Justia Contracts Opinion SummariesArticles Posted in Michigan Supreme Court
Meemic Insurance Co. v. Jones
Meemic Insurance Company filed a subrogation claim against Angela Jones, seeking to recover from Jones money it had paid to CitiMortgage, Inc., the mortgagee of a residential house owned by Jones and insured by Meemic, after fire damaged the property. In September 2015, Jones was living at the house when it was damaged by a fire. Meemic paid her $2,500 in partial payment of the claim for insurance benefits. During Meemic’s ensuing investigation, Jones admitted that at the time she secured the policy in 2014, she did not reside at the house but, instead, rented it to a third party. Meemic claimed that Jones’s failure to disclose in the initial policy that her home was being rented to others constituted a material misrepresentation. On the basis of the misrepresentation, Meemic rescinded and voided the insurance policy from its inception and returned Jones’s policy payments. After rescinding the policy, Meemic paid $53,356.49 to CitiMortgage under the lienholder contract of the policy. Jones filed an action against Meemic, claiming breach of contract and sought to recover under the insurance policy. Meemic moved for summary judgment, arguing that it had properly rescinded the policy given Jones’s misrepresentation in the initial policy. The motion was ultimately granted, and Jones' complaint was dismissed with prejudice. In 2018, Meemic filed the underlying action against Jones seeking to recover the $2,500 advance payment made to Jones and the $53,356.49 it had paid to CitiMortgage under the lienholder contract. Jones moved for summary judgment, arguing that she was relieved from any obligations under the insurance policy because Meemic had rescinded the insurance policy; Meemic opposed the motion and filed a countermotion for summary judgment. The Court of Appeal reversed the trial court's grant of summary judgment in favor of Meemic, and Meemic appealed. The Michigan Supreme Court held: an insurer who rescinds a homeowner’s insurance policy that contains a mortgage clause may seek subrogation from the insured under its rescinded policy for the amount paid to the mortgagee under the lienholder contract. The Court of Appeals judgment was reversed because it erred by concluding that Meemic’s rescission of the risk contract precluded it from denying payment to Jones and then asserting rights under the subrogation provision of the lienholder contract. View "Meemic Insurance Co. v. Jones" on Justia Law
Mecosta County Medical Center v. Metropolitan Group Property, et al.
Mecosta County Medical Center, d/b/a Spectrum Health Big Rapids (and others) sued Metropolitan Group Property and Casualty Insurance Company and State Farm Mutual Automobile Insurance Company at the Kent Circuit Court, seeking personal protection insurance (PIP) benefits related to a single-car crash involving Jacob Myers. Myers co-owned the vehicle involved in the crash with his girlfriend; his girlfriend’s grandmother had purchased a no-fault insurance policy on the vehicle through Metropolitan Group. Myers assigned plaintiffs his right to collect PIP benefits in the amount of his treatment bills. After the assignment, Myers sued Metropolitan Group and State Farm at the Wayne Circuit Court for PIP benefits related to other costs arising from the crash. Plaintiffs sued defendants at the Kent Court to recover on the assigned claim. Defendants moved for summary judgment against Myers at the Wayne Court. State Farm argued that because Myers did not live with the State Farm policyholders he was not covered by their policy. Metropolitan Group asserted that Myers was not entitled to coverage because he did not personally maintain coverage on the vehicle. The Wayne Court granted both motions and dismissed Myers’s PIP claim with prejudice. Myers did not appeal. While defendants’ motions were pending with the Wayne Court, Metropolitan Group also moved for summary judgment at the Kent Court on the same basis as its motion in the Wayne Court. However, the Wayne Court granted defendants’ motions before the Kent Court considered Metropolitan Group’s motion. After the Wayne Court granted summary judgment for defendants, defendants filed additional motions for summary judgment at the Kent Court, arguing plaintiffs’ claims were barred under the doctrines of res judicata and collateral estoppel because the Wayne Court had concluded that Myers was ineligible for PIP benefits. The Kent Court granted the motion, holding that plaintiffs’ claims were barred by res judicata and collateral estoppel. Plaintiffs appealed, and the Court of Appeals reversed in a split, unpublished opinion. The appellate majority held that an assignee was not bound by a judgment against an assignor in an action commenced after the assignment occurred. The Michigan Supreme Court affirmed, finding that plaintiffs were not in privity with Myers with respect to the judgment entered subsequently to the assignment, and therefore, plaintiffs could not be bound by that judgment under the doctrines of res judicata and collateral estoppel. View "Mecosta County Medical Center v. Metropolitan Group Property, et al." on Justia Law
Skanska USA Building, Inc. v. M.A.P. Mechanical Contractors, Inc.
