Opinion
No. 346995
04-23-2020
LA TANYA HURT, Plaintiff-Appellant, v. DEPOSITORS INSURANCE COMPANY, Defendant-Appellee.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Wayne Circuit Court
LC No. 18-004001-CZ Before: RIORDAN, P.J., and FORT HOOD and SWARTZLE, JJ. PER CURIAM.
Plaintiff appeals as of right the trial court's order granting summary disposition to defendant and dismissing plaintiff's claim with prejudice. We affirm.
This case arises out of a fire that occurred in plaintiff's home on April 12, 2012. At the time of the fire, plaintiff had a homeowners policy issued by defendant, covering a period from May 12, 2011 to May 12, 2012. Plaintiff filed a claim with defendant, and on April 12, 2012, defendant sent a response letter to plaintiff acknowledging receipt of her claim regarding fire damage to her home. Defendant requested that plaintiff return a sworn statement in proof of loss within 60 days. The response contained the proof of loss form and instructions on how to complete the form. In the lower court, plaintiff's counsel conceded that plaintiff never returned the sworn statement in proof of loss.
Following the fire, certain garments damaged in the fire were sent to Buckeye Dry Cleaners for cleaning and restoration. On May 22, 2012, defendant made an actual cash value payment to plaintiff for personal property or contents in the amount of $29,534.70. On May 22, 2012, defendant also made a payment to Buckeye Dry Cleaners for $13,923.72. On July 24, 2012, plaintiff provided defendant with additional "contents replacement receipts," totaling $916.97. Defendant made a payment to plaintiff for $916.97. When plaintiff made no further claims for personal properly loss by October 9, 2013, defendant closed plaintiff's claim file. On June 30, 2017, plaintiff sent a letter to defendant demanding an appraisal for personal property lost in the April 12, 2012 fire. Defendant denied plaintiff's request for an appraisal of personal property, noting that plaintiff was barred from coverage under the policy.
On April 11, 2018, plaintiff filed a complaint to appoint an insurance appraiser alleging that defendant breached its contractual duty when it refused to appoint an insurance appraiser to participate in the insurance appraisal process in accordance with the homeowners policy. Defendant filed a motion for summary disposition arguing that plaintiff was not entitled to an appraisal for personal property loss because she did not have coverage under the policy since (1) she failed to return a sworn statement in proof of loss within 60 days, (2) she was barred by the "Suit Against Us" provision because she failed to comply with the conditions of the policy and failed to file suit within one year of the date of loss, and (3) she failed to make an additional claim for personal property within, at most, one year and 180 days of the date of loss. Plaintiff filed a response arguing that, although failure to return a sworn statement in proof of loss is grounds to deny a claim, defendant never denied plaintiff's claim for property loss. Plaintiff also argued that the statute of limitations did not go into effect because defendant never denied plaintiff's claim. At the hearing on defendant's motion for summary disposition, plaintiff's counsel argued that plaintiff never received defendant's request that she return a sworn statement in proof of loss because defendant sent the request to plaintiff's uninhabitable home. The court granted summary disposition for defendant, concluding that plaintiff was barred from coverage because she was required to return the sworn statement in proof of loss by June 11, 2012, and plaintiff failed to make her claim for personal property as required by the policy. This appeal follows.
I. STANDARD OF REVIEW
This Court reviews a trial court's decision on a motion for summary disposition de novo. Bodnar v St John Providence, Inc, 327 Mich App 203, 211; 933 NW2d 363 (2019). A motion under MCR 2.116(C)(10) tests the factual sufficiency of a claim. El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 160; 934 NW2d 665 (2019). A trial court's grant of summary disposition under MCR 2.116(C)(10) is proper when the evidence, "viewed in the light most favorable to the nonmoving party, show[s] that there is no genuine issue as to any material fact and the moving party is therefore entitled to judgment as a matter of law." Lowrey v LMPS & LMPJ, Inc, 500 Mich 1, 5-6; 890 NW2d 344 (2016). "A genuine issue of material fact exists when the record leaves open an issue upon which reasonable minds might differ." El-Khalil, 504 Mich at 160 (citation and quotation marks omitted). "This Court reviews de novo questions of statutory interpretation." Tree City Props, LLC v Perkey, 327 Mich App 244, 247; 933 NW2d 704 (2019).
