Yuan Lei v. Progressive Michigan Insurance Company ( 2016 )

Order Michigan Supreme Court
Lansing, Michigan
December 9, 2016 Robert P. Young, Jr.,
Chief Justice
153422 Stephen J. Markman
Brian K. Zahra
Bridget M. McCormack
David F. Viviano
Richard H. Bernstein
YUAN LEI, by BRIAN GOETZ, Joan L. Larsen,
as Next Friend, Justices
Plaintiff-Appellant,
v SC: 153422
COA: 325168
Washtenaw CC: 13-000436-NI
PROGRESSIVE MICHIGAN
INSURANCE COMPANY,
Defendant-Appellee,
and
DONNA McBRIDE, STATE FARM
MUTUAL AUTOMOBILE INSURANCE
COMPANY, CITIZENS INSURANCE
COMPANY OF AMERICA, and HOME-
OWNERS INSURANCE COMPANY,
Defendants.
____________________________________/
On order of the Court, the application for leave to appeal the February 16, 2016
judgment of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the question presented should be reviewed by this Court.
MARKMAN, J. (dissenting).
Plaintiff was struck by an uninsured motorist while crossing a street. At the time
of the accident, plaintiff lived part of the time with her stepgrandmother, Merilyn Goetz,
who was insured by defendant. The issue here is whether plaintiff is Merilyn’s “relative”
under this coverage. The trial court denied defendant’s motion for summary disposition
and subsequently entered a consent judgment in favor of plaintiff that allowed defendant
to file an appeal. In a split decision, the Court of Appeals reversed, holding that plaintiff
was not Merilyn’s relative under the policy.
The pertinent policy defines “relative” as “a person residing in the same household
as you, and related to you by blood, marriage, or adoption, and includes a ward,
stepchild, or foster child.” Plaintiff argues, and the trial court held, that plaintiff is
Merilyn’s relative because she is related to Merilyn “by marriage.” The Court of Appeals
disagreed, holding that because the phrase “and includes a . . . stepchild” provides that
stepchildren are relatives in addition to persons related to the insured by marriage, this
necessarily signifies that the phrase “related to you by . . . marriage” does not include
step-relationships. According to the Court of Appeals, if the phrase “related to you by
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. . . marriage” is interpreted to include step-relationships, the phrase “and includes a . . .
stepchild” would be rendered surplusage. The Court of Appeals dissent on the other hand
concluded that the phrase “and includes a ward, stepchild, or foster child” is not meant to
be limiting, but rather illustrative and expansive so as to communicate the broad meaning
of the word “related.” According to the dissent, the phrase “related to you by . . .
marriage” must mean more than just the named insured’s spouse because otherwise it
would render the phrase mere surplusage given that the policy defines the word “you” to
include the named insured’s spouse.
Both sides, in my view, raise good arguments. On the one hand, if the phrase
“related to you by . . . marriage” includes step-relationships, why does the policy proceed
to state “and includes a . . . stepchild”? On the other hand, if the phrase “related to you
by . . . marriage” does not include step-relationships, what does it include? The Court of
Appeals held that it includes the named insured’s spouse. However, as the dissenting
judge pointed out, a spouse is already covered under the definition of “you.” It seems
that no matter how the contract is interpreted, one of the two phrases is rendered
surplusage.
The dissenting judge concluded that the best way to interpret the contract is to
conclude that the phrase “related to you by . . . marriage” includes step-relationships and
the phrase “and includes a . . . stepchild” is simply illustrative. Defendant argues that this
cannot be correct because neither a ward nor a foster child is necessarily “related to you
by blood, marriage, or adoption.” Therefore, we would have to conclude that the phrase
“and includes a ward, stepchild, or foster child” is intended to expand coverage with
regards to a ward or a foster child, but is only intended to be illustrative with regards to a
stepchild. Perhaps that is appropriate though because a ward or a foster child could be
“related to you by . . . marriage” and in that case the phrase would be illustrative rather
than expansive. In other words, it might simply be the case that the parties to the contract
intended the phrase to be both illustrative and expansive depending on the circumstances.
Because I believe that the dissent sets forth a reasonably persuasive harmonizing
analysis of the policy language and because “when parties have freely established their
mutual rights and obligations through the formation of unambiguous contracts, the law
requires this Court to enforce the terms and conditions contained in such contracts, if the
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contract is not ‘contrary to public policy,’ ” Bloomfield Estates Improvement Ass’n v
Birmingham, 479 Mich. 206, 213 (2007) (citation omitted), I would grant leave to appeal
to consider whether the Court of Appeals correctly interpreted the instant policy.
BERNSTEIN, J., joins the statement of MARKMAN, J.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
December 9, 2016
a1209
Clerk