Opinion
No. 1:01-CV-213
July 10, 2002
JUDGMENT
In accordance with an Opinion filed this day,
IT IS HEREBY ORDERED that Gulf Insurance Company's Motion for Declaratory and/or Summary Judgment on the Third-Party Complaint, Counterclaim, Affirmative Defenses to the Third-Party Complaint and Counterclaim, and on Count VI of the First Amended Complaint (Dkt. No. 68) is GRANTED. Gulf Insurance Company has fulfilled all of its obligations to its insureds, Builders Transport, Inc., and Cecil Hamlin.
IT IS FURTHER ORDERED that as to Count VI of Plaintiffs Complaint, Gulf Insurance Company is GRANTED summary judgment.
OPINION
The Court issued a previous Opinion and Order granting summary judgment to Defendant Gulf Insurance Company ("Gulf") as to Counts I through V and VII of Plaintiffs First Amended Complaint. The Court ordered further briefing as to Count VI of Plaintiffs First Amended Complaint, and as to Plaintiffs Affirmative Defenses to Gulfs Third-Party Complaint for Declaratory Judgment. The Court will now grant summary judgment to Gulf as to Plaintiffs Count VI and as to Gulfs Third-Party Complaint for Declaratory Judgment.
I. Standard of Review and Facts
The Court relies on the Standard of Review and Facts as enunciated in its previous Opinion in this matter.
II. Analysis
As before, the Court has reviewed the pleadings filed by the parties and does not believe that oral argument would provide any additional assistance in reaching a decision that the briefing has not already provided. See L. Civ. R. 7.2(d). Jurisdiction in this matter is based on the diversity of citizenship of the parties, and Michigan law applies to the dispute.
A. Count VI of Plaintiff's First Amended Complaint
Plaintiff Joy Kline asserts a negligence claim in Count VI of her First Amended Complaint. As the factual basis for this claim, Plaintiff asserts that she stands in the shoes of Cecil Hamlin ("Hamlin") under the doctrine of equitable subrogation to bring a negligence claim against Gulf for violating its fiduciary duty with respect to Hamlin in this case. Plaintiff argues that Hamlin would have such a claim because Plaintiff argues that Hamlin is now personally responsible for the remainder of the underlying Judgment which is unpaid. Moreover, Plaintiff alleges that Gulf took various negligent actions with respect to Hamlin.
Neither Plaintiff nor Gulf addressed this claim in their summary judgment briefing, even though Gulf styled its motion as one for summary judgment and not one for partial summary judgment. Therefore, the Court required further briefing on this claim and will address it now that the briefing has been completed.
Gulf asserts that it is entitled to summary judgment on Count VI because: (1) Michigan law does not recognize a claim for negligent claims handling, which is the essence of Plaintiffs Negligence claim; (2) under the terms of the Gulf policy with Builders Transport, Inc. ("Builders"), Gulf had no duty to undertake the defense of Builders or Hamlin in the underlying litigation; (3) Gulf owed no duty to Hamlin with respect to the settlement of the underlying litigation, which was exclusively handled and controlled by Reliance, the primary insurer; (4) at the time of settlement, Plaintiff knew about the Self-Insured Retention ("SIR") and the deductible under the Reliance policy and the collectibility ramifications of those; (5) Reliance was not required to seek Hamlin's consent to the settlement, but did obtain his consent anyway; (6) Plaintiff cannot pursue a claim on Hamlin's behalf without an assignment from Hamlin, which Plaintiff has not presented to the Court; and (7) Hamlin's uncollectibility precludes any assertion of damage. Plaintiff, on the other hand, asserts that she can bring a negligence claim against Gulf individually, in addition to her ability to bring a negligence claim on Hamlin's behalf through equitable subrogation. However, Count VI of Plaintiffs First Amended Complaint only asserts a negligence claim on Hamlin's behalf and does not assert an individual claim. Moreover, the Court has already considered Plaintiffs other Counts in her Complaint alleging her individual claims of negligence, on which Gulf has already been awarded summary judgment. Therefore, the Court will not now, in its consideration of Count VI, evaluate whether there is a factual dispute as to whether Plaintiff has an individual negligence claim against Gulf.
As to the negligence claim Plaintiff wishes to bring on Hamlin's behalf in Count VI, Plaintiff asserts that Gulf allowed a settlement to enter which would expose Hamlin to personal liability and that Gulf failed to inform Hamlin he needed to seek independent counsel. However, as is undisputed, Gulf had no involvement in the settlement of the underlying claim and had no duty to be involved as the excess insurer. The fact that Gulf had the option of being involved is not relevant. The Court does not see how Hamlin has a negligence claim against Gulf where Gulf apparently had no duty toward him which went unfulfilled.
