                           STATE OF MICHIGAN

                            COURT OF APPEALS



JUDITH SARKOZY, doing business as                                    UNPUBLISHED
SARKOZY BAKERY,                                                      August 30, 2016

               Plaintiff-Appellant,

v                                                                    No. 326454
                                                                     Kalamazoo Circuit Court
HANOVER INSURANCE COMPANY,                                           LC No. 2013-000156-NZ
CITIZENS INSURANCE COMPANY OF
AMERICA, and HUB INTERNATIONAL
MIDWEST LIMITED,

               Defendants-Appellees.


Before: OWENS, P.J., and SAWYER and SHAPIRO, JJ.

PER CURIAM.

        Plaintiff appeals as of right the trial court order granting summary disposition in favor of
defendants Hanover Insurance Company (“Hanover”), Citizens Insurance Company of America
(“Citizens”), and HUB International Midwest Limited (“HUB”), on her claims arising out of a
fire that consumed Sarkozy Bakery (“the bakery”). We affirm.

        The bakery and its contents were destroyed by fire in 2012. Plaintiff received insurance
proceeds from Hanover for the full policy limits on the building and its contents. Those
proceeds were insufficient to fully replace the building and its contents. In this lawsuit, plaintiff
argues that the bakery and its contents were underinsured due to the tortious acts of her
independent insurance agent (HUB and its predecessors) and her insurers (Hanover/Citizens).
Plaintiff seeks relief under several theories: (1) negligence; (2) silent fraud; (3) breach of
fiduciary duty; (4) tortious interference with business relationship or expectancy; and (5) breach
of duty to defend or indemnify.

        This Court reviews de novo a trial court’s grant of summary disposition under MCR
2.116(C)(10). Ernsting v Ave Maria College, 274 Mich App 506, 509; 736 NW2d 574 (2007).
“When deciding a motion for summary disposition under MCR 2.116(C)(10), a court must
consider the pleadings, affidavits, depositions, admissions, and other documentary evidence
submitted in the light most favorable to the nonmoving party.” Id. at 509-510. “Summary
disposition is proper under MCR 2.116(C)(10) if the documentary evidence shows that there is
no genuine issue regarding any material fact and the moving party is entitled to judgment as a
matter of law.” Id. at 509. “A genuine issue of material fact exists when the record, giving the
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benefit of any reasonable doubt to the opposing party, leaves open an issue upon which
reasonable minds could differ.” Id. at 510. “Questions involving the proper interpretation of a
contract or the legal effect of a contractual clause are also reviewed de novo.” McDonald v
Farm Bureau Ins Co, 480 Mich 191, 197; 747 NW2d 811 (2008).

        To prevail in a negligence action, “a plaintiff must prove four elements: (1) a duty owed
by the defendant to the plaintiff, (2) a breach of that duty, (3) causation, and (4) damages.” Case
v Consumers Power Co, 463 Mich 1, 6; 615 NW2d 17 (2000). “If a trial court determines that,
as a matter of law, the defendant owed no duty to the plaintiff, summary disposition is properly
granted in the defendant’s favor . . . .” Dykema v Gus Macker Enterprises, Inc, 196 Mich App 6,
9; 492 NW2d 472 (1992). “Whether a duty exists is a question of law that is solely for the court
to decide.” Harts v Farmers Ins Exch, 461 Mich 1, 5; 597 NW2d 47 (1999). Questions of law
are reviewed de novo. Fultz v Union-Commerce Assoc, 470 Mich 460, 463; 683 NW2d 587
(2004).

         Plaintiff argues that defendants expressly agreed to assume the duty of advising plaintiff
of the adequacy of her policy limits and, therefore, defendants owed her a duty under the special
relationship test in Harts, 461 Mich at 5. Plaintiff misreads the law. Harts applies to exclusive
insurance agents, not independent agents (such as HUB) or insurers (such as Hanover/Citizens).
Id. at 7-10.

