Ridenour v. Progressive Marathon Ins. Co.

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ZACHARY RIDENOUR, Plaintiff-Appellant, v. PROGRESSIVE MARATHON INSURANCE COMPANY, Defendant-Appellee.

Nos. 356734, 356815

Court of Appeals of Michigan

March 2, 2023

UNPUBLISHED

Ingham Circuit Court LC No. 19-000405-NF

Before: M. J. KELLY, P.J., and SHAPIRO and PATEL, JJ.

PER CURIAM

These consolidated appeals arise from defendant, Progressive Marathon Insurance Company's, denial of personal protection insurance (PIP) benefits to plaintiff, Zachary Ridenour. In Docket No. 356734, Ridenour, appeals as of right the trial court order granting summary disposition in favor of Progressive under MCR 2.116(C)(10) and denying Ridenour's cross-motion for summary disposition under MCR 2.116(I)(2). In Docket No. 356815, Ridenour appeals as of right trial court order denying his motion to amend his complaint. For the reasons explained below, we affirm.

I. BASIC FACTS

On November 6, 2018, Ridenour was severely injured in a single-vehicle motor-vehicle crash. At the time of the accident, the vehicle Ridenour was driving-which was owned by and registered to him-was insured under a no-fault automobile insurance policy issued by Progressive to Ridenour's friend, Floyd Layport. Ridenour was listed as an additional driver on the policy, but the only named insured was Layport and Layport's address was the only address listed. The parties dispute whether there was fraud in the procurement of the policy. Progressive presented evidence suggesting that Ridenour had moved to a new address months before the policy was issued and that the only reason Ridenour was on Layport's policy was because he could not afford the premiums on a policy issued in his own name. In contrast Ridenour submitted evidence indicating that he was alternating residences between Layport's home in Edmore Michigan and a home in Elm Hall, Michigan, that he intended to reside in after the property was cleaned up and certain repairs were completed. Following an investigation, Progressive denied Ridenour's claim for PIP benefits. The stated basis for the denial was the policy's fraud-exclusion provision.

On May 30, 2019, Ridenour filed a complaint, seeking first-party PIP benefits from Progressive under the no-fault act, MCL 500.3101 et seq.^[1] Relevant to the issues raised on appeal, Progressive asserted in its answer and affirmative defenses that it was not in the highest order of priority for the payment of PIP benefits to Ridenour and that Ridenour's claims were, in whole or in part, fraudulent. Following discovery, Progressive moved for summary disposition. Progressive argued that the undisputed facts established that it was not in the order of priority for Ridenour's PIP benefits because (1) for purposes of MCL 500.3114(1), Ridenour was not the named insured, the named insured's spouse, or a relative of either domiciled in the same household, and (2) for purposes of MCL 500.3114(4) Progressive was not the insurer of the owner or registrant of the vehicle involved, nor was it the insurer of the operator of the vehicle involved.

In response, Ridenour argued that Progressive was precluded by the "mend the hold" doctrine from raising a priority defense because it had induced him into litigation on other grounds. He asserted that Progressive's failure to inform him of the priority defense prejudiced him because the Michigan Automobile Insurance Placement Facility had not been added as a party. Ridenour also argued that, even if Progressive was allowed to assert a priority defense, Progressive would be first in priority under MCL 500.3114(4) because Progressive was the insurer of the registrant of the vehicle involved in the accident and the insurer of that vehicle's operator. In the same pleading, Ridenour sought a cross-motion for summary disposition, asserting that at the time of the accident he was "in his own vehicle insured by Defendant Progressive." He added that Progressive's fraud defense was based on inadmissible hearsay and speculation whereas the facts showed that no fraud had been committed by Ridenour when his vehicle was added to Layport's policy. Ridenour argued that, as a result, Progressive could not meet its burden of showing to a reasonable degree of certainty that fraud was committed by Ridenour when Ridenour's vehicle was added to an existing policy of insurance. Ridenour also moved to amend his complaint to add claims of promissory estoppel and errors and omissions related to Progressive's issuance of the insurance policy and providing proof of insurance for him and his vehicle.

