STANLEY NOKIELSKI V JOHN COLTON
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STATE OF MICHIGAN
COURT OF APPEALS
STANLEY NOKIELSKI and BETHANY
NOKIELSKI,
UNPUBLISHED
January 4, 2011
Plaintiffs,
v
No. 294143
Midland Circuit Court
LC No. 08-3177-NI-L
JOHN COLTON and ESTHER POLLY HOYCOLTON,
Defendants/Third Party PlaintiffsAppellants,
v
A.S. ARBURY & SONS, INC., RONALD
MILLER, and CINCINNATI INSURANCE
COMPANY,
Third Party Defendants-Appellees.
Before: BECKERING, P.J., and TALBOT and OWENS, JJ.
PER CURIAM.
In this insurance coverage case, defendants/third-party plaintiffs John and Esther Colton
(the Coltons) appeal as of right from a grant of third-party defendants’ motion for summary
disposition under MCR 2.116(C)(10). We affirm.
This case arises from an automobile/pedestrian accident. Defendant John Colton was
driving through a parking lot when he struck and severely injured Stanley Nokielski with his car.
Nokielski filed suit against the Coltons. The Coltons maintained automobile insurance through
USAA1 Insurance Company2 with a $100,000 per person, $200,000 per accident coverage limit.
1
United Services Automobile Association
2
USAA is not a party to this appeal.
-1-
The Coltons also maintained an umbrella insurance policy underwritten by third-party defendant
Cincinnati Insurance,3 which was purchased through third-party defendant/appellee A.S. Arbury
and Sons, Inc. (Arbury). This umbrella policy had a $1,000,000 limit, but according to its terms,
the Coltons were required to maintain $500,000 in underlying coverage. As a result, there was a
$400,000 gap in coverage between the USAA policy and the Cincinnati umbrella policy.
In her deposition, Mrs. Colton testified that after her first husband died in 1996, she
assumed responsibility for insurance matters that her husband had previously handled. After his
death, she simply paid the bills and never read the policies or called the Arbury office. Mrs.
Colton stated that she had no recollection of discussing her umbrella policy with anyone at
Arbury, nor did she even know she had an umbrella policy until after the accident.
In 1999, Mrs. Colton married Mr. Colton and added him to her policy. In November
2002, she called to cancel all of her automobile coverage. The Coltons then purchased
automobile coverage from USAA, which is where Mr. Colton had previously held his insurance
policies. Arbury’s records indicate that someone at the agency sent Mrs. Colton a letter on
August 31, 2004 requesting information concerning the level of coverage provided by her new
automobile policy with USAA. In June of 2005 Arbury sent her another letter asking for her
insurance information with USAA and a reminder was sent on June 22, 2005 to furnish that
information. Neither Mr. nor Mrs. Colton responded to these letters nor could they recall ever
having received those letters.
Tracy Willey, a customer service representative at Arbury, testified that she spoke with
Mr. Colton by phone on August 31, 2004 and explained to him that Cincinnati Insurance
Company, as the umbrella carrier, needed to know the liability coverage of the USAA policy.
Mr. Colton refused to give her the information, stating “if Cincinnati wants that, they can call me
direct.” He also told Willey, “I got a better price over there [USAA], that’s the only thing you
need to know.” Willey then advised Cincinnati Insurance Company of Mr. Colton’s refusal to
tell her this information.
Mr. Colton testified that he too first became aware of the umbrella policy after the
accident. He stated that he had no recollection of anyone from Arbury ever contacting him about
his USAA policy.
The Coltons filed a third-party suit against Arbury alleging negligence arising out of their
representation of the Coltons in securing the umbrella policy. Arbury filed a motion for
summary disposition, which was granted by the trial court.
On appeal, a trial court’s decision on a motion for summary disposition is reviewed de
novo. Latham v Barton Malow Co, 480 Mich 105, 111; 746 NW2d 868 (2008). This Court must
review the record in the same manner as must the trial court to determine whether the movant
was entitled to judgment as a matter of law. Morales v Auto-Owners Ins, 458 Mich 288, 294;
3
Cincinnati is not a party to this appeal.