        “[T]he relationship between the insurer and the insured is a contractual one.” Id. at 7.
Plaintiff has failed to identify any language in her insurance policy to suggest that
Hanover/Citizens had a duty to advise her of the adequacy of her policy limits. Indeed, the
policy actually disclaims such a duty, providing that “[w]e [the insurer] are not obligated to make
any inspections, surveys, reports or recommendations and any such actions we do undertake
relate only to insurability and the premiums to be charged.” Plaintiff’s insurance policy clearly
stated the policy limits for each type of coverage she purchased, and provided that “[t]he most
we will pay for loss or damage in any one occurrence is the applicable Limit of Insurance
shown[.]” Plaintiff was obligated to read the policy and raise any questions she had about the
adequacy of her policy limits within a reasonable time. Zaremba Equip, Inc v Harco Nat’l Ins
Co, 280 Mich App 16, 29; 761 NW2d 151 (2008). Plaintiff testified that she always read her
insurance policies, but there is no evidence that she ever contacted Hanover/Citizens with
questions regarding the adequacy of the policy limits contained therein. Because an insurer’s
duties to an insured arise from the policy, plaintiff cannot establish that Hanover/Citizens owed
her a duty in negligence with respect to this claim and, accordingly, the trial court properly
granted summary disposition in their favor. Dykema, 196 Mich App at 9.

        Turning to plaintiff’s claim against HUB, it is undisputed that Terry Stewart (plaintiff’s
original insurance agent), and his successors, i.e., HUB, were and are independent insurance
agents. An “independent insurance agent or broker is considered an agent of the insured rather
than an agent of the insurer.” Genesee Foods Servs, Inc v Meadowbrook, Inc, 279 Mich App
649, 654; 760 NW2d 259 (2008) (quotation marks and citation omitted). An independent
insurance agent owes a duty of loyalty and good faith. See Burton v Burton, 332 Mich 326, 337;
51 NW2d 297 (1952).



                                                -2-
       [B]ecause defendants were independent insurance agents when they assisted
       plaintiffs, their primary fiduciary duty of loyalty rested with plaintiffs, who could
       depend on this duty of loyalty to ensure that defendants were acting in their best
       interests, both in terms of finding an insurer that could provide them with the
       most comprehensive coverage and in ensuring that the insurance contract
       properly addressed their needs. [Genesee Foods Servs, Inc, 279 Mich App at 656
       (emphasis added).]

        Thus, contrary to the trial court’s ruling, HUB, as plaintiff’s independent insurance agent,
owed her a duty in negligence—that of loyalty and good faith. However, this error does not
require reversal because plaintiff has presented no evidence that HUB breached its duty with
regard to advising her of the adequacy of her policy limits. Taylor v Laban, 241 Mich App 449,
458; 616 NW2d 229 (2000) (“[W]e will not reverse the trial court’s order when the right result
was reached for the wrong reason.”).

        This Court has held that “[g]enerally, an insurance agent does not have an affirmative
duty to advise a client regarding the adequacy of a policy’s coverage. Instead, the insured is
obligated to read the policy and raise questions concerning coverage within a reasonable time
after issuance.” Mate v Wolverine Ins Co, 233 Mich App 14, 22-23; 592 NW2d 379 (1998)
(citation and internal quotation marks omitted). Plaintiff testified that she read her policy every
year, but there is no evidence that she ever raised concerns about the adequacy of her policy
limits. There is no testimony that plaintiff ever requested that Stewart or HUB obtain RCV
coverage or ensure that the limits of her policy were sufficient to replace the bakery and its
contents.1 Plaintiff repeatedly assented to the renewal of the policy with limits based on an ACV
calculation. Accordingly, although HUB owed plaintiff a duty of loyalty and good faith, plaintiff
has presented no evidence that would allow reasonable minds to differ as to whether HUB (or its
predecessors) breached that duty. Ernsting, 274 Mich App at 510. Accordingly, the trial court
properly granted summary disposition in favor of HUB on plaintiff’s negligence claim related to
the adequacy of her policy limits. Taylor, 241 Mich App at 458.

       Plaintiff also argues that Hanover/Citizens breached the standard duty of care in ordinary
negligence by mislabeling plaintiff’s policy on the declarations page as “replacement cost.”
Even if this act breached a duty owed, plaintiff’s claim fails because there is no evidence that it
caused her claimed damages. Case, 463 Mich at 6. Plaintiff’s insurance policy plainly provided
that any loss would be paid consistent with the policy limits, not any classification listed on the


1
  The trial court properly refused to consider plaintiff’s late-filed affidavits. At her deposition,
plaintiff testified unequivocally and repeatedly that she could not recall any conversation with
Stewart, or any employee of HUB or Hanover/Citizens, concerning the adequacy of her policy
limits or whether those policy limits were sufficient to fully replace the bakery and its contents.
Plaintiff later filed affidavits wherein she averred that she remembered that Stewart made various
specific representations to her and that she specifically requested RCV coverage. However, “a
witness is bound by his or her deposition testimony, and that testimony cannot be contradicted by
affidavit in an attempt to defeat a motion for summary disposition.” Casey v Auto Owners Ins
Co, 273 Mich App 388, 396; 729 NW2d 277 (2006).