Plaintiff Skanska USA Building Inc. served as the construction manager on a renovation project for Mid-Michigan Medical Center–Midland (the Medical Center); plaintiff subcontracted the heating and cooling portion of the project to defendant M.A.P. Mechanical Contractors, Inc. (MAP). MAP obtained a commercial general liability insurance policy (the CGL policy) from defendant Amerisure Insurance Company (Amerisure). Plaintiff and the Medical Center were additional named insureds on the CGL policy. In 2009, MAP installed a steam boiler and related piping for the Medical Center’s heating system. MAP’s installation included several expansion joints. Sometime between December 2011 and February 2012, plaintiff determined that MAP had installed some of the expansion joints backward. Significant damage to concrete, steel, and the heating system occurred as a result. The Medical Center sent a demand letter to plaintiff, asserting that it had to pay for all costs of repair and replacement. Plaintiff sent a demand letter to MAP, asserting that MAP was responsible for all costs of repair and replacement. Plaintiff repaired and replaced the damaged property, at a cost of $1.4 million. Plaintiff then submitted a claim to Amerisure, seeking coverage as an insured. Amerisure denied the claim. The issue this case presented for the Michigan Supreme Court's review centered on whether the unintentional faulty subcontractor work that damaged an insured’s work product constituted an “accident” under a commercial general liability insurance policy. Because the Court concluded the answer was yes, it reversed the Court of Appeals’ judgment to the contrary. View "Skanska USA Building, Inc. v. M.A.P. Mechanical Contractors, Inc." on Justia Law
El-Khalil v. Oakwood Health Care, Inc.
Ali A. El-Khalil sue his former employer and several individuals (collectively, defendants): Oakwood Healthcare, Inc.; Oakwood Hospital–Southshore; Oakwood Hospital–Dearborn; Dr. Roderick Boyes, M.D.; and Dr. Iqbal Nasir, M.D.. Plaintiff alleged breach of contract based on an alleged breach of medical staff bylaws that were part of plaintiff’s employment agreement. Plaintiff amended the complaint, adding a claim of unlawful retaliation in violation of the Elliott-Larsen Civil Rights Act (ELCRA). Plaintiff alleged defendants unlawfully retaliated against him by failing to renew his hospital privileges because of a previous lawsuit that plaintiff brought in August 2014 in which plaintiff had alleged racial discrimination on the basis of his Arabic ethnicity in violation of the ELCRA, tortious interference with an advantageous business relationship, and defamation. Defendants moved for summary judgment, and the trial court granted it without specifically identifying which rule supported its decision. Plaintiff appealed, and the Court of Appeals affirmed in an unpublished per curiam opinion. The Court of Appeals determined that the trial court reviewed the summary disposition motion under MCR 2.116(C)(10), affirmed the decision under that subrule, and found it unnecessary to reach the issues of immunity or release under Subrule (C)(7). Plaintiff appealed again, and the Michigan Supreme Court vacated the appellate court's opinion and remanded for review under MCR 2.116(C)(7) and (C)(8). On remand, the Court of Appeals held in an unpublished per curiam opinion that summary disposition of plaintiff’s ELCRA-retaliation and breach-of-contract claims was appropriate under MCR 2.116(C)(8) and found it unnecessary to address whether summary disposition of either claim was appropriate under MCR 2.116(C)(7) based on immunity or release. Plaintiff again sought review from the Supreme Court. The Supreme Court emphasized that a motion for summary judgment under MCR 2.116(C)(8) had to be decided "on the pleadings alone and that all factual allegations must be taken as true." In this case, the Court of Appeals erroneously conducted an MCR 2.116(C)(10) analysis instead of a (C)(8) analysis because it considered evidence beyond the pleadings and required evidentiary support for plaintiff’s allegations rather than accepting them as true. The Court therefore reversed the Court of Appeals, which had affirmed under MCR 2.116(C)(8) the trial court’s order granting summary disposition of plaintiff’s Elliott-Larsen Civil Rights Act (ELCRA) and breach-of-contract claims, and remanded to that Court for consideration of those claims under MCR 2.116(C)(7). View "El-Khalil v. Oakwood Health Care, Inc." on Justia Law
Estate of Nickola v MIC General Ins. Co.
