimous; Per Curiam
Official Michigan Reporter Citation: 164 Mich App 28; Link to Opinion
In the second of two "special relationship" decisions issued on this date, the Court of Appeals affirmed summary disposition in favor of defendant, holding that there was no special relationship between the parties such that defendant had a duty to advise plaintiffs about the adequacy of their insurance coverage.
The Court of Appeals in this case apparently did not find the facts compelling enough to determine that a special relationship existed such as to impose a duty to advise plaintiffs concerning their insurance coverage.
Plaintiff was seriously injured in a hit-and-run accident in 1984. The no-fault automobile policy issued by defendant to plaintiff had been renewed each year since 1975. Each year plaintiff had received a declaration page from defendant specifying the coverage afforded under the policy. In 1980, the declaration page deleted coverage for uninsured motorist protection and included a notation in bold print stating that the uninsured motorist coverage had been removed from the policy but was available upon request. A letter was enclosed with the declaration sheet further explaining the deletion of uninsured motorist coverage, and advising of its availability.
In her deposition, plaintiff acknowledged having received and retained the letter that was enclosed with the 1980 declaration page; however, she claimed not to have understood it.
The Court held that an insurance agent does not generally have an affirmative duty to advise a client regarding the adequacy of coverage. However, a duty to advise may arise when a "special relationship" exists between the insurance company or its agent and the policyholder. In support of the special relationships rule, the Court of Appeals cited the cases of Palmer v Pacific Indemnity Company, 74 Mich App 259 (1977), leave denied, 401 Mich 808 (1977); and Stein v Continental Casualty Company, 110 Mich App 410 (1981), leave denied, 414 Mich 853 (1982).
In reaching its conclusion in this case, the Court of Appeals noted the difficulty in deriving an absolute rule of law from the cases. However, it is apparent that something more than the standard policyholder-insurer relationship is required in order to create a question of fact as to the existence of a "special relationship." There must be, in a longstanding relationship, some type of interaction on a question of coverage, with the insured relying on the expertise of the insurance agent to the insured's detriment.