                                                -3-
declarations page. Moreover, it is undisputed that plaintiff paid premiums based on those policy
limits. “[P]erhaps the most fundamental rule of Michigan insurance jurisprudence is that an
insurer can never be held liable for a risk . . . for which it did not charge or receive any
premium.” Dunn v Detroit Auto Inter-Ins Exch, 254 Mich App 256, 270; 657 NW2d 153 (2002)
(quotation marks and citation omitted). Thus, the trial court did not err in granting summary
disposition in favor of Hanover/Citizens on plaintiff’s claim of ordinary negligence.

        Plaintiff next argues that the trial court erred in granting summary disposition in favor of
Hanover/Citizens on her claim of silent fraud. In 1997, a Hanover/Citizens employee performed
an internal “Marshall Swift” valuation of the bakery building. The calculated “actual cash
value” (“ACV”) calculated was significantly higher than the policy limit on the building in effect
at the time. Plaintiff argues that Hanover/Citizens committed silent fraud by failing to disclose
to her this valuation.

        “[I]n order to prove a claim of silent fraud, a plaintiff must show that some type of
representation that was false or misleading was made and that there was a legal or equitable duty
of disclosure.” M&D, Inc v WB McConkey, 231 Mich App 22, 32; 585 NW2d 33 (1998). “We
emphasize that there must be some type of misrepresentation, whether by words or action, in
order to establish a claim of silent fraud.” Id. at 36. That is, “mere nondisclosure is insufficient.
There must be circumstances that establish a legal duty to make a disclosure.” Hord v
Environmental Research Institute of Mich, 463 Mich 399, 412; 617 NW2d 543 (2000).

        Hanover/Citizens was under no duty to advise plaintiff regarding the adequacy of her
coverage or policy limits. An insurer’s duty to an insured is governed by the insurance policy.
Harts, 461 Mich at 7. Plaintiff has pointed to no provision in her insurance policy to suggest that
Hanover/Citizens had a duty to disclose its internal valuations of her property. Moreover, as the
Supreme Court stated, “a legal duty will arise most commonly in a [silent fraud] situation where
inquiries are made by the plaintiff, to which the defendant makes incomplete replies that are
truthful in themselves but omit material information.” Hord, 463 Mich at 412. There is no
evidence that plaintiff ever contacted Hanover/Citizens regarding the adequacy of her coverage
or whether her policy limits were sufficient to replace the bakery and its contents. There being
no inquiry, Hanover/Citizens cannot be charged with omitting material information in a reply.
See Burger v Allstate Ins Co, 667 F Supp 2d 738, 743 (ED Mich, 2009) (insurer has no duty to
disclose where the insured does not question the benefits being offered).2 Moreover, plaintiff has
failed to establish that Hanover/Citizens made a misrepresentation. There is no language in the
insurance policy suggesting that plaintiff’s policy limit was consistent with a Marshall Swift
ACV or RCV valuation. Thus, Hanover/Citizens was not required to “correct” the alleged
misrepresentation made by the policy limit.

       Plaintiff argues that the trial court erred in granting summary disposition in favor of HUB
on the claim for breach of fiduciary duty. According to plaintiff, HUB breached its fiduciary
duty when, in 2007, it and Hanover/Citizens executed the “Service Center Contract,” which


2
 Lower federal court decisions are not binding on this Court, but may be persuasive. Donkers v
Kovach, 277 Mich App 366, 372 n 3; 745 NW2d 154 (2007).

                                                -4-
allowed HUB clients who were insured by Hanover/Citizens to directly contact a customer
service center maintained by Hanover/Citizens with policy questions and changes. “Whether to
recognize a cause of action for breach of fiduciary duty is a question of law reviewed de novo,
because the existence of a duty is generally a question of law.” Calhoun Co v Blue Cross Blue
Shield of Mich, 297 Mich App 1, 20; 824 NW2d 202 (2012) (citation omitted).

