JAMES H YOUNG V NORTHWESTERN MUTUAL LIFE
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
JAMES H. YOUNG,
UNPUBLISHED
May 8, 1998
Plaintiff-Appellant,
v
NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY,
No. 201295
Saginaw Circuit Court
LC No. 96-014877 CK
Defendant-Appellee.
Before: Hood, P.J., and Markman and Talbot, JJ.
PER CURIAM.
Plaintiff alleges that defendant breached its contract of insurance by denying certain retroactive
benefits. The trial court granted defendant’s motion for summary disposition under MCR
2.116(C)(10). Plaintiff appeals as of right. We affirm.
Defendant insured plaintiff under a disability policy. Plaintiff began to experience debilitating
fatigue in 1989. In November 1993, plaintiff’s physician diagnosed plaintiff’s condition as sleep apnea.
Upon further testing he concluded that plaintiff’s sleep apnea was secondary to degenerating pulmonary
obstructive disease, and that plaintiff was one-third disabled from 1989 until June 1992, one-half
disabled from June 1992 to April 1994, and two-thirds disabled by April 1994. On November 19,
1993, plaintiff filed a claim seeking disability benefits beginning with the onset of symptoms in 1989.
Plaintiff initially submitted written proof of disability on December 13, 1993.
Defendant did not dispute plaintiff’s disability, but relied upon policy language to deny plaintiff’s
claim for certain retroactive benefits. The provision of the policy at issue is § 4.3, entitled “Proof of
Disability:”
Written proof of disability must be given to the company at its home office. It
must be given within ninety days after termination of the period for which the company is
liable. Failure to give proof within the time required shall not invalidate nor reduce any
claim if it was not reasonably possible to give proof within such time; however, proof
-1
must be given not later than one year from the time proof is otherwise required except in
the absence of legal capacity.
Section 4.3 of the policy is consistent with the requirements for disability insurance policies mandated by
§ 3414 of the Insurance Code of 1956, MCL 500.100 et seq.; MSA 24.1100, et seq.1 Provisions
such as these, which require insured parties to provide notice of claims, are designed to give insurers the
opportunity to make timely investigations in order to defend against fraudulent or excessive claims. See
Wendel v Swanberg, 384 Mich 468, 477; 185 NW2d 348 (1971).
Defendant paid benefits retroactive to June 1992, but denied plaintiff’s claim for retroactive
benefits for the period January 1989 through June 1992. Finding the language of § 4.3 to be
unambiguous, the trial court granted defendant’s motion for summary disposition. MCR 2.116(C)(10).
The trial court explained that, under § 4.3, assuming it was not reasonably possible for plaintiff to give
proof of disability as required, the earliest time for which the policy would require defendant to pay
benefits was October 1992 (one year and ninety days prior to plaintiff’ s submission of proof of
disability).
On appeal, plaintiff again argues that the language in § 4.3 of the policy is ambiguous and that,
as such, it should be construed in favor of coverage. We agree with the trial court’s conclusion that the
subject policy language is not ambiguous. This Court reviews a trial court’s decision regarding a motion
for summary disposition de novo. Miller v Farm Bureau Mutual Ins Co, 218 Mich App 221, 233;
553 NW2d 371 (1996). Summary disposition may be granted under MCR 2.116(C)(10) when there
is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
Foster v Cone-Blanchard Machine Co, 221 Mich App 43, 48; 560 NW2d 664 (1997).
An insurance policy is a contract between the parties in which a court will determine what the
agreement was and effectuate the intent of the parties. Auto-Owners Ins Co v Churchman, 440 Mich
560, 566; 489 NW2d 431 (1992). Courts must enforce an insurance contract according to its terms.
Michigan Millers Mutual Ins Co v Bronson Plating Co, 445 Mich 558, 567; 519 NW2d 864
(1994). A clause in an insurance contract is valid so long as it is clear, unambiguous, and not in
contravention of public policy. Auto-Owners, supra at 567. A court may not read ambiguities into a
policy where none exist. Michigan Millers, supra at 567. An insurance contract is ambiguous when
its provisions may reasonably understood in differing ways. Bianchi v Automobile Club of Michigan,
437 Mich 65, 70; 467 NW2d 17 (1991). Ambiguities are to be construed against the insurer, who is
the drafter of the contract. State Farm Mutual Automobile Ins Co v Enterprise Leasing Co, 452
Mich 25, 38; 549 NW2d 345 (1996).
Plaintiff first contends that the phrase, “termination of the period for which the Company is
liable,” in the first sentence of § 4.3 is ambiguous because that “period” could be understood as being
either (1) the monthly period for which particular benefits are due, or (2) the “maximum benefit period”
over which the company might be potentially liable for paying disability benefits. In plaintiff’ s case, the
“maximum benefit period” provided for in the policy terminated at plaintiff’s sixty-fifth birthday, in the
year 2007. Plaintiff suggests that this portion of § 4.3 should have been construed in his favor to permit
-2
submission of proof of disability ninety days after his sixty-fifth birthday. We disagree. Section 4.3
speaks of “the period for which the company is liable” (i.e., the monthly period for which particular
benefits are due), not of the period for which the company may be potentially liable (i.e., the maximum
benefit period). The plain language of the policy is not ambiguous, and we will not create an ambiguity
where none exists. Moreover, if this Court were to accept plaintiff’s unreasonable assertion that the
company’s period of liability is synonymous with “the end of the policy,” there would be virtually no
time limitation on seeking retroactive benefits.
Plaintiff also contends that the last sentence of § 4.3, “however, proof must be given not later
than one year from the time proof is otherwise required,” is ambiguous because that “time” could be
understood as being either (1) the end of the ninety day period referred to earlier in § 4.3, or (2) the end
of time at which it was reasonably possible to give such proof. Plaintiff suggests that this portion of §
4.3 should have been construed in his favor to permit submission of proof of disability one year after the
time at which it was reasonably possible to give such proof. Again, we disagree. Plaintiff’ s suggested
construction disregards the policy’s use of the word “otherwise,” which indicates that the one year
period referred to in that sentence is a limitation on the time during which a reasonable failure to submit
proof of disability within the ninety period is excusable.
Affirmed.
/s/ Harold Hood
/s/ Stephen J. Markman
/s/ Michael J. Talbot
1
Section 3414 provides:
There shall be a provision as follows:
PROOFS OF LOSS: Written proof of loss must be furnished to the insurer at
its said office in case of claim for loss for which this policy provides any periodic
payment contingent upon continuing loss within 90 days after the termination of the
period for which the insurer is liable and in case of claim for any other loss within 90
days after the date of such loss. Failure to furnish such proof within the time required
shall not invalidate nor reduce any claim if it was not reasonably possible to give proof
within such time, provided such proof is furnished as soon as reasonably possible and in
no event, except in the absence of legal capacity, later than 1 year from the time proof is
otherwise required. [MCL 500.3414; MSA 24.13414.]
-3
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.