"An insurance policy is subject to the same contract construction principles that apply to any other species of contract." Home-Owners Ins Co v Perkins, 328 Mich App 570, 585; 939 NW2d 705 (2019) (citation and quotation marks omitted). "[U]nless a contract provision violates law or one of the traditional defenses to the enforceability of a contract applies, a court must construe and apply unambiguous contract provisions as written." Id. (citation and quotation marks omitted). "A generally recognized principle of insurance law is that the burden of proof lies with the insured to show that the policy covered the damage suffered." Pioneer State Mut Ins Co v Dells, 301 Mich App 368, 378; 836 NW2d 257 (2013) (citation and quotation marks omitted). "While the burden of proving coverage is on the insured, it is incumbent on the insurer to prove that an exclusion to coverage is applicable." Id. "While exclusions are strictly construed in favor of the insured, this Court will read the insurance contract as a whole to effectuate the intent of the parties and enforce clear and specific exclusions." Id. at 378-379.
"The primary goal of statutory interpretation is to give effect to the intent of the Legislature." Home-Owners Ins Co, 328 Mich App at 579-580. "The first criterion in determining intent is the specific language of the statute." Id. at 580 (citation and quotation marks omitted). "If the language of a statute is clear and unambiguous, the statute must be enforced as written and no further judicial construction is permitted." Id. (citation and quotation marks omitted).
II. FAILURE TO SUBMIT A SWORN STATEMENT IN PROOF OF LOSS
Plaintiff argues that the trial court erred in granting summary disposition for defendant because there is a genuine issue of material fact as to whether she ever received defendant's request that she return the sworn statement in proof of loss. Defendant contends, however, that the trial court's decision to grant summary disposition to defendant on the basis that plaintiff is barred from coverage because she failed to return the sworn statement in proof of loss within 60 days of defendant's request is consistent with this Court's long history of holding that an insured cannot recover when she fails to return the sworn statement in proof of loss. In addition, defendant contends that plaintiff's failure to return this statement prevents her from bringing suit under the "Suit Against Us" provision of the homeowners policy.
The "Suit Against Us" provision provides:
No Action can be brought unless the policy provisions have been complied with and the action is started within one year after the date of loss. The time for commencing an action is tolled from the time the "insured" notified the insurer of the loss until the insurer formally denies liability.
The "Duties After Loss" provision provides, in relevant part:
Duties After Loss
In case of a loss to covered property, these duties must be performed either by you, an "insured" seeking coverage, or a representative:
6. Prepare and inventory of damaged personal property showing the quantity, description, "actual cash value" and amount of loss. Attach all bills, receipts and related documents that justify the figures in the inventory;
* * *
8. Send to us, within 60 days after our request, your signed, sworn proof of loss which sets forth, to the best of your knowledge and belief:
a. The time and cause of loss;
b. The interests of the 'insureds' and all others in the property involved and all liens on the property;
c. Other insurance which may cover the loss;
d. Changes in title or occupancy of the property during the term of the policy;
e. Specifications of damaged buildings and detailed repair estimates;
f. The inventory of damaged personal property described in 6. above;
g. Receipts for additional living expenses incurred and records that support the fair rental value loss; and
h. Evidence or affidavit that supports a claim under E.6. Credit Card, Electronic Fund Transfer Card Or Access Device, Forgery and Counterfeit Money under SECTION I - PROPERTY COVERAGES, stating the amount and cause of loss.
Defendant is correct that this Court has long held that the return of a sworn statement in proof of loss is a condition precedent to coverage. Dellar v Frankenmuth Mut Ins Co, 173 Mich App 138, 145; 433 NW2d 380 (1988) ("Clearly, the failure to file a signed and sworn proof of loss within sixty days of the loss bars recovery on a claim without regard to whether the insurer is prejudiced by such failure."); Reynolds v Allstate Ins Co, 123 Mich App 488, 490; 332 NW2d 583 (1983) (holding that the trial court properly granted summary disposition to the defendant because the plaintiff failed to file a written proof of loss within 60 days of the loss). And, there is no dispute that plaintiff did not submit a sworn statement in proof of loss to defendant at any time after the loss. Plaintiff argues, however, that her failure to return the sworn statement in proof of loss within 60 days cannot bar her claim because the 60-day period "does not begin to run until the Insurer specifies in writing the materials that constitute a satisfactory proof of loss pursuant to MCL 500.2006(3)."