In 2004, George and Thelma Nickola, were injured in a car accident. The driver of the other car was insured with a no-fault insurance policy provided the minimum liability coverage allowed by law: $20,000 per person, up to $40,000 per accident. The Nickolas’ (acting through their attorney) wrote to their insurer, defendant MIC General Insurance Company, explaining that the no-fault liability insurance policy was insufficient to cover the Nickolas' injuries. The letter also advised MIC that the Nickolas were claiming UIM benefits under their automobile policy. The Nickolas’ policy provided for UIM limits of $100,000 per person, up to $300,000 per accident, and they sought payment of UIM benefits in the amount of $160,000; $80,000 for each insured. An adjuster for defendant MIC denied the claim, asserting that the Nickolas could not establish a threshold injury for noneconomic tort recovery. The matter was ultimately ordered to arbitration, the outcome of which resulted in an award of $80,000 for George’s injuries and $33,000 for Thelma’s. The award specified that the amounts were “inclusive of interest, if any, as an element of damage from the date of injury to the date of suit, but not inclusive of other interest, fees or costs that may otherwise be allowable.” The trial court affirmed the arbitration awards but declined to award penalty interest under the UTPA, finding that penalty interest did not apply because the UIM claim was “reasonably in dispute” for purposes of MCL 500.2006(4). The Court of Appeals affirmed the trial court, holding that the “reasonably in dispute” language applied to plaintiff’s UIM claim because a UIM claim “essentially” places the insured in the shoes of a third-party claimant. The Michigan Supreme Court held that an insured making a claim under his or her own insurance policy for UIM benefits cannot be considered a “third party tort claimant” under MCL 500.2006(4). The Court reversed the Court of Appeals denying plaintiff penalty interest under the UTPA, and remanded this case back to the trial court for further proceedings. View "Estate of Nickola v MIC General Ins. Co." on Justia Law
Perkovic v. Zurich American Ins. Co.
In 2009, plaintiff Dragen Perkovic was operating a semitruck in Nebraska when he swerved to avoid hitting a car that had spun out in front of him. Plaintiff’s truck then crashed into a wall. Plaintiff’s resulting injuries were treated at The Nebraska Medical Center. At the time of the accident, plaintiff maintained personal automobile insurance with Citizens Insurance Company of the Midwest (Citizens) and a bobtail insurance policy with Hudson Insurance Company (Hudson). Plaintiff’s employer was insured by defendant Zurich American Insurance Company. The issue this case presented for the Supreme Court's review centered on the notice requirements of the no-fault act, specifically those set forth in MCL 500.3145(1): whether a nonparty medical provider’s provision of medical records and associated bills to an injured person’s no-fault insurer within one year of the accident causing injury constitutes proper written notice under MCL 500.3145(1), so as to prevent the one-year statute of limitations in MCL 500.3145(1) from barring the injured person’s subsequent no-fault claim. The Michigan Supreme Court held that when, as in this case, the documentation provided by the medical provider contained all of the information required by MCL 500.3145(1) and was provided to the insurer within one year of the accident, the statutory notice requirement was satisfied and the injured person’s claim was not barred by the statute of limitations. Therefore, the Court reversed the judgment of the Court of Appeals, vacated the trial court’s order granting summary disposition in favor of defendant Zurich American Insurance Company, and remanded to the trial court for further proceedings. View "Perkovic v. Zurich American Ins. Co." on Justia Law
Barton-Spencer v. Farm Bureau Life Ins. Co. of Michigan
The issue presented in this case was whether, by signing a contract providing that plaintiff agreed “to reimburse [defendants’] attorney fees and costs as may be fixed by the court,” the parties agreed that the amount of reasonable attorney fees would be fixed by a court rather than a jury. After review, the Supreme Court held that the parties did so agree. Accordingly, the Court vacated part of the Court of Appeals’ opinion and reversed that portion of the judgment that reversed the award of contractual attorney fees and costs, as well as that portion of the judgment that reversed the award of case evaluation sanctions. The Court otherwise denied the application and cross-application for leave to appeal and left in place the remainder of the Court of Appeals’ opinion. View "Barton-Spencer v. Farm Bureau Life Ins. Co. of Michigan" on Justia Law
Ronnisch Construction Group, Inc. v. Lofts on the Nine, LLC
At issue in this case was whether plaintiff, Ronnisch Construction Group (RCG), could seek attorney fees under section 118(2), MCL 570.1118(2), of the Construction Lien Act (CLA) from defendant Lofts on the Nine, LLC (LOTN), given that plaintiff received a favorable arbitration award on its related breach of contract claim but did not obtain a judgment on its construction lien claim. After review, the Michigan Supreme Court held that the trial court could award attorney fees to RCG because RCG was a lien claimant who prevailed in an action to enforce a construction lien through foreclosure. Therefore, the Court affirmed the Court of Appeals and remanded this case back to the trial court for further proceedings. View "Ronnisch Construction Group, Inc. v. Lofts on the Nine, LLC" on Justia Law