        HUB owed plaintiff a fiduciary duty of loyalty and good faith. Burton, 332 Mich at 337;
Genesee Foods Servs, Inc, 279 Mich App at 656. Plaintiff argues that HUB breached the
following fiduciary duties by entering into the Service Center Contract: (1) duty to disclose all
material facts; (2) duty of fidelity and loyalty; and (3) duty of good faith and fair dealing. See
Stephenson v Golden, 279 Mich 710, 735-738; 276 NW 849 (1937). Plaintiff presented no
evidence to suggest that breaches of any of these duties occurred. As to the first, there was
evidence that HUB informed plaintiff of the availability of the Center and its function; plaintiff
does not dispute this evidence. As to the second, plaintiff repeatedly asserts that, by entering
into the Service Center Contract, HUB somehow abdicated its function as an independent
insurance agent and made plaintiff a permanent customer of Hanover/Citizens. There is simply
no evidence to that effect. HUB remained at all times plaintiff’s independent insurance agent.
Plaintiff was free to contact HUB at any time and, indeed, did so following the execution of the
Service Center Contract. Plaintiff’s HUB agent testified that, if plaintiff wished for HUB to shop
her insurance to carriers other than Hanover/Citizens, it would have done so. There is also no
evidence to support plaintiff’s claimed violation of the duty of good faith and fair dealing. The
record indicates that plaintiff was apprised of everything related to the Service Center Contract
and that HUB was also available to answer any questions, which it did indeed do when plaintiff
called. In one instance, plaintiff’s HUB agent contacted the Center on plaintiff’s behalf and
obtained a premium reduction. Accordingly, the trial court did not err in granting HUB’s motion
for summary disposition on plaintiff’s claim of breach of fiduciary duty. Calhoun Co, 291 Mich
App at 20.

        Plaintiff also claims that the trial court erred in granting summary disposition in favor of
Hanover/Citizens on her claim for tortious interference with a business relationship. According
to plaintiff, Hanover/Citizens interfered with her relationship with HUB when it executed the
Service Center Contract.

               The elements of tortious interference with a business relationship are the
       existence of a valid business relationship or expectancy, knowledge of the
       relationship or expectancy on the part of the defendant, an intentional interference
       by the defendant inducing or causing a breach or termination of the relationship or
       expectancy, and resultant damages to the plaintiff. To establish that a lawful act
       was done with malice and without justification, the plaintiff must demonstrate,
       with specificity, affirmative acts by the defendant that corroborate the improper
       motive of the interference. Where the defendant’s actions were motivated by
       legitimate business reasons, its actions would not constitute improper motive or
       interference. [Badiee v Brighton Area Sch, 265 Mich App 343, 365-366; 695
       NW2d 521 (2005) (citations and emphasis omitted).]

       There is no evidence that the Service Center Contract breached or terminated plaintiff’s
business relationship with HUB. Plaintiff was free to contact HUB at any time after the

                                                -5-
execution of the Service Center Contract to inquire about the adequacy of her coverage, her
policy limits, or any other matter regarding her policy. Indeed, it is undisputed that plaintiff did
contact HUB regarding her policy. The evidence indicates that plaintiff was told that she could
contact HUB or the Center, and there is no indication that plaintiff was prevented from
contacting HUB and seeking assistance. There was testimony that, had plaintiff requested, HUB
would have shopped her policy to other insurance carriers. Plaintiff has presented no authority to
suggest that an independent agent is required to unilaterally shop an insured’s policy when the
insured expresses satisfaction at renewing the policy. There is no language in the Service Center
Contract requiring HUB to keep plaintiff’s policy with Hanover/Citizens or otherwise favor
Hanover/Citizens over other insurance companies.             In sum, it does not appear that
Hanover/Citizens’ allegedly wrongful actions significantly affected plaintiff’s relationship with
HUB, much less breached or terminated it. Essentially, the Center simply provided plaintiff with
another customer service outlet. Accordingly, because plaintiff presented no evidence that the
Service Center Contract breached or terminated her business relationship with HUB, the trial
court did not err in granting summary disposition in favor of Hanover/Citizens on plaintiff’s
claim for tortious interference with business relationship. Badiee, 265 Mich App at 365-366.

