Michigan Court of Appeals; Docket Nos. 201049,201050, and 201051; Unpublished
Judges Whitbeck, MacKenzie, and Murphy; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Uninsured Motorist Benefits
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals held that plaintiff uninsured motorist claimants had standing to challenge defendant Allstate's decision to provide liability insurance coverage to a third-party tortfeasor, which decision would have had the effect of defeating plaintiff’s claim for uninsured motorist benefits with defendant Allstate. In this case, defendant Allstate "wore two hats." It was plaintiff’s uninsured motorist carrier and it was also the alleged insurer of the at-fault party. However, plaintiff claimed that under the terms of the tortfeasor's insurance policy with Allstate, the tortfeasor was not insured, because he was driving an unscheduled vehicle that was owned and/or otherwise made available for the regular use of the named insureds. Therefore, the non-owned vehicle exclusion rendered this vehicle uninsured by the very terms of the Allstate policy. Allstate argued that it could retroactively create liability coverage for the tortfeasor by applying a gratuitous "grace period" courtesy extended by Allstate to its customers who acquire new vehicles but do not specifically insure them until sometime later.
The trial court ruled that plaintiff did not have standing to challenge defendant Allstate's decision to extend liability coverage to the tortfeasor. The Court of Appeals reversed, and held that plaintiffs had standing to challenge Allstate's decision to extend coverage because "plaintiffs had a legally protected interest under their own policies with defendant, and they had standing to challenge the insurance company's decision not to enforce its absolute defense of liability against this insured.... We further believe that plaintiffs also have standing as injured parties. This Court has recently held that an injured party may bring an action against an insurance agent on a third-party beneficiary theory. Because the insurance coverage was for the direct benefit of third parties who may be injured through the insureds negligence, plaintiffs, as injured third parties, were intended beneficiaries of the insurance contract."
After finding that plaintiffs had standing, the Court of Appeals agreed with plaintiffs' interpretation of the Allstate Insurance contract, and held that the tortfeasor did not have coverage under this contract because of the "non-owned vehicle exclusion." Because the terms of the Allstate policy plainly and unambiguously excluded coverage to the tortfeasor, Allstate could not alter the terms of the written policy by unilaterally attempting to apply a self-serving corporate policy regarding grace periods where the same would have the effect of defeating plaintiffs' contractual rights to recover uninsured motorist benefits.
