Michigan Court of Appeals; Docket #347762; Unpublished
Judges Murray, Jansen, and Markey; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Calculation of PPI Benefits [§3121(3)-(5)]
TOPICAL INDEXING:
Not Applicable
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing the plaintiff’s first-party action to recover property protection insurance benefits. The Court of Appeals held that the plaintiffs were only entitled to recover the cash value for their damaged property, as opposed to the cash value for their entire property, even though a local ordinance precluded them from repairing the property after the subject motor vehicle collision, thus leaving the entire property inoperable. Furthermore, the Court of Appeals held that plaintiffs’ loss of use damages under the no-fault act were limited to damages for lost profits, and that since plaintiffs failed to present any evidence that their business was profitable, they were precluded from recovering any such damages.
Jimmie A, LLC owned a building that was leased to the Newport Inn for use as a bar and grill. A tow-truck driver for Mainstay Motors crashed into the building, causing extensive damage, and prompting Jimmie A, LLC and Newport Inn (collectively, “plaintiffs”) to file the underlying action against Mainstay Motors’ no-fault insurer, Consolidated Insurance Company (CIC) for PPI benefits. The trial court ultimately granted summary disposition in Mainstay Motors’ favor.
On appeal, the plaintiffs first argued that they were entitled to recover the actual cash value for their entire property, not just the actual cash value for their damaged property. As a result of a local ordinance, the plaintiffs were not allowed to repair their damaged property because the building sat too close to the road, so they argued that they were “essentially being punished for their failure to purchase ordinance and law insurance coverage.” The Court of Appeals rejected this argument, noting that “CIC is not responsible for plaintiffs’ choices regarding insurance coverage, and plaintiffs fail to establish that CIC is responsible to pay the actual cash value of the entire property where it has become unusable to plaintiffs.”
The plaintiffs next argued that their loss of use damages should not have been limited to damages for lost profits, but rather should have been “construed more broadly in order to include such losses as lost profits, loss of goodwill, loss of the anticipated benefit of the bargain, and loss of an investment.” The Court of Appeals noted that its prior interpretation of MCL 500.3121(5) in Michigan Mut. Ins. Co. v. CNA Ins. Co., 181 Mich. App. 376 (1989) is still controlling, and that, in Michigan Mut. Ins. Co., it “determined that loss of use damages meant damages for business interruption like the amount of lost profits.” Thus, plaintiffs’ argument that loss of use damages should be construed more broadly was without merit.
Their primary argument seems to be that they have lost the use of the building as both a rental property and bar and grill because of the damage sustained to the building. However, as previously discussed, these losses would have been compensable under plaintiffs’ own insurance policy if plaintiffs had purchased ordinance and law insurance coverage. Plaintiffs’ failure to do so does not make such damages compensable under the no-fault act. Therefore, the trial court’s ruling on defendant’s motion in limine is not an abuse of discretion.
Lastly, plaintiffs argued that there was a genuine issue of material fact as to whether they were, in fact, profitable, which precluded summary disposition. The Court of Appeals again disagreed, holding that plaintiffs failed to present sufficient evidence to create a genuine issue of material fact regarding their profitability.
The Newport Inn’s tax returns for the years 2012 through 2016 demonstrate that the business lost, rather than made, money. The Newport Inn lost $117,179 in 2012, $22,276 in 2013, $64,450 in 2014, $76,866 in 2015, and $32,346 in 2016. A profit and loss statement for the Newport Inn for the year 2016, shows a loss of $21,541. The only evidence submitted by plaintiff to demonstrate they were profitable businesses was an unsworn letter from an accountant, which fails to actually state that the businesses were profitable. Jimmie A similarly failed to put forth any proofs demonstrating that it was a profitable business.
“Before lost profits are recoverable, they must be proven with a reasonable degree of certainty as opposed to being based on mere conjecture or speculation.” Body Rustproofing, Inc v Michigan Bell Telephone Co, 149 Mich App 385, 390; 385 NW2d 797 (1986). Plaintiffs essentially rely on a “mere pledge” that their accountant would testify favorably at trial. This is speculative at best, and not enough to survive a motion for summary disposition. Plaintiffs needed to set forth some facts to demonstrate that there was a genuine issue of material facts yet failed to do so. Therefore, the trial court properly granted summary disposition in favor of defendant.
