Michigan Court of Appeals; Docket No. 211463; Unpublished
Judges McDonald, Gage, and Talbot; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Private Contract (Meaning and Intent)
In this unanimous unpublished per curiam Opinion, the Court of Appeals upheld an exclusion contained in the liability coverage provisions of the applicable policy, which precluded coverage for any insured "using a vehicle without a reasonable belief that the insured is entitled to do so."
Robert Lovejoy, III, an underage, unlicensed minor, took his father's Ford Explorer without permission, and without a license, and collided with a vehicle operated by Atto, who was injured in the accident.
The Explorer was insured under a policy that provided insurance to Lovejoy's father and mother, and which extended coverage by way of its definition of "insured" as:
"1. You or any family member for the ownership, maintenance or use of any auto or trailer.
2. Any person using your covered auto."
The policy excluded liability coverage, however, for any insured "using a vehicle without a reasonable belief that insured is entitled to do so." Arnica Mutual Insurance Company denied coverage under the liability portion of the policy because Robert Lovejoy, III lacked a reasonable belief that he was entitled to use the Explorer. The insureds argued that the exclusion referred only to "a vehicle" and therefore did not encompass the Explorer, which the policy defined as a "covered auto."
The Court of Appeals rejected this argument, and held that the use of the general, undefined term "vehicle" in the exclusion, rather than the specific, defined phrase "your covered auto," did not create an ambiguity under the policy language. The term vehicle commonly includes automobiles such as the Explorer at issue, and therefore, the court concluded that "vehicle" as used in the exclusion, unambiguously refers to and includes the Explorer. Therefore, the policy language was not ambiguous and must be enforced as written.