            If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.




                          STATE OF MICHIGAN

                            COURT OF APPEALS



HOME-OWNERS INSURANCE COMPANY,                                     UNPUBLISHED
                                                                   April 11, 2019
              Plaintiff-Appellant,

v                                                                  No. 344330
                                                                   Kalkaska Circuit Court
ESTATE OF STORMI ANN ELKINS, by JOHN                               LC No. 16-012395-CK
A. M. FERGUSON, JR., Personal Representative,
WALKIR NEIHARDT, and PIONEER STATE
MUTUAL INSURANCE COMPANY,

              Defendants-Appellees,
and

JOEL DAUGHERTY and JUSTIN M. GILBERT,

              Defendants.


Before: SWARTZLE, P.J., and CAVANAGH and CAMERON, JJ.

PER CURIAM.

        In this first- and third-party no-fault action, plaintiff, Home-Owners Insurance Company
(Home-Owners), appeals and challenges the trial court’s opinion and order granting summary
disposition in favor of defendant Pioneer State Mutual Insurance Company (Pioneer). On
appeal, Home-Owners argues that the trial court erred in its interpretation of an exclusion in a
Home-Owners’ insurance policy issued to Franices Elkins (Franices), the grandmother of the
decedent, Stormi Elkins (Stormi). We affirm.

                    I. FACTUAL AND PROCEDURAL BACKGROUND

       This case arises from a fatal single-car accident in Fife Lake, Michigan. On July 4, 2013,
Joel Daugherty picked up Stormi from Franices’s house. Before the two teenagers left, Franices
and Stormi’s mother, Angel Elkins, told Stormi that she was not allowed to drive, because she
only had her learner’s license, which had been suspended. At the time, Stormi and Daugherty
were 15 and 18 years old respectively. According to Daugherty, after he picked up Stormi, he



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picked up two other teenagers, Walkir Neihardt and Justin Gilbert. Daugherty then drove the
group to a party near Fife Lake to watch a fireworks display. The teenagers were at the party
between 11:00 p.m. and midnight. At some point, Daugherty volunteered to buy cigarettes for
another partygoer. According to Neihardt, Daugherty was “drunk,” so he let Stormi drive his
truck to the store.

        Neihardt, along with Stormi, Daugherty, and Gilbert, got in the truck, and they departed
for the store. According to Neihardt, on the way back, Stormi was “going a little too fast” for the
road, which was “twisty and windy.” Neihardt looked over at Stormi and saw the bright screen
of her phone in her lap, and then Neihardt looked over to Daugherty, who was hanging out the
passenger window. Neihardt pulled Daugherty back into the truck, and the next thing Neihardt
remembered was waking up after the crash. According to the State of Michigan Traffic Crash
Report, Stormi was driving when she was ejected from the truck. She was pronounced dead at
the scene. The report indicated that her blood was drawn, and she had a blood alcohol content
(BAC) of .05.

         On June 29, 2016, Gilbert filed his complaint against Daugherty, the Estate of Stormi
Ann Elkins, by John A. M. Ferguson, Jr., as Personal Representative (the Estate), and Gilbert’s
Insurer, Hastings Mutual Insurance Company. Gilbert alleged negligence against the Estate,
vicarious liability against Daugherty, and underinsured motorist coverage against Hastings.
Thereafter, Neihardt also filed a complaint against Daugherty, the Estate, and his insurer
Pioneer.1 On November 28, 2016, Home-Owners filed a complaint for a declaratory judgment
against the Estate, Daugherty, Neihardt, Gilbert, and Pioneer. According to Home-Owners, it
issued a policy to Stormi’s grandmother Franices, and it denied any liability on behalf of Stormi
as a relative living in the home because she was excluded from coverage for using a vehicle
“without a reasonable belief of permission.” As a result, Home-Owners requested the trial court
to enter a declaratory judgment indicating that Home-Owners did not have a duty to defend or
indemnify the estate with respect to the claims made by plaintiffs Gilbert and Neihardt. Pioneer
filed its answer to Home-Owners’ complaint for declaratory judgment, denying the assertion that
Stormi was using a vehicle without a reasonable belief of permission. Therefore, it requested the
trial court to enter a judgment declaring that Home-Owners has a duty to defend and indemnify
the Estate in the lawsuit.2

        On January 8, 2018, Home-Owners filed its motion for summary disposition under MCR
2.116(C)(10). Home-Owners argued that while Franices’s policy covers relatives who drive a
non-owned vehicle, coverage only extends to instances when the relative had a reasonable belief
of permission to use the vehicle. However, because Stormi could not have had a reasonable
belief of permission to use the vehicle, the policy’s coverage would not extend to cover the
injuries at issue in this case. Not only was Stormi 15 years old and too young to have a driver’s
license, her learner’s license was suspended, and her grandmother and her mother expressly told


1
 After receiving a stipulation from the parties, the trial court entered an order consolidating
Gilbert’s and Neihardt’s cases for purposes of discovery.
2
    The parties stipulated to consolidate Home-Owners’ case with Gilbert’s and Neihardt’s case.


