                            STATE OF MICHIGAN

                            COURT OF APPEALS



CHEMICAL TECHNOLOGY, INC.,                                         UNPUBLISHED
                                                                   July 26, 2016
               Plaintiff-Appellant,

v                                                                  No. 326394
                                                                   Wayne Circuit Court
BERKSHIRE AGENCY, INC., doing business as                          LC No. 14-007723-CB
CAPITAL INSURANCE GROUP,

               Defendant-Appellee,
and

AMERICAN EMPIRE SURPLUS LINES,

               Defendant.


Before: METER, P.J., and SHAPIRO and O’BRIEN, JJ.

PER CURIAM.

       Plaintiff, Chemical Technology, Inc., appeals as of right the circuit court’s February 20,
2015 opinion and order granting summary disposition to defendant Berkshire Agency, Inc. (d/b/a
Capital Insurance Group) pursuant to MCR 2.116(C)(10). A stipulated order dismissing
Chemical’s claims against defendant American Empire Surplus Lines was entered on November
10, 2014, and American Empire, the insurer, is not involved in this appeal.

        This negligence lawsuit arises out of fire damage that was sustained to a building owned
by Chemical in Detroit, Michigan. According to Chemical, the building was completely
destroyed, resulting in $5,239,041 in damage to the building, $1,170,052 in damage to the
personal property inside of the building, and an undetermined amount of “business income
interruption damages.” Because Chemical was unable to obtain full compensation for the fire
damage, it filed this lawsuit against Berkshire, alleging negligence and breach of contract. As it
relates to Chemical’s negligence claim, Chemical alleged that Berkshire owed it a duty to
“properly advise Plaintiff regarding the types and amount of commercial insurance that should
be purchased for its building and for its business personal property,” properly advise plaintiff
“regarding the purchase of business income interruption coverage,” and properly advise plaintiff
“on how the commercial insurance policy would respond in the event of a loss.” Because
Berkshire failed to do so, and because that failure caused the damage in this case, Chemical


                                               -1-
alleged, it was entitled to “a judgment in its favor . . . in whatever amount it is deemed to be
entitled, plus interest, costs, attorneys’ fees and all consequential damages.”

       Berkshire subsequently moved for summary disposition pursuant to MCR 2.116(C)(10),
arguing, in pertinent part, that Chemical could not prove the existence of a duty. Specifically,
Berkshire asserted that it did not owe a duty to advise to Chemical, especially in light of the fact
that Chemical never questioned the clear terms of the insurance policy at issue. Conversely,
Chemical contended that Berkshire owed it a duty to advise for several reasons: (1) because
Robert F. Moglia, Jr., a 25-percent shareholder and employee of Berkshire, admitted that doing
so was his responsibility during a deposition, (2) because Berkshire was an independent
insurance agent, and (3) because Berkshire and Chemical shared a special relationship under
pertinent caselaw. The circuit court agreed with Berkshire, concluding, in pertinent part, that
summary disposition pursuant to MCR 2.116(C)(10) was appropriate because Berkshire did not
owe Chemical a duty to advise. This appeal followed.

       A circuit court’s decision on a motion for summary disposition is reviewed de novo.
Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). Whether a duty exists is a
question of law that is also reviewed de novo. Zaremba Equip, Inc v Harco Nat’l Ins Co, 280
Mich App 16, 26; 761 NW2d 151 (2008).

        Summary disposition pursuant to MCR 2.116(C)(10) is appropriate when “there is no
genuine issue as to any material fact, and the moving party is entitled to judgment or partial
judgment as a matter of law.” “A motion under MCR 2.116(C)(10) tests the factual sufficiency
of the complaint.” Maiden, 461 Mich at 120. In reviewing such a motion, this Court is required
to review the “affidavits, pleadings, depositions, admissions, and other evidence submitted by the
parties, MCR 2.116(G)(5), in the light most favorable to the party opposing the motion.” Id.
“[T]he mere possibility that the claim might be supported by evidence produced at trial” “is
insufficient under our court rules” to survive summary disposition. Id. at 121.

       “A negligence claim requires that a plaintiff prove the following four elements: (1) a
duty owed to the plaintiff by the defendant, (2) a breach of that duty, (3) causation, and (4)
damages.” Bialick v Megan Mary, Inc, 286 Mich App 359, 362; 780 NW2d 599 (2009).
“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, 6; 597 NW2d 47 (1999). Generally, “insurance agents have no
duty to advise the insured regarding the adequacy of insurance coverage.” Id. at 7. Instead,
“[s]uch an agent’s job is to merely present the product of his principal and take such orders as
can be secured for those who want to purchase the coverage offered.” Id. at 8. “However, as
with most general rules, the general no-duty-to-advise rule . . . is subject to change when an
event occurs that alters the nature of the relationship between the agent and the insured.” Id. at
9-10. Under “the ‘special relationship’ test,”

       the general rule of no duty changes when (1) the agent misrepresents the nature or
       extent of the coverage offered or provided, (2) an ambiguous request is made that
       requires a clarification, (3) an inquiry is made that may require advise and the
       agent, though he need not, gives advise that is inaccurate, or (4) the agent assumes
       an additional duty by either express agreement with or promise to the insured.
       [Id. at 10-11.]