Under MCL 500.2006(3), "[a]n insurer shall specify in writing the materials that constitute a satisfactory proof of loss not later than 30 days after receipt of a claim unless the claim is settled within the 30 days." In Dellar, this Court declined to hold, as a matter of law, that performance by an insurer under MCL 500.2006(3) is a condition precedent to an insured's duty to provide a sworn proof of loss. Dellar, 173 Mich App at 144. The Dellar Court did, however, hold that an insurers breach "of such duty is a factor relevant to whether an insurer is estopped from asserting as a defense to payment of an otherwise valid claim the failure on the part of the insured to file a proof of loss." Id. However, in Angott v Chubb Group Ins Co, 270 Mich App 465, 485; 717 NW2d 341 (2006), overruled on other grounds by Griswold Props, LLC v Lexington Ins Co, 276 Mich App 551, 553 (2007), this Court held that, if the defendant failed to comply with MCL 500.2006(3) by specifying in writing the materials that constitute a satisfactory proof of loss, "[the] plaintiff was excused from submitting a proof of loss and the matter shall proceed as if a satisfactory proof of loss were submitted." Angott, 270 Mich App at 486.
Thus, plaintiff argues that, consistent with the Angott holding, her duty to return the sworn statement in proof of loss did not trigger until defendant specified in writing the materials that constitute a satisfactory proof of loss in accordance with MCL 500.2006(3). Accordingly, plaintiff contends that, if she did not receive defendant's request, she did not have a duty to return it. Plaintiff argues that the proper way to resolve this issue is to apply the mailbox rule to determine whether there is a question of fact as to whether plaintiff received defendant's request. Specifically, plaintiff asserts: "[i]nasmuch as MCL 500.2006(3) requires the Insurer to specify in writing the materials that constitute a satisfactory proof of loss within 30 days after receipt of a claim, this comes down to the proper application of the mail box [sic] rule," and under the mailbox rule, "the question is whether [defendant's] letter specifying the form of proof of loss materials was properly addressed to [plaintiff] at her uninhabited fire damaged home[.]" Plaintiff relies on our Supreme Court's holding in Goodyear Tire & Rubber Co v Roseville, 468 Mich 947, 947 (2003), in which the Court set forth the principles of the mailbox rule:
While a presumption arises that a letter with a proper address and postage will, when placed in the mail, be delivered by the postal service, this presumption can be rebutted with evidence that the letter was not received. If such evidence is presented . . . then a question of fact arises regarding whether the letter was received. [Citation omitted.]
Plaintiff contends that there is a genuine issue of material fact as to whether she received defendant's request because defendant improperly sent it to her fire damaged house, and she filed her own affidavit in which she stated that she never received defendant's request for a sworn statement in proof of loss. Thus, plaintiff contends that the only way she could have a contractual duty to return the sworn statement in proof of loss is if she actually received defendant's request.
Neither the Angott holding, MCL 500.2006(3), nor the insurance policy at issue here consider the insured's receipt of the insurer's written request that a sworn statement in proof of loss be returned. The plain language of MCL 500.2006(3) states that "[a]n insurer shall specify in writing the materials that constitute a satisfactory proof of loss not later than 30 days after receipt of a claim unless the claim is settled within the 30 days." The language neither states that the insurer's duty is fulfilled only upon receipt of the writing nor does it state that the insured's obligation to complete the sworn statement in proof of loss only triggers upon receipt of the request. Moreover, Angott does not stand for the proposition that, despite the insurer sending a written request that specifies the materials necessary for a satisfactory sworn statement in proof of loss, an insured is not barred from coverage because the insured failed to receive it. Angott, 270 Mich App at 476-477.
It is also worth noting that, in Angott, the plaintiff did send a statement in proof of loss, but the defendant found the proof of loss to be unsatisfactory. Angott, 270 Mich App at 476-477. The same is not true of this case.
In addition, the policy provision at issue in this case states that the insured's duty after loss was to "[s]end to [the insurer], within 60 days after our request, your signed, sworn proof of loss." The 60-day period is triggered upon the insurer's request, not upon the insured's receipt of the request. Moreover, defendant's letter requesting that plaintiff return the sworn statement in proof of loss, which was dated April 12, 2012, stated: "This form is your formal, legal claim and must be returned within sixty (60) days, unless such time is extended in writing by [defendant]." Again, the letter did not make plaintiff's receipt of the request the date upon which the 60-day period triggered.