                                                -2-
her not to drive on the night of the accident. Furthermore, Home-Owners argued that Daugherty
testified that he could not recall whether he gave permission to Stormi to drive the truck;
therefore, there was at least a question of fact as to whether she had a reasonable belief of
permission to use the truck.

        On January 18, 2018, Pioneer filed its own motion for summary disposition. Pioneer
argued that the Home-Owners policy exclusion had no application to the facts of the case
because Stormi had a reasonable belief of permission to use the truck. The undisputed facts were
that Daugherty provided her with the keys to the truck, sat in the front seat as she drove, and was
the only person authorized to grant Stormi permission to drive. Further, Pioneer argued that the
Home-Owners exclusion did not state that the person driving had to have “your” permission, i.e.,
permission from the policyholder; instead, the exclusion required the person to have a reasonable
belief of permission, meaning permission from the person with the authority to grant it—usually
the owner of the vehicle.

        On February 6, 2018, the trial court held a hearing on the motions for summary
disposition. Afterwards, the trial court issued an opinion and order granting Pioneer’s motion for
summary disposition and denying Home-Owners’ motion for summary disposition, concluding
that the policy exclusion only required a reasonable belief of permission from the owner of the
vehicle. The trial court held that because Home-Owners was obligated to defend the lawsuit,
Pioneer should be dismissed from the case because its policy amount was exceeded by the
coverage provided under the Home-Owners policy and Daugherty’s insurance policy through
Titan Insurance. This appeal followed.

                                 II. STANDARD OF REVIEW

        This Court reviews a trial court’s ruling on a motion for summary disposition de novo.
Auto Club Group Ins Co v Burchell, 249 Mich App 468, 479; 642 NW2d 406 (2001). When
reviewing a motion brought pursuant to MCR 2.116(C)(10), this Court “must consider the
pleadings, affidavits, depositions, admissions, and any other documentary evidence in favor of
the party opposing the motion.” Baker v Arbor Drugs, Inc, 215 Mich App 198, 202; 544 NW2d
727 (1996). This Court’s “task is to review the record evidence, and all reasonable inferences
drawn from it, and decide whether a genuine issue regarding any material fact exists to warrant a
trial.” Id. A genuine issue of material fact exists when the record, “giving the benefit of
reasonable doubt to the opposing party, would leave open an issue upon which reasonable minds
might differ.” Shallal v Catholic Social Servs of Wayne Co, 455 Mich 604, 609; 566 NW2d 571
(1997) (citation omitted). However, the court may not “assess credibility” or “determine facts on
a motion for summary judgment.” Skinner v Square D Co, 445 Mich 153, 161; 516 NW2d 475
(1994).

        We review de novo a trial court’s interpretation and application of an insurance policy.
City of Grosse Pointe Park v Michigan Muni Liability & Prop Pool, 473 Mich 188, 196; 702
NW2d 106 (2005). “Absent an ambiguity or internal inconsistency, contractual interpretation
begins and ends with the actual words of a written agreement.” Universal Underwriters Ins Co v
Kneeland, 464 Mich 491, 496; 628 NW2d 491 (2001). “A contract is ambiguous if its provisions
may reasonably be understood in different ways.” Id. Thus, “[i]f a fair reading of the entire
contract of insurance leads one to understand that there is coverage under particular

                                                -3-
circumstances and another fair reading of it leads one to understand there is no coverage under
the same circumstances the contract is ambiguous and should be construed against its drafter and
in favor of coverage.” Raska v Farm Bureau Mut Ins Co of Michigan, 412 Mich 355, 362; 314
NW2d 440 (1982).

                                        III. ANALYSIS

      Home-Owners argues that the trial court erred when it interpreted the insurance policy
and concluded that Home-Owners was obligated to provide coverage and defend the lawsuit.
We disagree.

       The subject of this litigation involves an automobile insurance policy that Home-Owners
issued to Stormi’s grandmother. Under Section IV of the policy, entitled “Individual Named
Insured,” Home-Owners provides liability coverage “to an automobile . . . not: (1) owned by or
furnished or available for regular use to you or anyone living with you.” However, the policy
includes the following exclusion: “We do not cover: . . . (3) you or a relative using an
automobile . . . without a reasonable belief of permission to do so.” The interpretation of this
exclusion is at the heart of this case.

        The trial court concluded that the Home-Owners policy covered the accident because
Stormi, as a relative, was using an automobile with a reasonable belief of permission to do so.
On appeal, Home-Owners contends that Stormi did not have a reasonable belief of permission to
use an automobile because her mother expressly forbade her from driving on the night of the
accident, Stormi was 15 years old and only had a learner’s license, which was suspended at the
time of the accident, and she had a BAC of .05 and was not allowed to legally operate a vehicle.
And even if Stormi needed permission only from Daugherty—the owner of the truck—there was
at least a question of fact as to whether Stormi could have reasonably believed she had
permission from Daugherty to drive the truck. On the other hand, Pioneer argues that Home-
Owners’ interpretation of the policy would require reading language into the exclusion that does
not exist. Pioneer contends the exclusion should simply read that a relative must have a
reasonable belief of permission from the owner to use the vehicle—not from the policyholder,
the owner, and the law itself—which is the interpretation that Home-Owners is effectively
advocating. We agree with Pioneer’s and, ultimately, the trial court’s interpretation.