The trial court heard oral argument on the motions for summary disposition. Following the hearing, the court granted summary disposition in favor of Progressive. The court rejected Ridenour's argument that the mend-the-hold doctrine precluded Progressive from relying on a priority defense. Instead, the court held that Progressive was not first in priority for Ridenour's PIP claim under MCL 500.3114(1) because Ridenour was not a named insured on Layport's nofault insurance policy and because-regardless of his residency at the time of the accident- Ridenour was not related to either Layport or Layport's wife. The court also concluded that Progressive was not first in priority under MCL 500.3114(4) because, under the policy language, Progressive was not the insurer of the registrant or owner of the vehicle involved in the crash. Consequently, the court held that Ridenour's arguments related to the fraud defense were moot. Later, the court held a hearing on Ridenour's motion to amend the complaint. The court denied the motion after concluding that any such amendment would be futile.

II. SUMMARY DISPOSITION

A. STANDARD OF REVIEW

Ridenour argues that the trial court erred by granting Progressive's motion for summary disposition. We review de novo a trial court's decision on a motion for summary disposition. Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285 Mich.App. 362, 369; 775 N.W.2d 618 (2009). Likewise, we review de novo questions of law, such as the interpretation and application of statutes, Estes v Titus, 481 Mich. 573, 578-579; 751 N.W.2d 493 (2008), and the interpretation of insurance policies, Webb v Progressive Marathon Ins Co, 335 Mich.App. 503, 507; 967 N.W.2d 841 (2021).

B. ANALYSIS

1. PRIORITY DEFENSE

To determine which insurer is designated to provide PIP benefits to a person injured in a motor-vehicle accident, "MCL 500.3114 instructs a person to pursue his or her 'claim' for PIP benefits from insurers according to the listed order of priority." Griffin v Trumbull Ins Co, __ Mich. __, __; __ N.W.2d __ (2022) (Docket No. 162419); slip op at 9. Under MCL 500.3114(1), an injured person must generally seek PIP benefits from his or her own insurer. Titan Ins Co v American Country Ins Co, 312 Mich.App. 291, 298; 876 N.W.2d 853 (2015). MCL 500.3114(1) provides, in relevant part:

Except as provided in subsections (2), (3), and (5), a [PIP] policy described in [MCL 500.3101(1)] applies to accidental bodily injury to the person named in the policy, the person's spouse, and a relative of either domiciled in the same household, if the injury arises from a motor vehicle accident. [Emphasis added.]

Ridenour does not dispute that he is not a named insured on the policy and that he is not a relative of the named insured or the named insured's spouse. As such, Progressive is not first in priority under MCL 500.3114(1).

"MCL 500.3114(4) applies when the injured person is not covered by his or her own insurance or the insurance of a relative domiciled in the same household under MCL 500.3114(1) and permits the injured person to seek benefits from the no-fault insurers of others, including the vehicle's owner, registrant, or operator." Stone v Auto-Owners Ins Co, 307 Mich.App. 169, 176; 858 N.W.2d 765 (2014). MCL 500.3114(4) provides:

(4) Except as provided in subsections (1) to (3), a person suffering accidental bodily injury arising from a motor vehicle accident while an occupant of a motor vehicle shall claim [PIP] benefits from insurers in the following order of priority:

(a) The insurer of the owner or registrant of the vehicle occupied.

(b) The insurer of the operator of the vehicle occupied.

Ridenour argues that under MCL 500.3114(4), Progressive is in the order of priority to provide PIP benefits to him. Ridenour notes that he was both the owner and operator of the motor vehicle involved in the crash. He argues that, under the plain language of Layport's no-fault policy, he was an eligible injured person, which means that Progressive was his insurer for purposes of the priority statute. We disagree.

"[E]ven if the owner, registrant, or operator of a vehicle is not a named insured under a policy, the named insured's insurer may also constitute an 'insurer' of the owner, registrant, or operator under MCL 500.3114(4) if the policy expands the definition of 'insured person' beyond the named insured so that it includes those persons." Stone, 307 Mich.App. at 176-177. Further, an "insurer" has been defined by this Court as "one who agrees, by contract, to assume the risk of another's loss and to compensate for that loss." Id. at 177 (quotation marks omitted). For purposes of MCL 500.3114(4), whether an insurance company is the "insurer" of the owner, registrant, or operator of the vehicle occupied "depends on the language of the relevant insurance policy." Dobbelaere v Auto-Owners Ins Co, 275 Mich.App. 527, 532-534; 740 N.W.2d 503 (2007).

When interpreting an insurance contract, this Court construes contractual terms in context, according to their commonly used meanings. Henderson v State Farm Fire &Cas Co, 460 Mich. 348, 354; 596 N.W.2d 190 (1999). A court will not hold an insurance company liable for a risk it did not assume. Id. "The...