Abdelmaguid v. Dimensions Ins. Grp.

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DALAL ABDELMAGUID, Personal Representative of the ESTATE OF MAGED ABDELMAGUID, Plaintiff-Appellee, v. DIMENSIONS INSURANCE GROUP, LLC, doing business as TRM OF OHIO, Defendant-Appellant.

No. 361674

Court of Appeals of Michigan

February 8, 2024

Wayne Circuit Court LC No. 21-017604-NI

Before: Cameron, P.J., and Borrello and O'Brien JJ.

Borrello, J.

In this tort action, defendant, Dimensions Insurance Group, LLC doing business as TRM of Ohio, appeals by leave granted^[1] the May 16, 2022 order denying defendant's motion for summary disposition under MCR. 2.116(C)(8) (failure to state a claim on which relief could be granted). On appeal, defendant argues the trial court should have granted defendant's motion because plaintiff Dalal Abdelmaguid, (Dalal) acting as personal representative of the Estate of Maged Abdelmaguid, (Maged) failed to allege any damages, which resulted in the tort claims being impermissible as a matter of law and unripe. Defendant alternatively argues the trial court should have granted summary disposition of plaintiff's breach-of-fiduciary-duty and misrepresentation claims because they were abandoned, and this Court should instruct the trial court not to allow plaintiff to amend the complaint because such would be futile. For the reasons set forth in this opinion, we affirm.

I. BACKGROUND

Pure Transportation, LLC, owned at least one semitruck, which was driven by employees delivering goods. Beginning in 2014, Pure Transportation began working with defendant, an independent insurance agent, to obtain "business automobile, trucking and other insurance" coverage. Defendant informed Pure Transportation the maximum amount of liability coverage it could obtain in a primary insurance policy was $1 million. Pure Transportation purchased such coverage through defendant at all times relevant here. When the subject automobile accident occurred, the primary coverage was provided by the Insurance Company of the State of Pennsylvania (ICSOP).

In January 2017, Pure Transportation contacted defendant about obtaining supplemental insurance coverage, which was referred to as "an Excess Liability Insurance Policy." The excess policy was purchased by defendant on behalf of Pure Transportation through Hallmark Insurance Company. The Hallmark Insurance policy had a limit "of $2,000,000 which provided excess limits beyond the $1,000,000 Primary Policy insured by ICSOP, bringing the total limits to $3,000,000." Defendant did not inform Pure Transportation of any limitations or exceptions to the excess policy. Further, Pure Transportation "at no time requested that the coverage be limited to any client or project and instead, expected that there be full coverage up to the limits of the excess Policy for all motor vehicles, regardless of the client or use of any vehicle." Defendant never sent the actual policy with Hallmark Insurance to Pure Transportation. Unbeknownst to Pure Transportation, the excess policy had a "Designated Shipper Limitation Endorsement," which barred coverage unless Pure Transportation provided a bill of lading to the designated shipper.

On March 8, 2018, Maged was a passenger in a semitruck owned by Pure Transportation and driven by Mawlwood Zankanawi. While driving through Ohio, Zankanawi lost control of the semitruck and crashed into the concrete wall dividing the highway. Maged was crushed inside of the cab of the semitruck and later died. Dalal, Maged's widow, was appointed as the personal representative of Maged's estate on February 20, 2019.

Plaintiff sued Pure Transportation and Zankanawi in Wayne Circuit Court. Pure Transportation notified defendant of the accident and claim, and defendant notified ICSOP and Hallmark Insurance of the same. There were no issues with ICSOP, but Hallmark Insurance denied coverage under the excess policy on the basis of the designated shipper endorsement. In December 2021, plaintiff and Pure Transportation agreed to settle the lawsuit. Before the consent judgment was entered, plaintiff and Pure Transportation entered into a "Release Agreement and Assignment of Rights and Interest of Legal Claims." The agreement indicated that, in exchange for a release of plaintiff's claims against Pure Transportation, it would "unconditionally assign, transfer and convey all rights [Pure Transportation] has or may have under the [excess] Policy and any breach of contract or other legal claims against Hallmark and any insurance agent(s) or broker(s), including but not limited to [defendant] . . . ."

