Michigan Court of Appeals; Docket #254333; Unpublished
Judges Bandstra, Neff, and Donofrio; 2-1 (Judge Neff dissenting); per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Underinsured Motorist Benefits: Underinsured Motorist Coverage in General
CASE SUMMARY:
In this 2-1 unpublished per curiam opinion, Judge Neff dissenting, the Court of Appeals held where the insured settled his tort claim against the owner and driver of the other vehicle for policy limits, and executed a release, but failed to obtain the prior consent of the insurance company providing underinsurance coverage for the loss, as was required by the policy, the trial court correctly dismissed the claim.
Defendant Bott was injured in a motor vehicle accident while driving his employer’s vehicle. His employer provided coverage for no-fault benefits as well as worker’s compensation benefits through Cincinnati Insurance Company. Those benefits were paid by Cincinnati. Bott made a claim for damages against the owner and driver of the other vehicle which was insured by the owner through Allied Insurance for $100,000. His claim was settled for the policy limits and Bott executed a release. Prior to the settlement of the residual bodily injury claim, Bott determined and obtained acknowledgment from Cincinnati it would not seek reimbursement of worker’s compensation payments previously made to Bott. After the settlement, Bott then made a claim for underinsured motorist benefits from Cincinnati. The Court of Appeals upheld the trial court determination that by failing to obtain prior consent to this residual bodily injury claim settlement, coverage was excluded under the terms of the policy which provide that coverage is excluded for “any claim settled without our consent.” Although Bott’s attorney did inform Cincinnati’s claims adjuster of Bott’s intention to settle the case against Allied for policy limits, the adjuster did not inform Bott’s counsel of the policy requirement that plaintiff consent to the proposed settlement. There was no dispute Bott did not obtain Cincinnati’s prior express consent before settling.
The Court of Appeals rejected Bott’s argument that there was a question of fact concerning whether Cincinnati waived or was estopped from asserting the consent requirement by failing to alert defendant of the requirement of prior consent. The Court of Appeals held that under Naparstek v Citizens Mutual Insurance Company, 19 Mich App 53 (1969), it was held an insured must be presumed to have known the terms and conditions of the policy and, under these circumstances, the adjuster’s failure to alert defendant’s counsel concerning the terms of the policy is not a basis for application of the principles of waiver or estoppel. The court also rejected defendant’s argument that under certain circumstances silence permits an inference of consent. The court held an insurer’s mere silence is not a waiver of the right to approve a settlement.
Judge Neff in her dissent points out the claimant is an employee who was injured in a work-related accident. As an employee, he would not typically have access to his employer’s policies of insurance. Equity in this case favors coverage.