Innovation Ventures, LLC v. Liquid Manufacturing, LLC
In 2007, plaintiff Innovation Ventures, LLC engaged defendants Andrew Krause and K & L Development of Michigan (K & L Development) to design, manufacture, and install manufacturing and packaging equipment for the production of "5-Hour ENERGY" at Liquid Manufacturing’s bottling plant. The issue this case presented for the Michigan Supreme Court's review centered on whether agreements between sophisticated businesses were void for failure of consideration and whether the noncompete provisions in these agreements were reasonable. Innovation Ventures alleged a variety of tort and breach of contract claims against Liquid Manufacturing, LLC, K & L Development of Michigan, LLC, Eternal Energy, LLC, LXR Biotech, LLC, Peter Paisley, and Andrew Krause based on the defendants’ production of Eternal Energy and other energy drinks. Contrary to the determination of the Court of Appeals, the Supreme Court concluded that the parties’ Equipment Manufacturing and Installation Agreement (EMI) and Nondisclosure Agreement were not void for failure of consideration. The Court nevertheless affirmed the trial court’s grant of summary judgment to defendants for the claims against Krause, because there was no genuine issue of material fact on the question whether Krause breached the EMI or the Nondisclosure Agreement. Likewise, there was no issue on the question whether K & L Development breached the EMI. The Court concluded the Court of Appeals erred in failing to evaluate the noncompete provision in the parties’ Termination Agreement for reasonableness. The Court therefore reversed in part, affirmed in part, and remanded for consideration of those questions of fact remaining regarding whether K & L Development breached the Nondisclosure Agreement and whether Liquid Manufacturing breached the Termination Agreement with respect to its production of products other than Eternal Energy. View "Innovation Ventures, LLC v. Liquid Manufacturing, LLC" on Justia Law
Altobelli v. Hartmann
In 1993, plaintiff Dean Altobelli began working as an attorney for Miller, Canfield, Paddock and Stone, P.L.C. (“the Firm”). Upon joining the Firm, plaintiff signed the “Miller Canfield Operating Agreement” (“Operating Agreement”), a document governing the Firm’s internal affairs. By January 2006, plaintiff had become a senior principal at the Firm. However, in late May or early June 2010, plaintiff decided he wanted to pursue a new opportunity as an assistant coach for the University of Alabama football team. Plaintiff proposed a 7- to 12-month leave of absence from the Firm to defendant Michael Hartmann, the Firm’s CEO, and defendant Michael Coakley, who was the head of the Firm’s litigation group but was not a managing director. Plaintiff suggested that the Firm permit him to maintain his ownership interest and return to the Firm as a senior principal any time before June 1, 2011. Plaintiff avers that Hartmann initially promised plaintiff that he could spend as much time at the University of Alabama as he wanted and still receive certain allocated income from his clients. Hartmann disputed this, claiming that plaintiff voluntarily withdrew from the partnership. Plaintiff claimed he was improperly terminated, and that the Firm shorted plaintiff's income as a result. Plaintiff's attempt to resolve the matter through the direct settlement and mediation process, as outlined in the arbitration clause of the Operating Agreement, was unsuccessful. In November 2011, plaintiff filed a demand for arbitration as provided for in the arbitration clause. Despite having made the demand for arbitration, he filed suit alleging that the seven individuals named as defendants were responsible for engaging in tortious conduct with regard to plaintiff's request for a leave of absence and retention of his equity ownership in the Firm. Defendants moved for summary judgment and a motion to compel arbitration as required by the arbitration clause. Plaintiff moved for summary judgment too. The circuit court denied defendants’ motions and granted plaintiff's motion for partial summary judgment, finding as a matter of law that plaintiff did not voluntarily withdraw from the Firm. Rather, the circuit court concluded that defendants had improperly terminated plaintiff's ownership interest without authority. The Court of Appeals affirmed. The Supreme Court reversed the part of the Court of Appeals’ opinion regarding the motion to compel arbitration and instead held that this case was subject to binding arbitration under the arbitration clause of the Operating Agreement. Accordingly, the lower courts should not have reached the merits of plaintiff’s motion for partial summary disposition, as the motion addressed substantive contractual matters that should have been resolved by the arbitrator. The case was remanded back to the trial court for further proceedings. View "Altobelli v. Hartmann" on Justia Law