Thus, plaintiff agreed to enter into a consent judgment with Pure Transportation finding Pure Transportation liable to pay $5 million in damages. Pure Transportation agreed to pay plaintiff $927,377.93 on the judgment, which was the remaining coverage available under the primary policy with ICSOP after covering Pure Transportation's defense. That payment, in addition to the assignment of rights, "shall cause the Consent Judgment . . . to be satisfied as to" Pure Transportation. The document contained the following clauses regarding the assignment of rights:

1. Assignment of Rights.

Subject to, the terms and conditions of this Assignment, [Pure Transportation] agrees to, and hereby does assign, transfer and convey to [plaintiff], and [plaintiff] agrees to accept, and hereby does accept from [Pure Transportation], all of [Pure Transportation]'s rights to any and all existing, potential, known or unknown causes of action(s) in tort, contract, for declaratory relief, misrepresentation, fiduciary liability, fraud or otherwise to pursue any claim [Pure Transportation] has or may have against Hallmark [Insurance] and/or [defendant] arising out of or related in any way to the [excess] Policy or the existence or nonexistence of or the inadequacy of coverage.

In consideration thereof, and subject to the conditions of this Assignment, [plaintiff] agrees to and hereby does release [Pure Transportation] of and from any liability for damages, including the above referenced Consent Judgment, arising out of the Accident which are uninsured under the Policy in excess of the $927,377.93 payment referenced in this agreement.

[Plaintiff] specifically agrees not to take any action to collect on any unsatisfied balance of the Consent Judgment in excess of the $927,377.93 paid under the remaining available insurance coverage, so long as [Pure Transportation] cooperates in [plaintiff]'s pursuit of the assigned claims.

The consent judgment of $5 million in favor of plaintiff was entered on December 17, 2021, and referenced the release agreement and assignment of rights. Specifically, the consent judgment noted ICSOP "has extended coverage for its policy limits of $1,000,000 which it has tendered to Plaintiff, less an eroded amount of $72,622.07, i.e., $927,377.93, and will be distributed to the estate." Further, the consent judgment acknowledged there were potential legal claims against defendant, which had been assigned from Pure Transportation to plaintiff. On the basis of the agreement between plaintiff and Pure Transportation, the trial court entered judgment in favor of plaintiff for $5 million and closed the case.

Plaintiff sued defendant in the instant case on December 28, 2021. Plaintiff alleged one count each of negligence, breach of fiduciary duty, and misrepresentation. For all of these claims, plaintiff relied on the assignment of rights from Pure Transportation. As to the negligence count, plaintiff asserted defendant "had a professional special relationship with" Pure Transportation, which imposed certain duties on defendant. Specifically, defendant had a duty "to act as a reasonably prudent independent insurance agency in like or similar circumstances in procuring and effectuating coverage through insurance companies . . . ." Defendant breached the duty by failing to obtain the coverage Pure Transportation requested, explaining the coverage to Pure Transportation, and delivering the excess policy to Pure Transportation. These breaches were the proximate cause of damage to Pure Transportation in the form of Pure Transportation "being underinsured for its liability for the Accident, up to amounts exceeding the amounts paid under the Primary Policy."

The breach-of-fiduciary-duty claim was quite similar, though plaintiff alleged defendant's fiduciary duty to Pure Transportation was to provide the most comprehensive coverage and to adequately represent Pure Transportation's interests when obtaining insurance coverage. Under applicable law, plaintiff asserted defendant was the legal agent of Pure Transportation. Plaintiff argued defendant breached the fiduciary duties it owed Pure Transportation, which caused Pure Transportation to suffer damages. The third and final count of the complaint asserted defendant made innocent or intentional misrepresentations to Pure Transportation about the scope of the coverage available under the excess policy with Hallmark Insurance. Pure Transportation detrimentally relied on those misrepresentations, which they argued, was reasonable under the circumstances.

In lieu of answering the complaint, defendant moved for summary disposition under MCR 2.116(C)(8). Defendant argued plaintiff's claims were premature and legally deficient. First, defendant claimed plaintiff's tort claims were required to fail because Pure Transportation had not suffered any damages. Defendant noted damages were an essential element of every tort claim, and plaintiff's assertions of Pure Transportation's rights against defendant required Pure Transportation to have suffered some form of damages. They further noted that plaintiff settled its lawsuit against Pure Transportation, which included an agreement not to pursue any claims against Pure Transportation above the policy...