                                                -2-
        In this case, the circuit court concluded that Berkshire had no duty to advise Chemical
regarding the adequacy of its insurance coverage under Harts. Specifically, it concluded that the
general no-duty-to-advise rule and none of the four exceptions set forth in the “special
relationship” test applied. Thus, it granted Berkshire’s motion. On appeal, Chemical argues that
the circuit court’s decision was erroneous for four reasons: (1) because Moglia admitted that
advising Chemical regarding the adequacy of its insurance coverage was his responsibility, (2)
because defendants stated that the circuit court could “ ‘assume . . . that Berkshire had a duty to
advise Chemical Technology and to obtain adequate coverage’ ” in a lower court pleading, (3)
because Berkshire was an independent insurance agency, and (4) because at least one of the
exceptions set forth in the “special relationship” test applied. Because we disagree in all four
respects, we affirm the circuit court’s February 20, 2015 opinion and order granting summary
disposition to Berkshire pursuant to MCR 2.116(C)(10).

        First, we reject Chemical’s argument that a duty arose because Moglia admitted that
advising Chemical regarding the adequacy of its insurance coverage was his responsibility.
Chemical does not provide any authority in support of this position. Thus, it is abandoned.
Peterson Novelties, Inc v City of Berkley, 259 Mich App 1, 14; 672 NW2d 351 (2003). Indeed,
while Chemical describes these “admissions” as “fatal,” it does not cite to, and we are unable to
find, any authority in support of Chemical’s position that an after-the-fact, subjective admission
of responsibility somehow creates a legal duty. It is difficult to imagine that, if the shoe were on
the other foot (so to speak), Chemical would agree to be bound by Moglia’s subjective beliefs
had he denied responsibility. Therefore, we conclude that a duty did not arise merely because
Moglia admitted believing that it was his responsibility to advise Chemical regarding the
adequacy of its insurance coverage.

        We are equally unpersuaded by Chemical’s second argument—that the circuit court’s
decision should be reversed because defendants stated that the circuit court could “ ‘assume . . .
that Berkshire had a duty to advise Chemical Technology and to obtain adequate coverage’ ” in a
reply brief for purposes of its summary-disposition motion. While this claim is factually
accurate, we see no reason why this apparent concession, alone, should require reversal under the
facts and circumstances of this case. Indeed, Berkshire expressly challenged the existence of a
duty in its summary-disposition motion, Chemical expressly responded to that challenge, both
parties addressed the existence (or lack thereof) of a duty during oral argument, and the circuit
court ultimately found that issue dispositive. Because the issue was extensively addressed by the
parties, and in light of our ultimate conclusion, we discern no value in reversing the circuit
court’s summary-disposition order and remanding this matter for further proceedings despite the
fact that, in our view, Berkshire is entitled to judgment in its favor as a matter of law. Therefore,
we decline to do so.

       The third argument raised by Chemical—that the circuit court erred in concluding that
Berkshire did not owe plaintiff a duty because Berkshire was an independent insurance agency—
presents a more complicated question. In Harts, our Supreme Court did not explicitly limit its
holding to captive or exclusive, i.e., non-independent, insurance agents. Rather, when faced with
“determin[ing] whether a licensed insurance agent owes an affirmative duty to advise or counsel
an insured about the adequacy or availability of coverage[,]” it “h[e]ld that, except under very
limited circumstances not present in this case, an insurance agent owes no such duty to an
insured.” Harts, 461 Mich at 2. On appeal, Chemical argues that the holding in Harts applies

                                                -3-
only to captive or exclusive, i.e., non-independent, insurance agents. Berkshire, on the other
hand, argues that the holding in Harts applies to both captive or exclusive insurance agents as
well as independent insurance agents. Panels of this Court have agreed with both positions.
Compare Nokielski v Colton, unpublished opinion per curiam of the Court of Appeals, issued
January 4, 2011 (Docket No. 294143), and Estate of Richardson v Grimes, unpublished opinion
per curiam of the Court of Appeals, issued January 21, 2014 (Docket No. 312782), with Deremo
v TWC & Assoc, Inc, unpublished opinion per curiam of the Court of Appeals, issued August 30,
2012 (Docket No. 305810), and Micheau v Hughes & Havinga Ins Agency, unpublished opinion
per curiam of the Court of Appeals, issued May 21, 2013 (Docket No. 307914). We choose to
follow Nokielski and Richardson in concluding that the general no-duty-to-advise rule applies to
captive or exclusive, i.e., non-independent, insurance agents and independent insurance agents
alike.

