Michigan Court of Appeals; Docket No. 113304; Published
Judges Brennan, Michael J. Kelly, and Cynar; 2-1 (with Judge Kelly, Dissenting)
Official Michigan Reporter Citation: 184 Mich App 271; Link to Opinion 
STATUTORY INDEXING:
Liability Policy Exclusions for Owned and Non-Owned Vehicles [§3131]
TOPICAL INDEXING:
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this 2-1 decision by Judge Brennan, the Court of Appeals affirmed the trial court decision under an owned/non-owned vehicle exclusion denying insurance coverage for plaintiffs decedent's third party claim.
Plaintiffs decedent was killed in a single vehicle accident while a passenger in the truck owned and driven by defendant Craig Fons. The truck was uninsured. Plaintiff sought coverage under Fons' parents' automobile insurance coverage with League General Insurance. League General sought summary disposition arguing that Fons was not an insured under his parents' policies. League General relied upon the owned/non-owned vehicle exclusion contained in the League General insurance policy. Plaintiff contended that this exclusion was invalid under the Supreme Court decision of Powers v DAIIE, 427 Mich 602 (1986) (Item No. 979).
The issue on appeal was whether the owned/non-owned vehicle exclusion contained in the liability section of Fons' parents' insurance policy was void as against public policy because the language was ambiguous and defeated the reasonable expectations of the policyholder.
The court specifically found Powers to be distinguishable on the basis that none of the cases decided in Powers, supra, involved a situation where coverage was sought for the owner of an uninsured motor vehicle involved in an accident under an insurance policy covering a resident relative's automobile.
The grant of coverage language of the policy provided that the persons insured included the named insured and any resident of the same household with respect to the owned automobile. The policy went on to defined owned automobile as "a private passenger automobile . . . described in this policy for which a specific premium charge indicates that coverage is afforded." A non-owned automobile was defined as one "not owned by or furnished for the regular use of either the named insured or any relative."
The Court of Appeals held that since there was no question that Fons owned the truck involved in the accident, the truck was not a "non-owned automobile."
The court further concluded that the relevant language of the insurance policy is clear and unambiguous and therefore could not defeat the reasonable expectations of the insureds. The language of the policy is capable of only one interpretation: that Craig Fons, the owner of the truck which was involved in the accident for which no premium was charged by defendant indicating that coverage was afforded under the policy, i.e., "an owned automobile," was not an insured under the policy issued by the defendant. Judge Kelly dissented and argued that the Supreme Court in Powers, supra, found virtually identical provisions invalid as ambiguous and contrary to the reasonable expectations of the policyholder.