        Lastly, plaintiff argues that Hanover breached its duties to defend and indemnify her.
Following the fire, plaintiff retained an attorney after she received letters from bakery neighbors
reserving the right to pursue litigation if the demolition of the bakery was not properly handled.
Plaintiff now seeks reimbursement of the money spent on the demolition and the attorney.

        To prevail on an action for breach of contract, plaintiff must show “that (1) there was a
contract (2) which the other party breached (3) thereby resulting in damages to the party
claiming breach.” Miller-Davis Co v Ahrens Constr, Inc, 495 Mich 161, 178; 848 NW2d 95
(2014). “An insurance policy is much the same as any other contract. The cardinal rule in the
interpretation of contracts is to ascertain the intention of the parties. To this rule all others are
subordinate. . . . [I]if the language of the contract is clear and unambiguous, it is to be construed
according to its plain sense and meaning . . . .” Grosse Pointe Park v Mich Muni Liability &
Prop Pool, 473 Mich 188, 197-198; 702 NW2d 106 (2005).

       The policy language at issue provides:

               a. We will pay those sums that the insured becomes legally obligated to
       pay as damages because of “bodily injury” or “property damage” to which this
       insurance applies. We will have the right and duty to defend the insured against
       any “suit” seeking those damages. However, we will have no duty to defend the
       insured against any “suit” seeking damages for “bodily injury” or “property
       damage” to which this insurance does not apply. We may, at our discretion,
       investigate any “occurrence” and settle any claim or “suit” that may result.
       [Emphasis added.]

The policy provides that the words in quotation marks have a “special meaning” defined in the
policy. Of relevance here is the definition of “suit”:

               18. “Suit” means a civil proceeding in which damages because of “bodily
       injury”, “property damage” or “personal and advertising injury” to which this
       insurance applies are alleged. “Suit” includes:
                                               -6-
              a. An arbitration proceeding in which such damages are claimed and to
       which the insured must submit or does submit with our consent; or

             b. Any other alternative dispute resolution proceeding in which such
       damages are claimed and to which the insured submits with our consent.

        Under none of the policy definitions was a “suit” brought against plaintiff. There is no
proof, or even allegation, that a civil lawsuit was filed or that arbitration or other alternative
dispute resolution proceeding was commenced. Plaintiff merely received letters that, at best,
threatened possible future litigation. Under the plain and unambiguous language of the policy,
those letters were insufficient to trigger Hanover’s duty to defend plaintiff. To the extent
plaintiff argues that Hanover failed to properly respond to her attorney’s inquiry or investigate
the matter, the policy unambiguously provides that Hanover may investigate at its discretion.
There is no language qualifying this discretion. Simply put, under the policy language, plaintiff
was required to wait for the filing of a “suit” before being entitled to defense from Hanover.
Thus, the trial court did not err in granting summary disposition in favor of Hanover on
plaintiff’s claim that it breached its duty to defend.

        As to plaintiff’s claim for indemnification, the policy plainly provides that Hanover will
pay “those sums that the insured becomes legally obligated to pay as damages . . . .” (Emphasis
added.) There is no allegation or indication that plaintiff became “legally obligated” to pay any
of the “damages” for which she now seeks indemnification. Had the bakery’s neighbors or
another party filed a lawsuit or pursued other legal remedies, plaintiff might have become legally
obligated to pay damages. However, there is no evidence that plaintiff incurred any such legal
obligation. Moreover, it is undisputed that plaintiff made the payments for which she now seeks
indemnification at her own volition. The policy unambiguously provides that plaintiff shall
make no such payments without Hanover’s consent, except at her own cost. Accordingly, the
trial court did not err in granting summary disposition in favor of Hanover on plaintiff’s breach
of contract claim related to indemnification. 3

       Affirmed.



                                                               /s/ Donald S. Owens
                                                               /s/ David H. Sawyer
                                                               /s/ Douglas B. Shapiro




3
  We reject plaintiff’s argument that the trial court violated her constitutional right to a jury trial
by granting summary disposition in favor of defendants. It is well-established that the court rules
for granting summary disposition do not violate the constitutional right to a jury trial. See, e.g.,
People’s Wayne Co Bank v Wolverine Box Co, 250 Mich 273, 284-285; 230 NW 170 (1930);
Moll v Abbott Laboratories, 444 Mich 1, 26-27; 506 NW2d 816 (1993).

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