FARMERS INS EXCHANGE V ANTHONY NICHOLAS ALCINI
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STATE OF MICHIGAN
COURT OF APPEALS
AMERISURE MUTUAL INSURANCE
COMPANY and PIZZA CZARS, INC., d/b/a
JET’S PIZZA,
UNPUBLISHED
May 4, 2004
Plaintiffs-Appellants,
No. 243085
Wayne Circuit Court
LC No. 02-205791-CK
v
FARMERS INSURANCE EXCHANGE,
Defendant-Appellee,
and
ANTHONY NICOLAS ALCINI,
Defendant.
FARMERS INSURANCE EXCHANGE,
Plaintiff-Appellee,
v
PIZZA CZARS, INC., doing business as JET’S
PIZZA,
Defendant-Appellant,
and
ANTHONY NICHOLAS ALCINI,
Defendant,
and
DONALD LEASE, as Next Friend of DON
EDWIN LEASE,
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No. 243105
Wayne Circuit Court
LC No. 02-205005-CK
Defendant-Not Participating.
Before: Neff, P.J. and Wilder and Kelly, JJ.
PER CURIAM.
In these consolidated cases, Amerisure Mutual Insurance Company and Pizza Czars, Inc.
appeal as of right an order granting Farmers Insurance Exchange’s motion summary disposition,
denying Amerisure’s motion for summary disposition and dismissing Amerisure’s declaratory
action. We affirm.
I. Basic Facts and Procedural History
This case arises from an automobile accident in which a vehicle driven by Anthony
Nicholas Alcini, while he was delivering pizzas for Pizza Czars, struck and injured Don Edwin
Lease. The vehicle was insured by Farmers under Alcini’s mother’s insurance policy. Farmers
denied Alcini’s claim under a business-use exclusion because the accident occurred while Alcini
was carrying property for a charge. Pizza Czars was insured by Amerisure with “covered autos”
including employees’ vehicles used in the course of Pizza Czars’ business. Lease ultimately
sued Alcini and Pizza Czars.
Farmers filed a declaratory action against Alcini, Pizza Czars and Lease seeking a
declaration that it was not required to defend or indemnify Alcini. A few days later, Amerisure
and Pizza Czars filed a separate declaratory action against Farmers and Alcini seeking a
declaration that Farmers was obligated to defendant and indemnify Alcini and Pizza Czars. On
Amerisure’s motion, the trial court consolidated the two cases. Both Farmers and Amerisure
filed motions for summary disposition. Farmers argued, pursuant to MCR 2.116(C)(10) that
there was no genuine issue of fact as to whether it owed a duty to defend Alcini. Amerisure
argued pursuant to MCR 2.116(C)(8) and (10) that Farmers, the primary insurer, had the duty to
defend. The trial court granted Farmers’ motion, denied Amerisure’s motion and dismissed
Amerisure’s declaratory action.
II. Analysis
Amerisure argues that the trial court erred in granting Farmers’ motion for summary
disposition and denying Amerisure’s motion for summary disposition. We disagree.
A. Standard of Review
We review de novo a trial court’s decision on a motion for summary disposition. Maiden
v Rozwood, 461 Mich 109, 119; 597 NW2d 817 (1999). In evaluating a motion under MCR
2.116(C)(10), the trial court considers the pleadings, affidavits, depositions and other
documentary evidence in a light most favorable to the nonmoving party and determines whether
the moving party was entitled to judgment as a matter of law. Id. at 120. MCR 2.116(C)(8) tests
the "legal sufficiency of the complaint" and permits dismissal of a claim where the opposing
party has failed to state a claim on which relief can be granted. Id. at 119. Only the pleadings
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are examined; documentary evidence is not considered. Id. Where the claim is "so clearly
unenforceable as a matter of law that no factual development could possibly justify a right of
recovery," the motion should be granted. Id.
B. Farmers’ Policy Exclusion
1. Ambiguity
Amerisure first argues that Farmers’ exclusion for vehicles used to “carry persons or
property for a charge” supported two interpretations and was therefore ambiguous. We disagree.
Whether the language of a contract is ambiguous is a question of law that is reviewed de
novo. Farm Bureau Mut Ins Co v Nikkel, 460 Mich 558, 563; 596 NW2d 915 (1999). An
insurance policy is construed according to ordinary principles of contract construction.
Henderson v State Farm Fire and Casualty Co, 460 Mich 348, 353-354; 596 NW2d 190 (1999).
Where a contract is unambiguous, the intent of the parties must be gleaned from the contract
itself. Id. at 354. When an exclusion is unambiguous, and the insured’s actions fall within that
exclusion, coverage is precluded. Auto-Owners Ins v Harrington, 455 Mich 377, 381-386; 565
NW2d 839 (1997).