In fact, it is also undisputed that at the time the settlement was entered, Gulf was erroneously informed by Reliance that Gulf s excess policy would not be triggered because Reliance representatives misinformed Gulf as to the limits of the primary Reliance policy.
In addition, Plaintiff does not assert how she is in the legal position to bring this claim where Gulf has cited law for the proposition that Plaintiff needs to have an assignment from Hamlin to bring an equitable subrogation claim on his behalf. Plaintiff does not dispute this, nor does she provide evidence of an assignment. Accordingly, the Court will grant summary judgment to Gulf on Count VI of Plaintiffs First Amended Complaint.
B. Gulf's Counterclaim for Declaratory Judgment
Gulf sued Hamlin as a third-party defendant for a declaratory judgment from this Court that Gulf has satisfied its obligation under the Builders insurance policy to Hamlin. Gulf did not address whether it was entitled to summary judgment on its Counterclaim for Declaratory Relief against Hamlin in its original briefing, although it styled its motion as one for summary judgment as opposed to partial summary judgment. However, the Court had to determine the issue of Hamlin's coverage for purposes of the motions and issues before it. Since the Court determined that Hamlin had insurance on the same terms as Builders, the Court would otherwise have entered declaratory judgment for Gulf that it has fully satisfied its obligation to cover the liability of Hamlin with the payment it has already made to Plaintiff.
Plaintiff and Hamlin asserted the same affirmative defenses to Gulfs Counterclaim. Since Gulf had not briefed whether Plaintiffs and Hamlin's affirmative defenses applied to bar summary judgment for Gulf, the Court ordered further briefing from the parties. Specifically, the parties were ordered to brief for the Court whether the evidence available on these defenses warrants summary judgment for one or more parties or whether there are open questions of material fact on which a trial will be necessary. In its briefing, Gulf asks for summary and/or declaratory judgment on its Counterclaim.
Plaintiff filed a response in opposition, but Hamlin did not file a response with the Court.
Plaintiff only addressed the affirmative defense of estoppel in her Opposition to Gulfs Motion for Summary Judgment, even though Gulf addressed all of the affirmative defenses, so the Court assumes that the other affirmative defenses are being abandoned by Plaintiff. Plaintiff asserts that Gulf is estopped from claiming that its obligations to Plaintiff have been satisfied because the MCS-90 endorsement was a part of the Gulf policy. Gulf asserts the MCS-90 endorsement was not part of the policy and that Plaintiff cannot demonstrate that estoppel ought to apply because Plaintiff never relied on the issuance of an MCS-90 endorsement.
First, the Court has already found that no reasonable jury could find that the MCS-90 endorsement was part of the applicable Gulf policy. The new evidence presented by Plaintiff regarding what was transferred between Aon and Gulf does not sway the Court from this position, particularly given the other evidence on this point Gulf has presented.
Next, under Michigan law, estoppel arises where: (1) a party, by representation, admissions or silence, intentionally or negligently induces another party to believe facts; (2) the other party justifiably relies and acts on this belief; and (3) the other party will be prejudiced if the first party is permitted to deny the existence of the facts. Lakeside Oakland Dev., L.C. v. H J Beef Co., 644 N.W.2d 765, 770-71 (Mich.App. 2002). When Builders disclosed its Gulf policy to Plaintiff, it never had an MCS-90 endorsement attached to it. Therefore, neither Plaintiff nor Hamlin can show reliance upon this endorsement being part of the policy, and estoppel does not arise, even if Plaintiff could satisfy the other elements of estoppel.
From the evidence before it, the Court does not find that any of the affirmative defenses would bar Gulf from receiving Declaratory Judgment on its Counterclaim. Therefore, the Court will grant summary judgment on the Counterclaim to Gulf.
Plaintiff asserts in the Facts section of her Brief in Opposition that Gulf must show that no payments have been made by Builders on any other claims made on the Reliance policy during the policy year which would be credited toward any deductible. (See Plaintiffs Brief in Opposition, Dkt. No. 71, at 3-4.) Plaintiff asserts that Gulf has not shown this, and thus cannot receive summary judgment on its Counterclaim. (See id.) However, whether any payments were made by Builders would be relevant to the Reliance policy deductible, not relevant to coverage obligations by Gulf.
III. Conclusion
Therefore, this Court will grant summary judgment to Gulf on all remaining claims as described in the Judgment accompanying this Opinion.