-2-
582 NW2d 776 (1998); Scalise v Boy Scouts of America, 265 Mich App 1, 10; 692 NW2d 858
(2005). Review is limited to the evidence that had been presented to the trial court at the time
the motion was decided. Innovative Adult Foster Care, Inc v Ragin, 285 Mich App 466, 472;
776 NW2d 398 (2009).
The trial court did not err by granting Arbury’s motion for summary disposition.
Summary disposition of all or part of a claim or defense may be granted when
[e]xcept as to the amount of damages, there is no genuine issue as to any
material fact, and the moving party is entitled to judgment or partial judgment as a
matter of law. [MCR 2.116(C)(10).]
A motion for summary disposition under MCR 2.116(C)(10) tests the factual sufficiency
of the complaint. Corley v Detroit Bd of Ed, 470 Mich 274, 278; 681 NW2d 342 (2004). The
purpose of summary disposition is to avoid extensive discovery and an evidentiary hearing when
a case can be quickly resolved on an issue of law. Shepherd Montessori Center Milan v Ann
Arbor Twp, 259 Mich App 315, 324; 675 NW2d 271 (2003), lv den 471 Mich 877 (2004).
The moving party must specifically identify the matters that have no disputed factual
issues, and has the initial burden of supporting his position by affidavits, depositions,
admissions, or other documentary evidence. MCR 2.116(G)(3)(b); MCR 2.116(G)(4); Coblentz
v Novi, 475 Mich 558, 569; 719 NW2d 73 (2006). The party opposing the motion then has the
burden of showing by evidentiary materials that a genuine issue of disputed fact exists, MCR
2.116(G)(4).
In a negligence action, a plaintiff must show that the defendant owed the plaintiff a duty,
that the defendant breached that duty, causation, and damages. Case v Consumers Power Co,
463 Mich 1, 6; 615 NW2d 17 (2000). “Whether a duty exists is a question of law that is solely
for the court to decide.” Murdock v Higgins, 454 Mich 46, 53; 559 NW2d 639 (1997). Pressey
Enterprises, Inc v Barnett-France Ins Agency, 271 Mich App 685, 687; 724 NW2d 503 (2006).
Here, the trial court applied the standard in Harts v Farmers Ins Exch, 461 Mich 1; 597
NW2d 47 (1999), and ruled that plaintiffs had failed to produce evidence demonstrating the
applicability of any exception to the general rule that insurance agents do not owe an affirmative
duty to advise or counsel an insured about the adequacy or availability of coverage.
The Coltons argue that Harts, 461 Mich 1, is inapplicable because it only applies to cases
involving captive insurance agents, and this case involves independent agents.4 In Harts, the
4
Insurance agents who work exclusively for one insurance company are known as “captive
agents.” (www.bls.gov/oco/ocos118.htm, United States Department of Labor, Bureau of Labor
-3-
plaintiffs owned an automobile that was covered by a no-fault insurance policy purchased from
the defendant insurer through one of its agents. Id. at 3. The plaintiff was involved in an
accident with an uninsured motorist and subsequently filed suit against that insurer and one of its
agents, claiming that the agent was negligent in selling them an inadequate insurance policy
because it did not have uninsured motorist coverage. Id. Our Supreme Court stated, “[w]hether
a duty exists is a question of law that is solely for the court to decide.” Id. at 6, citing Murdock v
Higgins, 454 Mich 46, 53; 559 NW2d 639 (1997). The Court then held that the general rule that
there is no affirmative duty for a licensed insurance agent to advise or counsel an insured about
the adequacy or availability of coverage changes when:
(1) the agent misrepresents the nature or extent of the coverage offered or
provided, (2) an ambiguous request is made that requires a clarification, (3) an
inquiry is made that may require advice and the agent, though he need not, gives
advice that is inaccurate, or (4) the agent assumes an additional duty by either
express agreement with or promise to the insured. [Harts, 461 Mich at 10-11.]