        The exclusion logically reads as follows: Home-Owners does not provide coverage if (1)
the policyholder or relative, (2) uses an automobile not owned by or furnished or available for
regular use to the policyholder or relative, (3) and the policyholder or relative uses the
automobile without a reasonable belief of permission to do so. The term “permission” is defined
as “the act of permitting” or “formal consent.” Merriam-Webster’s Collegiate Dictionary (11th
ed). Understandably, only an owner, or someone authorized by the owner, may provide consent
to use his or her vehicle. Thus, in order to obtain coverage, Section IV of the policy clearly
requires the policyholder or relative of the policyholder to have a reasonable belief of permission
that the owner of the vehicle, or someone else authorized to give consent on behalf of the owner,
consented to the use of the vehicle. Other provisions in the policy support this interpretation.
Section II, entitled “Liability Coverage,” states that Home-Owners will pay damages for bodily
injury and property damage “on behalf of any person using your automobile (that is not a trailer)
with your permission or that of a relative[.]” (Emphasis added.) Section II also covers damages

                                                -4-
“on behalf of any person or organization legally responsible for the use of your automobile (that
is not a trailer) when used by you, a relative, or with your permission or that of a relative.”
(Emphasis added.) That said, Home-Owners could have drafted the exclusion and stated “your
permission” if its intent was to ensure that a relative had permission from the policyholder to
drive another’s vehicle. Because such language was not included, the clear language of the
policy exclusion requires a reasonable belief that the relative has obtained consent from only the
owner of the automobile or someone authorized to give consent on behalf of the owner.3 And
even if the policy exclusion was ambiguous and both parties’ interpretations were equally
plausible, this Court must construe the policy against the drafter and in favor of coverage.
Raska, 412 Mich at 362. Therefore, the trial court did not err in its interpretation of the policy.

         The question, then, turns on whether Stormi had a reasonable belief of permission from
Daugherty to use his truck. After reviewing the record, we conclude that there is no genuine
issue of material fact that Stormi had a reasonable belief of permission from Daugherty to use the
truck. The evidence clearly shows that Stormi was driving Daugherty’s truck at the time of the
accident while Daugherty sat in the passenger seat. Even though Daugherty testified at his
deposition that he did not remember if he allowed Stormi to drive, he admitted that he was the
only one who could have given Stormi permission to do so. Moreover, in his answer to a request
for admissions, Daugherty indicated that he let Stormi drive the truck. Additionally, Neihardt
testified that Daugherty let Stormi drive because Daugherty was too intoxicated to drive.
Neihardt also provided a detailed description of what transpired before the crash, including why
they had driven to the store, how fast Stormi was driving, and that Daugherty was hanging out
the passenger window just before the accident. Finally, the police report indicated that Stormi
had been driving the truck at the time of the accident. Viewing this evidence in the light most
favorable to Home-Owners, it is clear that Stormi had a reasonable belief that Daugherty gave
her permission to use the truck.

        Home-Owners, however, still argues that even if Daugherty allowed Stormi to drive, she
could not have had a reasonable belief of permission to use the vehicle given the other
circumstances at the time. Specifically, Stormi had been drinking, she was only 15 years old, she
did not have a driver’s license, and her grandmother and her mother told her not to drive that
night. This evidence, however, does not detract from the fact that Stormi reasonably believed
that she had permission from Daugherty, who was the owner of the truck, to use the truck. Even
if Stormi knew she could not legally drive, nothing in the policy requires the legal operation of
the vehicle. To conclude otherwise would require this Court to read new language into the
policy. Therefore, this argument is without merit.

       Home-Owners also argues that Daugherty did not have the legal authority to grant Stormi
permission to drive his vehicle. According to Home-Owners, Daugherty could not grant Stormi
permission to drive because to do so was a crime under MCL 257.325, which prohibits any
person from causing or knowingly permitting a minor to drive without a license upon a highway,


3
  Moreover, it is unreasonable to conclude that the drafter’s intent was to ensure that
policyholders give themselves permission to drive another’s automobile.


                                                -5-
and MCL 257.625(6)(a), which prohibits a minor from operating a vehicle while intoxicated.
The question here, however, is not whether Daugherty could have legally granted Stormi
permission to use the truck, but is instead limited to whether Stormi reasonably believed that she
had permission to do so. Given the factual circumstances previously discussed, the trial court
did not err when it found that Stormi had a reasonable belief that Daugherty gave her permission
to use the truck.

       Affirmed.




                                                            /s/ Brock A. Swartzle
                                                            /s/ Mark J. Cavanagh
                                                            /s/ Thomas C. Cameron




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