        As stated above, our Supreme Court has unequivocally indicated that, generally,
“insurance agents have no duty to advise the insured regarding the adequacy of insurance
coverage.” Harts, 461 Mich at 7. Instead, insurance agents “merely present the product . . . and
take such orders as can be secured for those who want to purchase the coverage offered.” Id. at
8. This general no-duty-to-advise rule applies unless one of the four exceptions set forth in the
“special relationship” test applies. Id. at 10-11. While, as Chemical aptly recognizes, there is
some language in the Harts opinion that could lend itself to a conclusion that independent
insurance agents are not subject to this general rule, see, e.g., id. at 7 (stating that “[b]ecause he
was [the insurance company’s] agent, he had no common-law duty to advise . . . .”), id. at 8
(stating that “an agent’s job is to merely present the product of his principal . . . .”), id. (stating
that “under common law, an insurance agent whose principal is the insurance company owes no
duty to advise . . . .”), and id. at 9 (stating that “the general no-duty-to-advise rule” applies
“where the agent functions as simply an order taker for the insurance company . . . .”), we are
nevertheless convinced that, when read as a whole, the Harts decision supports only the opposite
conclusion.

        To begin, it cannot be overlooked that any discussion of the applicability of the general
no-duty-to-advise rule to captive or exclusive insurance agents was specifically related to “the
common-law duties inherent in an insurer-agent-insured relationship” before “consider[ing] the
extent to which this relationship has been affected by certain Michigan statutes that are relevant
to the establishment of an agent’s duty.” Harts, 461 Mich at 6. After discussing that common-
law duty, our Supreme Court then explained that “[s]ound policy reasons also support the
general rule that insurance agents have no duty to advise the insured regarding the adequacy of
insurance coverage[.]” Id. at 7. In our view, as panels of this Court have explained, “there is no
reason that would preclude the Harts test from applying to both types of agents” based on this
public-policy reasoning. Nokielski, unpub op at 4; Richardson, unpub op at 6 (adopting the
reasoning in Nokielski). Equally supportive of this conclusion is our Supreme Court’s discussion
regarding the Legislature’s intentional recognition of “the limited nature of the agent’s role.”
Harts, 461 Mich at 8. It stated, “What is clear from these provisions is that the Legislature has
long distinguished between insurance agents and insurance counselors, with agents being
essentially order takers while it is insurance counselors who function primary as advisors.” Id. at
8-9. This reasoning, like the public-policy reasoning, provides even further support for the
conclusion that the general no-duty-to-advise rule applies to captive or exclusive agents as well
as independent agents, and that is precisely what those same panels have explained. See

                                                 -4-
Nokielski, unpub op at 5 (“Just because an agent is independent, does not make him an insurance
counselor, with a duty to advise.”); Richardson, unpub op at 6 (adopting the reasoning in
Nokielski). Indeed, as our Supreme Court ultimately concluded, “if such a duty is to be imposed
on the [insurance agent], it should be imposed as a statutory one and not an implied judicial
one.” Harts, 461 Mich at 12 (citation and internal quotation marks omitted; alterations in
original). We conclude the same here.

        As it relates to Chemical’s fourth argument—that the circuit court erred in concluding
that Berkshire did not owe plaintiff a duty because one of the exceptions set forth in the “special
relationship” test applies—we conclude that this argument is both abandoned and meritless.
First, Chemical’s argument is abandoned because Chemical merely concludes that “criteria #1 is
met because Berkshire misrepresented the nature/extent of coverage by failing to advise
Chemical that it was underinsured; and by failing to advise business-interruption and
replacement cost coverage were available” and “criteria #4 is also met because Moglia admitted
to assuming the duty to advise Chemical on the amount of limits for its building and to advise
Chemical if that amount was inadequate” as well as because “Moglia raised Chemical’s building
and contents insurance limits in 2010, [thereby] assum[ing] the duty of setting those limits
correctly.” These conclusory statements are insufficient to warrant our review. Peterson
Novelties, Inc, 259 Mich App at 14. Additionally, Chemical’s argument ignores the fact that
Chemical is charged with having read the insurance policy at issue, Casey v Auto-Owners Ins
Co, 273 Mich App 388, 394-395; 729 NW2d 277 (2006), and “insureds’ claims that they have
reasonably relied on misrepresentations that clearly contradict the terms of the insurance policies
must fail,” Cooper v Auto Club Ins Ass’n, 481 Mich 399, 415; 751 NW2d 443 (2008). See also
Zaremba Equip, Inc, 280 Mich App at 39-40. Furthermore, we are unable to find any authority
supporting the proposition that Moglia’s after-the-fact admission of subjective responsibility or
decision to raise building and contents insurance limits somehow constitutes an express
agreement or promise to assume an additional duty. In short, there is simply nothing in the
record to support a conclusion that any one of the four exceptions set forth in the “special
relationship” test applies in this case.

       Accordingly, because Berkshire did not owe Chemical a duty to advise and none of the
exceptions set forth in the “special relationship” test were applicable, the circuit court correctly
granted summary disposition to Berkshire pursuant to MCR 2.116(C)(10).

       Affirmed. Berkshire, as the prevailing party, may tax costs pursuant to MCR 7.219.




                                                             /s/ Patrick M. Meter
                                                             /s/ Colleen A. O’Brien




                                                -5-