Although the defendant in Harts was a captive insurance agency, in our opinion, there is no
reason that would preclude the Harts test from applying to both types of agents. In fact, the
Harts Court stated:
We granted leave in this case to determine whether a licensed insurance agent
owes an affirmative duty to advise or counsel an insured about the adequacy or
availability of coverage. We hold that, except under very limited circumstances
not present in this case, an insurance agent owes no such duty to the insured.
[Harts, 461 Mich at 2].
The Harts Court did not specifically indicate that it only intended to address captive agents and
not independent agents. The Court made the following public policy argument, which we
conclude extends to both captive and independent insurance agents:
. . . [P]laintiffs encourage this Court to eliminate the general no-duty-to-advise
rule and replace it with a rule that would impose a duty to advise in cases such as
the one at bar, which, to be perfectly clear, would apparently be all cases
concerning the purchase of insurance. However, we decline this invitation in light
of the public policy established by the Legislature's active role in this area and the
previously noted compelling reasons that militate against the imposition of such a
duty. Rather, we agree with the Wisconsin Supreme Court in Nelson, supra at
683, 456 NW2d 343, which, when faced with such an issue, stated that “if such a
duty is to be imposed on the [insurance agent], it should be imposed as a statutory
one and not an implied judicial one.” See also, generally, O'Donnell v State Farm
Mut Automobile Ins Co, 404 Mich 524, 542; 273 NW2d 829 (1979). [Harts, 461
Mich at 11-12].
Statistics website, accessed December 1, 2010). Arbury purchased its clients' insurance from
multiple insurance companies, so would be considered an independent agency.
-4-
The Coltons argue that it does not make sense to apply the limited duty analysis from
Harts, to a situation such as this, where the agent is operating as “more than an order taker.” The
Harts Court noted that the Legislature has “distinguished between insurance agents and
insurance counselors, with agents being essentially order takers while it is insurance counselors
who function primarily as advisors” (footnotes omitted) Harts, 461 Mich at 9. Just because an
agent is independent, does not make him an insurance counselor, with a duty to advise.
Therefore, the Harts framework should be applied to the issue of whether Arbury had a duty, or
not.
When that framework is applied, we find that the trial court properly concluded that the
Coltons failed to establish that Arbury had a duty to inform them that there was a $400,000 gap
in their coverage. Regarding an insurance agent’s role, our Supreme Court has stated, “[t]his
limited role for the agent may seem unusually narrow, but it is well to recall that this is
consistent with an insured’s obligation to read the insurance policy and raise questions
concerning coverage within a reasonable time after the policy has been issued. Parmet Homes,
Inc v Republic Ins Co, 111 Mich App 140, 144; 314 NW2d 453 (1981).” Here, both of the
Coltons testified that they never read their policy or even knew of its existence until after the
accident.
A duty is created only when, “an event occurs that alters the nature of the relationship
between the agent and the insured.” Harts, 461 Mich at 11. A duty may arise when a special
relationship exists between an insurance company or its agent and the policy holder. Bruner v
League General Ins, 164 Mich App 28, 32; 416 NW2d 318 (1987). There also needs to be some
type of interaction on “a question or coverage” with the insured relying on the expertise of the
insurance agent to the insured’s detriment. Harts, 461 Mich at 10-11.
The Coltons’ testimony indicates that Arbury made no misrepresentation, there were no
ambiguous requests of Arbury from the Coltons, Arbury did not give the Coltons any inaccurate
advice; and, Arbury did not make any express agreement or promise to the Coltons. There could
not have been any detrimental reliance on the part of the Coltons, because they claim that they
did not even know about the umbrella policy until after the accident. Without this requisite
“special relationship” as established by Harts, the Coltons have failed to demonstrate that Arbury
owed them a duty, and, without a duty, there can be no negligence. Therefore, summary
disposition was proper.
Affirmed.
/s/ Jane M. Beckering
/s/ Michael J. Talbot
/s/ Donald S. Owens
-5-
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