Michigan Court of Appeals; Docket # 345655; Unpublished
Judges Riordan, Sawyer, and Jansen; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Interpretation of Insurance Contracts
Underinsured Motorist Coverage in General
SUMMARY:
In this unanimous unpublished per curiam decisions, the Court of Appeals upheld the trial court’s dismissal of plaintiff’s action. In so holding, the Court determined that the plaintiffs’ auto insurance policy with Geico Indemnity Company did not provide underinsured motorist coverage, and that it was not reasonable for the plaintiffs to rely on oral representations made by Geico’s agents because the policy unambiguously excluded UIM coverage and explicitly stated that the “terms of the policy [could not] be changed orally.” Given that the policy expressly stated that the policy could not be changed orally, the Court rejected the plaintiffs’ argument that any oral representations made by GEICO agents entitled plaintiff to coverage not otherwise supported by the plain language in the policy.
Plaintiffs purchased a no-fault insurance policy from Geico in 2013 and requested that it include both uninsured and underinsured motorist coverage. The policy only explicitly provided UM coverage, however, and contained the following definition of “uninsured auto”:
Uninsured auto is a motor vehicle which has no bodily injury liability bond or insurance policy applicable with liability limits complying with the financial responsibility law of the state in which the insured auto is principally garaged at the time of an accident. This term also includes an auto whose insurer is or becomes insolvent or denies coverage.
The term uninsured auto does not include:
(a) An insured auto . . . .
In 2016, the plaintiffs were injured in a motor vehicle collision, and brought a third-party action against the other driver, whose insurance policy provided only the statutory minimum limits of liability coverage. Plaintiffs then contacted Geico regarding UIM coverage, and Geico’s agents stated, in recorded phone calls, that UM and UIM coverages were combined in the policy. Geico subsequently denied that its policy provided UIM coverage, however, and that the plaintiffs could not rely on oral representations by its agents because of a merger clause in the policy that stated, “The terms of this policy cannot be changed orally.”
The plaintiffs brought an action against Geico to recover UIM benefits under theories of breach of contract, promissory estoppel, fraud, and negligent misrepresentation. The trial court granted summary disposition in favor of Geico because “the policy was not ambiguous and did not provide UIM coverage, and that plaintiffs could not rely on theories of promissory estoppel, fraud, or negligent misrepresentation to obtain this coverage.” The Court of Appeals agreed.
Plaintiffs first argued that the insurance policy was ambiguous and that the trial court erred by ignoring extrinsic evidence showing that UM and UIM coverages were combined in the policy. For instance, Plaintiffs highlighted a statement on Geico’s website describing “uninsured coverage” as coverage “for injuries caused by motorists who don’t carry sufficient coverage for the extent of your damages.” The Court refused to consider extrinsic evidence, however, because the policy was not ambiguous and expressly denied coverage for “insured auto[s]” in the declarations page.
The Geico policy is unambiguous. The declarations page states that it provides UM coverage to the limit of $250,000 per person and $500,000 per occurrence, but it does not state that it provides UIM coverage. Moreover, the policy’s definition of “uninsured auto” expressly states that the term does not include “[a]n insured auto . . . .” Thus, the policy cannot be read as allowing the UM coverage to apply to an insured auto that is underinsured. Plaintiffs argue that the policy is ambiguous because it does not contain a definition of “underinsured” motorist, but it excludes punitive and exemplary damages from “underinsured” coverage. Plaintiffs’ argument implies that an exclusion in an insurance policy can create a category of coverage, in this case UIM coverage, that is otherwise omitted in the policy, by stating that the exclusion applies to the omitted category as well as the included categories. “[E]xclusionary clauses limit the scope of coverage provided under the insurance contract; they do not grant coverage.” Hawkeye-Security Ins Co v Vector Constr Co, 185 Mich App 369, 384; 460 NW2d 329 (1990). Disavowing punitive damages for both UM and UIM coverage does not create UIM coverage that was not provided in the policy.
Plaintiffs argue that Geico’s online statement describing “uninsured coverage” as coverage “for injuries caused by motorists who don’t carry sufficient coverage for the extent of your damages” should be consulted in order to construe the intended meaning of UM coverage within the policy. However, the online statement is extrinsic evidence that cannot be considered to alter the terms of the policy because the policy is not ambiguous. Plaintiffs’ reliance on an online claim form that includes a section for UM and UIM benefits is similarly misplaced because it too is extrinsic evidence. Because the policy is not ambiguous and there is no genuine issue of fact regarding whether the terms of the policy provide for UIM coverage, the trial court properly granted summary disposition for Geico with respect to plaintiffs’ claim for breach of contact.
The Court similarly rejected each of the plaintiffs other claims, finding that it was not reasonable for the plaintiffs to rely on oral representations made by Geico’s agents when the policy was clear in that it did not provide UIM coverage. Moreover, the plaintiffs periodically renewed their coverage for more than two years before the motor vehicle collision in 2016.
Geico’s declarations page indicated that plaintiffs had only UM coverage, not UIM coverage, and the written policy’s definition of “uninsured auto” expressly excluded insured autos. Consequently, it was not reasonable for plaintiffs to rely on Geico’s agents’ oral representations that the policy included UIM coverage. Plaintiffs received their first written policy in 2013, and they periodically renewed it until the time of their accident in January 2016. Accordingly, there is no genuine issue of material fact that plaintiffs had a reasonable opportunity to review the policy and should have been aware that it did not provide UIM coverage. Thus, they could not reasonably continue to rely on any prior oral statements to expand the scope of coverage unambiguously stated in the policy. For this reason, plaintiffs’ fraud claim fails. Barclae v Zarb, 300 Mich App 455, 476; 834 NW2d 100 (2013) (“[c]ommon- law fraud or fraudulent misrepresentation entails a defendant making a false representation of material fact with the intention that the plaintiff would rely on it, the defendant either knowing at the time that the representation was false or making it with reckless disregard for its accuracy, and the plaintiff actually relying on the representation and suffering damage as a result” and “[a] claim for negligent misrepresentation requires plaintiff to prove that a party justifiably relied to his detriment on information prepared without reasonable care by one who owed the relying party a duty of care”).
Additionally, plaintiffs’ claim of negligent misrepresentation fails because plaintiffs’ evidence does not establish that Geico’s agent undertook any duty by going beyond presenting the product and taking plaintiffs’ order. Zaremba Equip, 280 Mich App 16 (an insurance agent whose principal is the insurance company owes no duty to advise a potential insured about any coverage because the agent’s job consists merely of presenting the product of his principal and taking orders as can be secured from those who want to purchase the coverage offered). Viewing the evidence in a light most favorable to plaintiffs, Geico’s agents orally informed plaintiffs that Geico’s policy provided the same coverage that plaintiffs had with their prior insurer, including UIM coverage. Moreover, even if Geico’s agents negligently misrepresented that its policy provided the same coverage that plaintiffs had under their old policy, once plaintiffs received the written policy and had a reasonable time to review it, they should have discovered that it unambiguously did not provide UIM coverage. Thus, they were not justified in continuing to believe that the policy provided UIM coverage, particularly when they continued to renew the policy thereafter. Consequently, Geico was entitled to summary disposition with respect to plaintiffs’ claim for negligent misrepresentation.