Based on the plain language of the Farmers policy, we conclude that the unambiguous
business-use exclusion precludes Farmers’ coverage. We previously held that when a person is
hired to deliver pizzas, the delivery of the pizzas is for consideration. Amerisure Ins Co v Graff
Chevrolet, Inc, 257 Mich App 585, 596; 669 NW2d 304 (2003), rev’d in part on other grounds
___ Mich ___ (Docket No. 124426, decided January 29, 2004). Accordingly, the exclusion at
issue precludes coverage because the accident occurred when the vehicle is used to carry
“persons or property for a charge.”
2. Compulsory Insurance Provisions
Amerisure next argues that the Farmers’ exclusion violated compulsory insurance
provisions of the no-fault insurance act and should have been declared void. We disagree.
The purpose of the no-fault insurance act, MCL 500.3101 et seq., is to protect those who
are injured because of the “ownership, maintenance, or use of an automobile.” Clevenger v
Allstate Ins Co, 443 Mich 646, 651; 505 NW2d 553 (1993). A policy exclusion that conflicts
with the mandatory requirements of the no-fault act is void as contrary to public policy. Citizens
Ins Co v Federated Mut Ins Co, 448 Mich 225, 232; 531 NW2d 138 (1995). Nevertheless, an
insurer may exclude from coverage certain items as long as the unambiguous exclusion does not
violate the no-fault insurance act. Id. at 238. The essential insurance act, MCL 500.2101 et seq.,
specifically permits a business-use exclusion. Husted v Auto-Owners Ins Co, 459 Mich 500,
506; 591 NW2d 642 (1999), citing MCL 500.2118(2)(f), 516. Because the essential insurance
act and the no-fault insurance act are in pari materia, and the essential insurance act was enacted
later and specifically addresses business-use exclusions, it is treated as an exception to the nofault act. Id. at 516. Accordingly, Farmers’ business-use exclusion does not violate the no-fault
insurance act.
3. Estoppel
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Amerisure next argues that because Farmers did not raise an exclusion as a defense
before summary disposition, it should have been estopped from raising the exclusion. We
disagree.
Generally, after an insurance company denies coverage to an insured and states its
defenses, it is estopped from raising new defenses. Smit v State Farm Ins Co, 207 Mich App
674, 679-680; 525 NW2d 528 (1994). But an insurance company is not estopped from raising
defenses where the effect of estoppel would require the insurance company to cover a loss it
never agreed to cover. Id. at 680. While there are two exceptions to this narrowed scope, neither
is applicable here, and Farmers is not estopped from proffering the exclusion as a defense. Id. at
684.
C. Assumption of Risk
Amerisure next claims that Alcini was not an insured under its policy. We disagree.
An insurance company may not be held liable when it did not assume a risk. Graff, supra
at 594, citing Kaczmarck v La Pierre, 337 Mich 500, 506; 60 NW2d 327 (1953). But
Amerisure’s policy specifically covers employees’ vehicles used in the course of business.
Because Alcini was delivering pizzas within the scope of his employment, Amerisure’s policy
covers the vehicle that he drove at the time of the accident.
D. Excess “other insurance”
Amerisure next argues that its policy was an excess “other insurance policy” with respect
to non-owned automobiles, and that Farmers, as the primary insurer of the employee’s car, was
responsible for the underlying settlement to the limits of its policy coverage. We disagree.
Because Farmers’ policy specifically excluded coverage for accidents occurring while
property was being delivered for a charge, there was no other primary insurance. An excess
“other insurance” clause only becomes effective when there is other primary insurance;
otherwise the policy is primary, even for non-owned automobiles. Bosco v Bauermeister, 456
Mich 279, 292; 571 NW2d 509 (1997). Because Farmers policy did not provide primary
coverage in this case, Amerisure’s coverage was not an excess “other insurance policy.”
E. Discovery
Amerisure next argues that the trial court should not have granted summary disposition
where the discovery cut-off in its declaratory action was several months away. We disagree.
Generally, summary disposition is premature if granted before complete discovery on a
disputed issue. Dimondale v Grable, 240 Mich App 553, 566; 618 NW2d 23 (2000).
Nevertheless, when it is not likely that additional discovery will support a nonmoving party’s
position, summary disposition may be proper. Id. Amerisure argues that it suffered unfair
prejudice because it was unable to explore all relevant issues regarding coverage, but does not
demonstrate how additional discovery might have supported a denial of summary disposition
when Farmers’ business-use exclusion precluded coverage and Amerisures’ policy covers the
vehicle Alcini drove for Pizza Czars’ business purposes.
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Therefore, we conclude that the trial court did not err in granting summary disposition to
Farmers and denying Amerisure’s motion for summary disposition.
Affirmed.
/s/ Janet T. Neff
/s/ Kurtis T. Wilder
/s/ Kirsten Frank Kelly
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