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Schild v Aetna Casualty & Surety Company; (COA-UNP, 1/7/1992; RB #1526)


Michigan Court of Appeals; Docket No. 117945; Unpublished   
Judges Marilyn Kelly, MacKenzie, and Gribbs; 2-1 (with Judge Mackenzie Dissenting); Per Curiam  
Official Michigan Reporter Citation:  Not Applicable; Link to Opinion alt   

Not Applicable

Cancellation and Rescission of Insurance Policies  
Equitable Estoppel  
Insurance Agents (Duty to Insured)   

In this 2-1 per curiam Opinion (Judge MacKenzie dissenting), the Court of Appeals affirmed a jury verdict determining that plaintiff was entitled to liability insurance coverage under Aetna's policy pursuant to the doctrine of "equitable estoppel" and a "special relationship" between the insured and his agent Aetna had denied coverage or indemnification on the grounds that the insurance policy had expired on March 26,1986, 53 days before the accident.  

The facts of the case establish that plaintiff purchased insurance with Aetna pursuant to the recommendation of his agent, and received a copy of the policy by mail. The policy indicated that it expired on March 26, 1986, six months thereafter. However, plaintiff also received a certificate of insurance which stated that the expiration date was September 26,1986, one year following. Plaintiff claimed that he never received notice of cancellation of the policy, and had not read the portion of the policy that stated that it expired on March 26,1986 if not renewed.  

The jury concluded that Aetna owed plaintiff a duty to defend and indemnify based upon a theory of equitable estoppel. Plaintiff testified that he had relied on his agent to call him when a payment was due, and that he had also relied on the date of expiration set forth on the "certificate" of insurance, indicating that the policy term was one year.   

In upholding the jury verdict in plaintiff’s favor, the Court of Appeals held that plaintiff had established entitlement to insurance coverage pursuant to the doctrine of "equitable estoppel" which requires proof that, by representation, admission or silence, the defendant has intentionally or negligently induced plaintiff to believe facts upon which he justifiably relied, and that the plaintiff will be prejudiced if defendant is permitted to deny the existence of those facts.

The Court of Appeals also held that the relationship between the agent and the insured in this case imposed a duty on the agency to inform the plaintiff of the expiration date of his policy. This special relationship arose from facts which showed that the insurance agency had been taking care of plaintiff s automobile insurance needs for a period of four years, and plaintiff testified that he received telephone calls from the agency when his premium payments were due. Plaintiff testified that he trusted and relied on the insurance agent's advice as to when premium payments were due. Under these circumstances, the Court of Appeals held that this was sufficient to allow the jury to determine that there was a "special relationship" imposing a duty on the agency to inform the plaintiff of the expiration date of the policy. Plaintiff was thereby excused from his duty to read the policy to discover its actual date of expiration.  

In her dissent, Judge MacKenzie would hold that Aetna's several statements documenting the six month policy period, combined with plaintiff’s complete failure to meet his duty to read his policy, should preclude application of the doctrine of equitable estoppel.  

Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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