Michigan Court of Appeals; Docket No. 182631; Unpublished
Judges Michael J. Kelly, Wahls, and Gage; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Cancellation of Auto Liability Policies (MCL 500.3204, et seq.)
Leased / Rented Vehicles
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion dealing with issues of policy cancellation, the Court of Appeals ruled that a car dealership who was listed as a named insured on a vehicle it leased to a customer, was entitled to a jury trial on its claim that the subsequent cancellation of the policy resulting from the customer's nonpayment of premium did not affect the dealership's continued coverage under the policy, because the insurance company had represented to the dealership, in certain documents, that the coverage would continue "until terminated."
The customer of the dealership insured the leased vehicle through ACIA and received a declaration certificate that listed the policy term as March S, 1987 to September 5, 1987. Subsequently, the leased customer did not pay the premiums and the policy was deemed to have expired on its own terms because of nonpayment of premium. However, when the policy was initially acquired, the dealership received a notice of policy coverage indicating that the policy term was "March 5, 1987 until terminated.” The dealership claimed that it never received any notice of cancellation or non-renewal. However, there was testimony that the office manager of the dealership received a copy of the initial certificate of insurance indicating the policy term was March 5, 1987 to September 5, 1987.
On these disputed facts, the Court of Appeals ruled that the issue should be submitted to a jury for resolution. Citing the case of Grable v Farmers Insurance Exchange, 129 Mich App 370 (1983), the court noted that under Michigan law, unless a policy is for a specific term, it may only be terminated through a notice of cancellation. Therefore, there was a disputed question of fact as to whether the dealership ever received notice that the policy was for a specific term, thus making summary disposition inappropriate.
The court then analyzed a second policy issued by Hastings Mutual Insurance Company for purposes of determining whether it would provide PIP coverage to a pedestrian who was injured in the subject accident. That policy clearly excluded leased vehicles from liability coverage, but the PIP endorsement did not exclude leased vehicles from PIP coverage. However, an insurance agent who sold the Hastings policy testified that it was not intended to provide any coverage for leased vehicles. Under these circumstances, the court ruled that an ambiguity existed with respect to the exclusion of the leased vehicles, the resolution of which would require a determination of the insurance agent's credibility. Such a determination is not a proper subject of summary disposition and therefore the case should be submitted to the jury.