The record indicates that defendant sent to plaintiff a request for the sworn statement in proof of loss. Defendant presented evidence that, on April 12, 2012, it sent plaintiff a letter acknowledging her claim of fire damage and requesting that plaintiff submit a sworn statement in proof of loss within 60 days. The letter included a list of instructions as to how to complete the sworn statement in proof of loss form. Attached to the letter was the actual sworn statement in proof of loss form. In addition, following plaintiff's June 30, 2017 demand for an appraisal, defendant responded on July 31, 2017, explaining that plaintiff was not covered under the insurance policy, in part, because plaintiff failed to return the sworn statement in proof loss within 60 days in accordance with the homeowners policy, despite the fact that defendant requested that she do so in correspondence sent on April 12, 2012. Thus, defendant presented evidence that it sent the sworn statement in proof of loss to plaintiff and requested that it be returned within 60 days of the request. Plaintiff does not seem to contest that it was sent. Nor does plaintiff contest that defendant specified what materials were needed to constitute a satisfactory proof of loss. Plaintiff's focus is on the fact that defendant sent the request for the sworn statement in proof of loss to her home, and she never received it.
There is no indication in the record that plaintiff was incapable of receiving mail at her home or that she provided to defendant a different mailing address immediately after the fire. Letters other than the April 12, 2012 letter were sent to plaintiff's home following the fire. A letter was addressed to plaintiff's home on May 22, 2012, which explained to plaintiff that she qualified for Additional Living Expenses, and on May 23, 2012, a letter was addressed to plaintiff's home explaining the amount she was to receive in her dwelling and personal property payments. There is no indication that plaintiff failed to receive defendant's other correspondence.
In addition, in Casey v Auto Owners Ins Co, 273 Mich App 388, 394-395; 729 NW2d 277 (2006), this Court explained that an insured has an obligation to read her insurance policy:
It is well established that an insured is obligated to read his or her insurance policy and raise any questions about the coverage within a reasonable time after the policy is issued. Consistent with this obligation, if the insured has not read the policy, he or she is nevertheless charged with knowledge of the terms and conditions of the insurance policy.Plaintiff does not argue that defendant failed to provide her with her homeowners policy, or that she was unaware of the provisions contained within.
In summation, defendant did not breach its duty to specify in writing, within 30 days of receipt of the claim, the materials that constitute a satisfactory proof of loss, and therefore, plaintiff is barred from receiving an appraisal of her personal property. In addition, plaintiff is barred from bringing an action against defendant in accordance with the "Suit Against Us" provision because plaintiff failed to comply with all policy provisions. Therefore, the trial court did not err in granting summary disposition to defendant.
III. PERSONAL PROPERTY REPLACEMENT COST ENDORSEMENT
Defendant also contends that plaintiff failed to comply with the "Personal Property Replacement Cost Endorsement" provision of the homeowners policy, which states:
E. IF YOU RECEIVE A SETTLEMENT UNDER THIS POLICY FOR PERSONAL PROPERTY ON AN "ACTUAL CASH VALUE" BASIS,
YOU MAY THEN MAKE AN ADDITIONAL CLAIM FOR PAYMENT ON A REPLACEMENT COST BASIS PROVIDED:
1. REPAIR AND REPLACEMENT IS COMPLETED WITHIN 1 YEAR OF THE DATE OF LOSS UNLESS YOU REQUEST IN WRITING THAT THIS TIME LIMIT BE EXTENDED FOR AN ADDITIONAL 180 DAYS; AND
2. YOU HAVE NOT REACHED THE APPLICABLE LIMIT OF LIABILITY UNDER THIS POLICY.
F. REPAIR OR REPLACEMENT MUST BE EVIDENCED BY THE ORIGINAL OF THE REPLACEMENT RECEIPT, INVOICE OR BILL.
Following the fire, clothing damaged in the fire was given to Buckeye Dry Cleaners to perform cleaning and restoration. On May 22, 2012, defendant made a payment to plaintiff for personal property on an actual cash value basis for $29,534.70. On May 22, 2012, defendant also made a payment to Buckeye Dry Cleaners for $13,923.72. On March 7, 2013, plaintiff contacted defendant's claims department and reported that she had not heard from Matt at Buckeye Dry Cleaners regarding her coat and "replacements." On October 9, 2013, when plaintiff had made no additional claims, defendant closed her claim file. There is no indication that plaintiff contacted defendant to report that any of her garments were lost or damaged by Buckeye Dry Cleaners until June 30, 2017, when plaintiff requested an appraisal for her personal property contents. Plaintiff asserts that Buckeye Dry Cleaners did not deliver or return to plaintiff approximately 10 to 15 "sampling garments," and otherwise delivered or returned damaged garments to plaintiff.
