Opinion
Docket Nos. 109258, 109476.
Decided September 5, 1989. Leave to appeal applied for.
McDonald Marin (by William I. McDonald), for Farm Bureau Mutual Insurance Company.
Michael G. Summers, for Timothy and Patrick Stark.
Kendricks, Bordeau, Adamini, Keefe, Smith Girard, P.C. (by Ronald D. Keefe), for Karl and Opal Helwig.
Before: MURPHY, P.J., and MacKENZIE and GRIFFIN, JJ.
In these consolidated appeals, the circuit court entered a judgment in favor of plaintiff, Farm Bureau Mutual Insurance Company. Essentially, the lower court concluded that plaintiff's homeowner's policy issued to defendant Timothy Stark excluded coverage for an accident in which Timothy Stark's minor son, Patrick Stark, who was riding a moped, struck and injured intervening defendant Karl Helwig. Moreover, the court concluded that plaintiff had no obligation to defend the Starks in a personal injury action brought against them by the Helwigs. The Starks now appeal as of right challenging the lower court's judgment in Docket No. 109476 and the Helwigs, as intervening defendants, likewise challenge the lower court's judgment in Docket No. 109258. The appeals were consolidated by the Court of Appeals.
On August 13, 1985, Karl Helwig was struck and injured by a moped owned by Timothy Stark and operated by his minor son, Patrick. This matter commenced with the Helwigs filing a personal injury suit against the Starks. Plaintiff then filed a complaint seeking a declaratory judgment that it was not obligated to provide coverage for the accident and that it had no duty to defend the Starks in the action brought against them by the Helwigs. The Starks then counterclaimed in the declaratory action alleging that plaintiff was contractually obligated to both defend and to provide coverage for the accident. The Helwigs then intervened in the declaratory action. All three parties filed competing summary disposition motions pursuant to MCR 2.116(C)(10), no genuine issue of material fact. The court issued an opinion concluding that Timothy Stark's moped was a land motor vehicle which was properly excluded from coverage under plaintiff's homeowner's policy and that plaintiff had no duty to defend the Starks on the Helwigs' suit. Both the Starks and Helwigs now appeal as of right.
Appellants first claim that the circuit court erred in finding that plaintiff's policy was unambiguous in its exclusion of mopeds as being motor vehicles. We agree.
This Court in Engel v Credit Life Ins Co, 145 Mich. App. 55, 61; 377 N.W.2d 342 (1985), stated:
An ambiguous contract provision must be construed against the insurer/drafter and in favor of the insured. Kast v Citizens Mutual Ins Co, 125 Mich. App. 309; 336 N.W.2d 18 (1983); Usher v St. Paul Fire Marine Ins Co, 126 Mich. App. 443; 337 N.W.2d 351 (1983); Farm Bureau Mutual Ins Co of Michigan v Hoag, 136 Mich. App. 326; 356 N.W.2d 630 (1984); Reurink Bros Star Silo, Inc v Maryland Casualty Co, 131 Mich. App. 139; 345 N.W.2d 659 (1983). "[I]t is hornbook law that insurance contract ambiguity is construed against the drafter, the insurer." Mays v Ins Co of North America, 407 Mich. 165, 172; 284 N.W.2d 256 (1979).
In particular, exclusionary clauses in insurance policies are to be strictly construed against the insurer. Arrigo's Fleet Service, Inc v Aetna Life Casualty Co, 54 Mich. App. 482; 221 N.W.2d 206 (1974), lv den 392 Mich. 812 (1974); Reurink Bros, supra.
