FARM BUREAU MUTUAL INS V WILLEM C HENKE
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
FARM BUREAU MUTUAL INSURANCE,
UNPUBLISHED
December 13, 2005
Plaintiff-Appellant,
v
No. 262614
Ottawa Circuit Court
LC No. 04-048965-CK
WILLEM C. HENKE, WILLEM T. HENKE,
TERRENCE REAGAN, and MARY ANN
REAGAN,
Defendants-Appellees.
Before: Whitbeck, C.J., and Bandstra, and Markey, JJ.
PER CURIAM.
Plaintiff appeals by right an order granting summary disposition in favor of defendants
under MCR 2.116(C)(10). Plaintiff had sought a declaratory judgment that it had no duty to
indemnify or defend the defendants in the underlying action. We reverse.
In the underlying action, Terrence and Mary Ann Reagan filed suit against Willem C. and
Willem T. Henke for damages sustained when Willem T. Henke drove his truck in such a
manner that a tank carrying ammonium nitrate fell off the truck and spilled. As a result,
hundreds of gallons of ammonium nitrate migrated onto the Reagans’ property. Plaintiff, the
Henkes’ insurer, filed a complaint seeking a declaratory judgment that it had no duty to
indemnify or defend the Henkes in the underlying action because the damages arose out of the
use or operation of a motor vehicle. The trial court disagreed and granted summary disposition
in favor of defendants.
We review the grant or denial of a motion for summary disposition de novo. Henderson
v State Farm Fire & Casualty Co, 460 Mich 348, 353; 596 NW2d 190 (1999). Further, the
construction and interpretation of an insurance contract as well as the alleged ambiguity of the
contract language are questions of law we review de novo. Id.
Plaintiff contends it has no duty to defend or indemnify the Henkes in the underlying
action because the farmowner’s policy contains a motor vehicle exclusion, which precludes
coverage where damages arise out of the use or operation of a motor vehicle. We agree.
The insurer must provide a defense where the allegations of a third party even arguably
come within the policy coverage. American Bumper & Mfg Co v Hartford Fire Ins Co, 452
-1-
Mich 440, 450-451; 550 NW2d 475 (1996). If the policy does not apply, however, there is no
duty to defend. Id. at 450.
An insured’s claims are lost if any exclusion in the insurance policy applies. Hayley v
Allstate Ins Co, 262 Mich App 571, 574; 686 NW2d 273 (2005). Hence, exclusionary clauses in
insurance policies shall be strictly construed in favor of the insured. Id. But, a court must
enforce an insurance contract in accordance with its terms to avoid holding an insurance
company liable for a risk it did not assume. Henderson, supra at 354. Therefore, where an
exclusion in an insurance policy is clear and specific, the exclusion must be enforced. Hayley,
supra at 574. Further, when reviewing an exclusionary clause, the court should read the contract
as a whole to effectuate the overall intent of the parties. Id. at 575.
The motor vehicle exclusion found in Section II of the farmowner’s policy states that the
policy does not apply to “bodily injury or property damage arising out of the ownership,
maintenance, use, operation, loading or unloading, or entrustment to any person of any aircraft,
motor vehicle, or motorized land conveyance, including mopeds and trailers.”
The phrase “arising out of” has been defined in several contexts. See McKusick v
Travelers Indemnity, 246 Mich App 329, 340-341; 632 NW2d 525 (2003). In an insurance case,
however, causation should be determined as follows:
[W]hile the automobile need not be the proximate cause of the injury,
there still must be a causal connection between the injury sustained and the
ownership, maintenance or use of the automobile and which causal connection is
more than incidental, fortuitous or but for. The injury must be foreseeably
identifiable with the normal use, maintenance and ownership of the vehicle.
[Kangas v Aetna Casualty & Surety Co, 64 Mich App 1, 17; 235 NW2d 42
(1975).]
In Pacific Employers Ins Co v Michigan Mutual Ins Co, 452 Mich 218; 549 NW2d 872
(1996), a kindergarten student was struck by a car and injured shortly after the school bus driver
dropped her off at the wrong bus stop. The applicable insurance policy contained a motor
vehicle exclusion; therefore, it did not apply to bodily injury or property damage arising out of
the ownership, maintenance, operation, use, loading or unloading of any automobile. This Court
defined “use” narrowly “to encompass only those injuries arising from the carrying of persons
aboard the bus,” and so affirmed the trial court’s conclusion that the motor vehicle exclusion did
not apply. Id. at 223.
Our Supreme Court, however, noted that the word “use” has a broader connotation than
the words “operate” or “drive.” Id. at 226 n 11 (citations omitted). The Court concluded that the
bus driver had a duty both to carry passengers on the bus and to deliver each child at a
predetermined bus stop and that the bus driver “used’ the bus in carrying out those duties. Id. at
227. Consequently, when the driver dropped the student off at the wrong bus stop, the driver
“misused” the bus and, as a result, the child sustained a foreseeably identifiable injury. Id. at
229-230. Thus, the Court held that the motor vehicle exclusion applied because the child’s
injury arose out of the use of the school bus.
-2-
In this case, Henke had a duty to drive the truck and to deliver the ammonium nitrate
without causing harm to another’s person or property. Further, Henke “used” the truck in
carrying out those duties. When Henke drove off the driveway, the truck leaned, causing the
tank of ammonium nitrate to spill. The resulting injury, the spilling and migration of ammonium
nitrate, was a foreseeable result of Henke’s misuse of the truck. Thus, the damages indeed arose
out of the use or operation of the truck. Further, because the harm was closely connected with
the use or operation of a motor vehicle, we conclude that the motor vehicle exclusion precludes
coverage in this case. See State Farm Fire & Casualty Co v Huyghe, 144 Mich App 341; 375
NW2d 442 (1985).
We also reject the trial court’s conclusion that ambiguity exists regarding the limited
pollution coverage provided in section 10 of the farmowner’s policy. Section 10b provides
coverage for loss caused by the accidental application of farming chemicals; however, the
coverage is limited to the accidental dispersal of farming chemicals that fall upon the person or
property of others due to wind drift or unintentional overspray. Here, the ammonium nitrate did
not enter the Reagan’s property due to wind drift or unintentional overspray. Thus, the portion
of section 10b, providing coverage for loss caused by the accidental application of farming
chemicals does not apply.
Further, even though section 10b also provides coverage for bodily injury and property
damage caused by sudden and accidental pollution, the injury or damage must be “attributable to
the first 72 hours” of the pollution. Such coverage is excluded under the circumstances here.
Moreover, section 10b is limited by the exclusions set forth in Section II of the policy, including
the motor vehicle exclusion which is applicable for the reasons discussed earlier.
We hold that the motor vehicle exclusion precludes coverage under section 10b of the
farmowners policy; consequently, plaintiff does not have a duty to indemnify or defend the
Henkes in the underlying action.
We reverse.
/s/ William C. Whitbeck
/s/ Richard A. Bandstra
/s/ Jane E. Markey
-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.