Farm Bureau General Insurance Company of Mich v. Omar Hyder Khan ( 2020 )

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
FARM BUREAU GENERAL INSURANCE UNPUBLISHED
COMPANY OF MICHIGAN, August 20, 2020
Plaintiff/Intervenor-Appellee,
v No. 347918
Wayne Circuit Court
LOVELY HORE, LC Nos. 17-015647-CK
17-013286-NI
Defendant/Plaintiff-Appellant,
and
OMAR HYDER KHAN, MINARA BEGUM
CHOWDHURY, RAFNA BEGUM CHOWDHURY,
MOHAMMED SALEH AHMED, RED AHMED,
TAZIM ULLAH, and DAVID EDWARD
MOLITOR,
Defendants.
FARM BUREAU GENERAL INSURANCE
COMPANY OF MICHIGAN,
Plaintiff/Intervenor-Appellee,
v No. 347987
Wayne Circuit Court
OMAR HYDER KHAN, LC Nos. 17-015647-CK,
17-013286-NI
Defendant-Appellant,
and
LOVELY HORE,
Defendant/Plaintiff,
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and
MINARA BEGUM CHOWDHURY, RAFNA
BEGUM CHOWDHURY, MOHAMMED SALEH
AHMED, RED AHMED, TAZIM ULLAH, and
DAVID EDWARD MOLITOR,
Defendants.
FARM BUREAU GENERAL INSURANCE
COMPANY OF MICHIGAN,
Plaintiff/Intervenor-Appellee,
v No. 348004
Wayne Circuit Court
MINARA BEGUM CHOWDHURY and RAFNA LC Nos. 17-015647-CK,
BEGUM CHOWDHURY, 17-013286-NI
Defendants-Appellants,
and
LOVELY HORE,
Defendant/Plaintiff,
and
OMAR HYDER KHAN, MOHAMMED SALEH
AHMED, RED AHMED, TAZIM ULLAH, and
DAVID EDWARD MOLITOR,
Defendants.
Before: RONAYNE KRAUSE, P.J., and SAWYER and BOONSTRA, JJ.
RONAYNE KRAUSE, P.J. (concurring in part and dissenting in part)
I fully concur in the majority’s analysis and conclusion that the business-use exclusion in
the insurance policy between Khan and Farm Bureau is enforceable and consistent with public
policy. I respectfully disagree that the exclusion applies irrespective of whether the insured
received any compensation for the transportation of passengers. On this record, I would find no
question of fact that Khan was never compensated in any way for transporting passengers, but was
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instead merely doing a favor for a family member and fellow members of his own local cultural
group. Therefore, I also respectfully disagree with the majority that “the underlying use of Khan’s
vehicle was commercial, not charitable or volunteer.” I would reverse and remand.
As the majority outlines, at issue is a policy exclusion that denies coverage:
for liability arising out of the ownership or operation of a vehicle while it is being
used to carry persons or property for a fee. Reimbursement of reasonable mileage
expenses incurred by the insured is not considered a fee. This exclusion does not
apply to a share-the-expense car pool[.]
The majority and the trial court conclude that the above exclusion applies irrespective of the
recipient of the fee. I disagree. Insurance policies are contracts and are interpreted as such.
Meemic Ins Co v Fortson, ___ Mich ___, ___; ___ NW2d ___ (2020) (Docket No. 158302, slip
op at pp 5-6). Contracts must be read as a whole, not piecemeal. See Laevin v St Vincent de Paul
Soc of Grant Rapids, 323 Mich. 607, 609-610; 36 NW2d 163 (1949).
The majority focuses on the fact that the first sentence of the exclusion is written in the
passive voice. The majority reasonably concludes that, as a consequence, the first sentence
standing alone makes the act (using the vehicle to carry persons or property for a fee) significant
and the actor (the person so using the vehicle) irrelevant. See Vayda v Co of Lake, 321 Mich. App.
686, 698; 909 NW2d 874 (2017). However, language phrased in the passive voice is subject to
restrictions based on context. See People v Gloster, 499 Mich. 199, 207; 880 NW2d 776 (2016).