Plaintiff's homeowner's policy issued to Timothy Stark excluded coverage for personal liability and medical payments to others arising out of the ownership, maintenance or use, including the loading or unloading, of motor vehicles, aircraft, or watercraft. Specifically, the pertinent policy language provided the following:
EXCLUSIONS — SECTION II
This policy does not apply:
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(b) under Coverages A and B, to the ownership, maintenance or use, including the loading or unloading of (1) motor vehicles, but this exclusion does not apply to bodily injury or property damage occurring on the residence premises if the motor vehicle is not subject to motor vehicle registration because it is used exclusively on the residence premises or kept in dead storage on the residence premises; or (2) aircraft, or (3) watercraft having inboard or inboard-outboard motor power of more than 50 horsepower or is a sailing vessel (with or without auxiliary power) 26 feet or more in overall length, but with respect to injury sustained by a residence employee while engaged in the employment of the Insured, part (1) of this exclusion does not apply;
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(i) under Coverages A and B, to any Recreational Motor Vehicle subject to the Motor Vehicle Registration Act or while any Recreational Vehicle:
(1) is used to carry persons for a charge;
(2) is used for business purposes;
(3) is rented to others; or
(4) is being operated in any prearranged or organized race, speed contest or other competitions.
This Court in Westen v Karwat, 157 Mich. App. 261; 403 N.W.2d 115 (1987), was called upon to determine whether similar homeowner's policy language had properly excluded coverage because a moped fell within the policy's definition of a motor vehicle. In Westen, the plaintiff was the personal representative of the estate of a girl who died from injuries suffered after she was struck by a moped. The trial court held that a moped was a motor vehicle under the terms of the exclusion in the insurance policy. The policy in Westen defined "motor vehicle" almost identically as it is defined in the instant case. The only difference is that in Westen a motor vehicle was defined as not including a crawler or farm-type tractor and farm implement, while in this case a motor vehicle is defined as not including a farm trailer, farm tractor and farm implement. The policy here states:
c. "motor vehicle": means a land motor vehicle, trailer or semi-trailer designed for travel on public roads (including any machinery or apparatus attached thereto) but does not include, except while being towed by or carried on a motor vehicle, any of the following: utility, boat, camp or home trailer, recreational motor vehicle, farm trailer, farm tractor, farm implement or, if not subject to motor vehicle registration, any equipment which is designed for use principally off public roads.
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f. "recreational motor vehicles": means (1) a golf cart or snowmobile or (2) if not subject to motor vehicle registration, any other land motor vehicle designed for recreational use off public roads.
This Court in Westen concluded that coverage would be allowed because the term motor vehicle was ambiguous, offering no guidance whatsoever as to whether mopeds fell within the definition.
[W]e find that the term "motor vehicle" is ambiguous and should be construed against the insurer. Home Owners defines the term "motor vehicle" by adding the word "land" and then listing two other vehicles which qualify as motor vehicles and nine vehicles which do not, without any guidance as to whether mopeds qualify. A description of the physical characteristics of a motor vehicle would have been more helpful. Without such a physical description against which to measure a moped and no specific mention of moped in the lists of vehicles included or excluded from the definition of "motor vehicle" the term is ambiguous and we will construe it against the insurer, allowing insurance coverage for plaintiff's claim. [ Westen, supra, p 264.]
We are persuaded that the reasoning employed by this Court in Westen is equally applicable to the facts of this case. Although the trial court chose not to follow Westen as binding authority, we hold that the court erred in concluding that the language in this policy is not so ambiguous as to require the result reached in Westen.
We also note that another panel of this Court in Fire Ins Exchange v Fox, 167 Mich. App. 710; 423 N.W.2d 325 (1988), reached a result contrary to that in Westen. However, the policy provision in Fire Ins Exchange defined motor vehicle as "a motorized land vehicle, including a trailer, semi-trailer or motorized bicycle, designed for travel on public roads." (Emphasis added.) Because the policy language in the instant case is for all intents and purposes identical to the language construed by this Court in Westen, and the policy exclusion in this case did not specifically exclude coverage for motorized bicycles designed for travel on public roads, we conclude that plaintiff did not sufficiently exclude coverage for accidents involving mopeds. Having determined that reversal is required on this issue, we need not address appellants' remaining claims of error.
Reversed and remanded for proceedings consistent with this opinion.
GRIFFIN, J., concurred.
MacKENZIE, J., concurred with the majority to the extent that she agrees the trial court should have followed Westen.