On appeal, plaintiff contends that, because the garments were sent to Buckeye Dry Cleaners to be cleaned and were either damaged or lost while there, plaintiff is entitled to the "actual cash value" of the garments, not the "replacement cost." Plaintiff also contends that, because she is only requesting that "actual cash value," she did not have to replace the garments in a timely manner, and accordingly, defendant's argument that plaintiff was only entitled to replacement garments within one year is inapposite.
It appears that plaintiff is relying on the following statement in Dupree v Auto-Owners Ins Co, 497 Mich 1, 6; 857 NW2d 247 (2014), to argue that she is entitled to the actual cash value of the lost or damaged garments: "failure to submit proof of actual loss in accordance with that provision entitles her to only the actual cash value of her damaged personal property." Dupree does not support plaintiff's argument. In Dupree, after a fire in her home, the plaintiff sought coverage under her homeowners policy. Id. at 1. When the defendant and the plaintiff could not agree on the extent of the plaintiff's personal property loss, the parties had their respective appraisers appraise the value of the plaintiff's property in accordance with the appraisal provision of the homeowners policy. Id. at 1-2. An appraisal panel assessed the replacement value of her personal property at $167,923.60, with an applicable depreciation value of $39,673.48, which left an actual cash value of $128,250.12. Id. at 3. The defendant compensated the plaintiff for the actual cash value but refused to pay the replacement cost because the plaintiff failed to comply with the replacement cost provision, which required that she submit proof that she actually replaced her personal property. Id. at 4. The plaintiff sued to recover the depreciation value. Id. On appeal to the Supreme Court, the sole issue before the Court was whether the plaintiff was entitled to only the actual cash value or the actual cash value plus the applicable depreciation amount. Id. The Court ultimately determined that "[b]ecause the appraisal award cannot be read as a 'conclusive' judgment for replacement cost, the terms of the replacement cost provision under the insurance policy control the scope of [the] plaintiff's appraisal award." Id. at 6. The Court stated that, under the policy, the plaintiff's submission of proof of actual loss was a condition precedent to the defendant paying the full replacement value. Id. Accordingly, the Court held that "[the] plaintiff's failure to submit proof of actual loss in accordance with that provision entitles her to only the actual cash value of her damaged personal property." Id.
Dupree did not consider whether an insured could recover for additional losses not included in the settlement agreement for the actual cash value of personal property after the applicable time to repair or replace the personal property had passed. Thus, plaintiff's contention that she is entitled to the actual cash value of garments, on the basis of the Dupree holding, is without merit. Defendant made an actual cash value payment for personal property on May 22, 2012. Under the policy, if plaintiff intended to make additional claims for personal property, she needed to present proof that repair or replacement had occurred within one year of the date of loss—April 12, 2013. Plaintiff does not contend that she notified defendant of any further loss or need for replacement cost regarding her garments after she received the payment for actual cash value of her personal property on May 22, 2012, prior to her request for an appraisal on June 30, 2017. Plaintiff has not presented receipts or any proof that she repaired or replaced her garments. Because plaintiff failed to make a claim for additional personal property consistent with the policy provisions, plaintiff is also barred from any further personal property coverage on this ground.
On appeal, plaintiff maintains that she was entitled to appraisal for jewelry lost in the fire. This argument need not be addressed because plaintiff's counsel waived this argument during the hearing on defendant's motion for summary disposition. "A waiver consists of the intentional relinquishment or abandonment of a known right." Patel v Patel, 324 Mich App 631, 634; 922 NW2d 647 (2018). "A party who waives a right is precluded from seeking appellate review based on a denial of that right because waiver eliminates any error." Hodge v Parks, 303 Mich App 552, 556; 844 NW2d 189 (2014) (citation and quotations omitted).
Because plaintiff was barred from coverage under the homeowners policy, we do not need to address defendant's alternative ground for affirmance—whether plaintiff's claim was barred by the one-year statute of limitations.
Affirmed.
/s/ Michael J. Riordan
/s/ Karen M. Fort Hood
/s/ Brock A. Swartzle