In addition to other surrounding language, the location in which the passive-voice phrasing occurs
may serve to specify an actor. See Nat’l Pride and Work, Inc v Governor, 274 Mich. App. 147, 159
n 10; 732 NW2d 139 (2007). Any reasonable reading of an insurance policy would generally
expect an unspecified actor to be the insured (or possibly an agent of the insured) unless otherwise
stated. Notably, the second sentence of the exclusion explicitly discusses receipt by the insured of
compensation for expenses, strongly suggesting that the exclusion is intended to limit coverage
based on the insured’s conduct.
Other exclusions, also phrased in the passive voice, carry the same implication. For
example, the policy contains for “using a vehicle” without permission or in excess of permission.
If looking only at the use of passive voice, such exclusions might indicate that coverage is
unavailable if another driver were to operate another vehicle involved in a collision without
permission. The exclusions section refers to coverage “for any insured,” further suggesting a
general focus on the conduct of the insured. Indeed, the law generally does not expect persons to
be held responsible for the acts of a third party absent some meaningful ability to control that third
party. See De Forrest v Wright, 2 Mich. 368, 369-370 (1852); Laster v Henry Ford Health Sys,
316 Mich. App. 726, 734-736; 892 NW2d 442 (2016). I conclude that the only reasonable way to
read the exclusion is to implicitly insert the insured as an actor: the exclusion applies where the
insured used the vehicle to carry persons or property for a fee. Furthermore, although a rule of
“last resort,” if the use of passive voice in context renders the exclusion ambiguous, it should be
construed in favor of the insured’s reasonable expectations. See Wilkie v Auto-Owners Ins Co,
469 Mich. 41, 60-62; 664 NW2d 776 (2003).
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I additionally observe that although there is little case law addressing a policy exclusion
phrased exactly like the exclusion here, Michigan courts have addressed “business use” exclusions.
Our Supreme Court approved of a case from New York in which an insured towed a friend’s buggy
as a favor and without compensation, an act found not to be a business use even though the buggy
was merchandise. Lintern v Zentz, 327 Mich. 595, 602-603; 42 NW2d 753 (1950). The New York
court observed that a reasonable person reading the policy would readily understand that a business
use was forbidden, but the reader would not understand merely carrying a package for a neighbor
to be forbidden. Id. at 603. This Court, in addressing a business-use exclusion, relied on the fact
that a pizza delivery driver’s purpose of using the car was ultimately to receive payment, even
though he was not being specifically paid for the use of the car. Amerisure Ins Co v Graff
Chevrolet, Inc, 257 Mich. App. 585, 592-597; 669 NW2d 304 (2003), rev’d in part on other grounds
469 Mich. 1003 (2004). To the extent case law provides any guidance, it also establishes that the
proper emphasis is on the use of the vehicle by the insured.
Thus, the evidence is unequivocal that the insured, Khan, was not using his vehicle to
transport persons or property for a fee at any time. Even presuming Khan was aware that Barua
operated a transportation business, the evidence establishes that he was transporting people strictly
as a favor for his niece. Khan received no compensation at all, nor was any promised or expected.
There is no evidence that Khan had ever performed a similar favor. The evidence tends to suggest
that Barua was unsure Khan would even perform this favor; she certainly did not expect it. Khan’s
purpose of using his vehicles was to transport persons as a favor to a family member and,
implicitly, to several individuals who were fellow members of a fairly close-knit local cultural
group. In effect, his use of the vehicle was little different from, say, a “soccer mom” transporting
players for a fee-charging sports league. The purpose of the exclusion is clearly to prevent insureds
from operating a transportation or delivery business. By analogy to Lintern, any reasonable person
would understand the exclusion to forbid the insured from accepting payment to transport persons,
but no reasonable person would understand it to forbid doing a niece a favor.
Khan did not operate a transportation business and did not receive or expect any
compensation for transporting anyone on the day of the accident. I would reverse and remand.
/s/ Amy Ronayne Krause
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