MICHAEL REMAR V CATHERINE SUSAN TRUMBLEY
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STATE OF MICHIGAN
COURT OF APPEALS
MICHAEL REMAR,
UNPUBLISHED
June 3, 2003
Plaintiff-Appellant,
v
CATHERINE SUSAN TRUMBLEY and WAYNE
TRUMBLEY, d/b/a SHAROLYN MOTEL,
No. 242779
Chippewa Circuit Court
LC No. 99-004616-NO
Defendants,
and
CITIZENS
AMERICA,
INSURANCE
COMPANY
OF
Garnishee/Defendant-Appellee.
Before: Smolenski, P.J., and Griffin and O’Connell, JJ.
PER CURIAM.
Plaintiff appeals as of right from the order granting summary disposition to
garnishee/defendant Citizens Insurance Company (Citizens). Plaintiff secured a $350,000
default judgment against defendants and then sought payment of the judgment by defendants’
insurance provider, Citizens.1 Citizens declined to pay the judgment, claiming it never received
notice of the lawsuit and was never provided copies of the lawsuit papers as required by the
terms of its policy with defendants. Citizens sought, and was granted, summary disposition
regarding plaintiff’s garnishment claim and this appeal followed. We affirm.
The trial court granted summary disposition under MCR 2.116(C)(10), a decision which
we review de novo. Spiek v Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201
(1998). A motion for summary disposition under MCR 2.116(C)(10) tests whether there is
factual support for a claim, Id., and a court must consider the pleadings, affidavits, depositions,
1
Plaintiff was allegedly bitten by a brown recluse spider at defendants’ motel and suffered
injuries as a result.
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admissions and other documentary evidence submitted in the light most favorable to the
nonmoving party. Ritchie-Gamester v City of Berkley, 461 Mich 73, 76; 597 NW2d 517 (1999).
This case concerns the interpretation of language in the insurance policy issued by
Citizens to defendants. This Court examines the language of an insurance policy and enforces
the policy in accordance with its terms. Frankenmuth Mut Ins Co v Masters, 460 Mich 105, 111;
595 NW2d 832 (1999). Where there is no ambiguity, the policy will be enforced as written, and
the terms of the policy will be interpreted according to their “commonly used meaning.” Id. at
111-112.
Plaintiff claims that the trial court erred by granting summary disposition to Citizens
because a telephone call made by Catherine Trumbley to her insurance agency, the MadiganPingatore Agency (Madigan-Pingatore), after she was served with plaintiff’s summons and
complaint, was sufficient to provide Citizens with notice of plaintiff’s lawsuit as required by the
insurance contract. Plaintiff further asserts that, at least for the purpose of receiving notice of an
insurance claim, the agency was Citizens’ “authorized agent.”
Plaintiff asserts that Madigan-Pingatore is an “authorized agent” of Citizens, and because
defendants’ policy contained an endorsement which provided that “[n]otice given by or on behalf
of the insured to our authorized agent, with particulars sufficient to identify the insured, shall be
considered notice to [Citizens],”2 Trumbley’s March 2000 telephone call to Madigan-Pingatore
constituted notice of the lawsuit to Citizens. The first issue is whether Madigan-Pingatore was
the “authorized agent” of Citizens for purposes of receiving notice of a claim and notice of a
lawsuit.
Generally an independent insurance agent is an agent of the insured, not the insurer.
Mate v Wolverine Mut Ins Co, 233 Mich App 14, 20; 592 NW2d 379 (1998). MadiganPingatore considers itself an independent agency. Both Stephen Madigan and Randy Pingatore
testified that their agency was an independent agency that dealt with numerous insurance
companies. Such testimony is generally sufficient to prove that the independent agent is an agent
of the insured and not of the insurer. Id.; Harwood v Auto-Owners Ins Co, 211 Mich App 249,
254; 535 NW2d 207 (1995) (holding that independent insurance agent that "had the power to
place insurance with various insurance companies" was not an agent of the insurer).
Plaintiff asserts that because the agency agreement between Madigan-Pingatore and
Citizens stated that Madigan-Pingatore was an agent and the agreement required MadiganPingatore to perform certain duties, Madigan-Pingatore was clearly an authorized agent of
Citizens. The agency agreement between Madigan-Pingatore and Citizens stated that “[b]y
2
This endorsement was included to comply with MCL 500.3008, which provides:
In such liability insurance polices there shall be a provision that notice given by or on
behalf of the insured to any authorized agent of the insurer within this state, with particulars
sufficient to identify the insured shall be deemed to be notice to the insurer; and also a provision
that failure to give any notice required to be given by such policy within the time specified
therein shall not invalidate any claim made by the insured if it shall be shown not to have been
reasonably possible to give such notice within the prescribed time and that notice was given as
soon as was reasonably possible.
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signing this agreement you [Madigan-Pingatore] become an Agent for the Companies indicated
above,” which included Citizens, and the agreement further stated that Madigan-Pingatore had
the authority to “accept and bind contracts of insurance that [Citizens] is licensed to write.”
