Michigan Court of Appeals; Docket #309837; Unpublished
Judges Borrello, Servitto, and Beckering; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Reformation of Insurance Contracts
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion concerning the reformation of a no-fault insurance contract, the Court of Appeals held there was no legal basis for changing the effective date of plaintiff’s contract so that plaintiff was entitled to coverage because there was not a “mutual mistake” between the insured and the insurer regarding the effective date of the policy. As a result, the Court of Appeals vacated the trial court’s judgment that had reformed the contract and that had awarded plaintiff more than $1.1 million in damages.
On Nov. 19, 2004, Charlotte Morse sought no-fault insurance coverage for a vehicle through Adrian Insurance Agency and paid a six-month premium for a policy issued by defendant Titan Insurance. The policy was made effective Nov. 25, rather than Nov. 19. On Nov. 24, Morse was in an accident that left her quadriplegic. Titan denied coverage based on the Nov. 25 effective date of the policy. Morse sued Titan for breach of contract, seeking reformation of the contract to make it effective on Nov. 19. Morse died during litigation and her estate was substituted as plaintiff. A jury determined the policy’s effective date was Nov. 19 and the trial court ultimately entered a judgment of more than $1.1 million for plaintiff.
The Court of Appeals vacated the trial court’s decision, finding there was no basis to reform the contract because there was no evidence of a mutual mistake between the parties who entered into the contract. The court said:
“It is undisputed that the actual policy of insurance in this matter, or contract, was between Titan and Ms. Morse. It is also undisputed that the insurer, Titan, had no contact with Ms. Morse, the insured. As indicated by Titan, it intended to issue the policy of insurance in conformity with the specific information relayed to it by Adrian, including the date the policy was to become effective. … Where Titan simply accepted the date provided by Adrian and issued the policy with the provided date on it, it clearly intended that the policy become effective on that date. Having had no contact with Ms. Morse, it would have no reason to intend that the policy become effective on any other date and there is thus no mutual mistake between the two parties named in the contract.”
Regarding the argument of mistake, the Court of Appeals said the trial court erred in finding as a matter of law that Adrian was acting as a dual agent; that is, an agent of both Titan and plaintiff. According to the court:
“Independent insurance agents … sell policies from many different insurers and have long been deemed to be the agent of the insured.”
The Court of Appeals also noted the business arrangement between Adrian and Titan provided that Adrian could solicit business for Titan, but that Titan had the sole discretion whether to issue a policy. The court said:
“There was nothing in the record to support the trial court’s finding that Adrian was Titan’s agent with respect to the submission of the application. … Being a conduit to a transaction does not translate into being a dual agent. And, even where dual agency can be found, one is not necessarily a dual agent for all purposes.”
Even if Adrian could be construed as Titan’s agent for even some limited purposes, like collecting premiums, those purposes were “very specific” and did not change the fact that Adrian was considered an agent of plaintiff, the Court of Appeals said.
Accordingly, the Court of Appeals concluded that the trial court erroneously denied Titan’s motion for summary disposition and improperly allowed reformation of the policy. The court remanded the case for entry of a judgment of no cause of action in favor of Titan.