However, the agreement further stated, under a heading titled “Your Duties and
Responsibilities,” that Madigan-Pingatore was “an independent contractor, not an employee of
the Companies.”
Given the above facts, there appears to be a genuine issue of material fact as to whether
Madigan-Pingatore was an agent of defendants, Citizens, or possibly a dual agent. Vargo v
Sauer, 457 Mich 49, 68-69; 576 NW2d 656 (1998). However, reversal is unnecessary because,
even if we were to conclude that Madigan-Pingatore was an agent of Citizens, there is no
genuine issue of material fact regarding the insufficiency of Trumbley’s notice to MadiganPingatore which prejudiced Citizens. Trumbley stated that soon after she was served with
plaintiff’s summons and complaint in March 2000, she called Madigan-Pingatore and stated that,
“I’ve been sued.” Trumbley was allegedly told that someone would return her call. MadiganPingatore denies ever receiving such a telephone call, and, therefore, never contacted Citizens.
“Notice to an authorized agent is notice to the insurer.” Wendel v Swanberg, 384 Mich
468, 478; 185 NW2d 348 (1971); see MCL 500.3008. The purpose of liability policy provisions
requiring the insured to give the insurer immediate or prompt notice of accident or suit is to
allow the insurer to make a timely investigation in order to evaluate claims and defend against
fraudulent, invalid or excessive claims. Weller v Cummins, 330 Mich 286, 293; 47 NW2d 612
(1951).
However, mere failure by an insured to notify its insurer of a lawsuit will not cut off the
insurer’s liability under the policy absent a showing of prejudice by the insurer. Koski v Allstate
Ins Co, 456 Mich 439, 444-445; 572 NW2d 636 (1998).
Ordinarily, one who sues for performance of a contractual obligation must prove
that all contractual conditions prerequisite to performance have been satisfied.
However, it is a well-established principle that an insurer who seeks to cut off
responsibility on the ground that its insured did not comply with a contract
provision requiring notice immediately or within a reasonable time must establish
actual prejudice to its position. [Id. at 444.]
The Koski Court determined that the evidence in the case “established that Allstate received no
notification of the suit brought against plaintiff until three months after the entry of the default
judgment. . . . Consequently, Allstate was deprived of any opportunity to engage in discovery,
cross-examine witnesses at trial, or present its own evidence relative to liability and damages.
Id. at 444-445.
In this case, the policy imposed certain duties on the insured: (1) the insured had to give
prompt notice of a claim or of an occurrence that might result in a claim; (2) the insured had to
give prompt notice of any lawsuit; (3) the insured had to immediately send any legal papers
received in connection with the lawsuit to Citizens, authorize Citizens to obtain records and other
information, cooperate in the investigation or settlement of the claim, and assist Citizens in the
enforcement of any right against anyone liable to the insured; and (4) the insured could not make
any payment or assume any obligation without Citizens’ consent. Unless the insured performed
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these duties, “[n]o person or organization has a right under this Coverage Part . . . [t]o sue us on
this Coverage Part.”
There is no dispute that in this alleged telephone call Trumbley did not identify plaintiff,
the basis for the lawsuit and its alleged occurrence date, or when Trumbley herself received
notice of the lawsuit. Also, there is no dispute that defendants forwarded none of the legal
papers, including the complaint and summons, the default, the motion to enter a default
judgment, and the default judgment, to Madigan-Pingatore or to Citizens. Defendants’ complied
with none of the policy requirements concerning notice of a lawsuit.3
There is evidence to suggest that Madigan-Pingatore learned of the default judgment in
early November 2000. However, even if Madigan-Pingatore had informed Citizens immediately,
Citizens would have had but a few days to obtain the applicable legal papers regarding the suit,
investigate the claim, and file a motion to set aside the default judgment with in the 21-day
window. MCR 2.603(D). We hold that, based on these facts, there is no genuine issue of
material fact that Citizens has established prejudice as a result of defendants’ failure to comply
with its notice duties as required by their policy, and, therefore, Citizens is relieved of liability to
provide coverage. Accordingly, the trial court properly granted summary disposition in favor of
Citizens.
Affirmed.
/s/ Michael R. Smolenski
/s/ Richard Allen Griffin
/s/ Peter D. O’Connell
3
Plaintiff asserts that the policy language regarding notice only requires the insured to identify
herself, which Trumbley did when she called Madigan-Pingatore in March 2000. Plaintiff is
referring to the policy endorsement, which incorporates MCL 500.3008. We believe that
plaintiff misinterprets this provision’s meaning. It states that notice “with particulars sufficient
to identify the insured shall be deemed to be notice to the insurer.” The provision provides that
the notice must include identification of the insured. The content of the notice itself must still
provide insurer with sufficient information regarding the lawsuit to enable it to act accordingly.
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