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STATE OF MICHIGAN
COURT OF APPEALS


HOME-OWNERS INSURANCE COMPANY,  Plaintiff/Counter-DefendantAppellee, v THOMAS K. WELLINGER, Defendant/Counter-Plaintiff/ThirdParty Plaintiff-Appellant, GERALD C. GRACE AGENCY, INC. Third-Party Defendant-Appellee, and GARY WEINSTEIN, Intervening Plaintiff.

UNPUBLISHED August 5, 2008

No. 275472 Oakland Circuit Court LC No. 2005-070638-CK

Before: White, P.J., and Hoekstra and Schuette, JJ. PER CURIAM. Defendant/counter-plaintiff/third-party plaintiff Thomas K. Wellinger (Wellinger), appeals as of right the trial court's order granting plaintiff/counter-defendant Home-Owners Insurance Company's (Home-Owners) and third-party defendant Gerald C. Grace Agency, Inc.'s (Grace) motions for summary disposition. We affirm. I. FACTS On September 30, 2004, Wellinger leased a 2005 GMC Denali from a car dealership. Upon a recommendation from the dealership, Wellinger visited Grace to secure insurance for the newly leased vehicle. The application for insurance, which was signed by Wellinger, indicated that Wellinger resided at 7826 Brandywine, West Bloomfield, Michigan. The application provided that Wellinger would pay $1,468.54 for the automobile insurance. However, the application did not include the expiration date of the subject policy. The second page of the application included the term "Total Semi-Annual Premium"; yet Wellinger testified that he had -1-


not been shown the second page of the application. Wellinger alleged that he was only given two pages of the five-page application and alleged that he was only in the office for 10 to 15 minutes. Craig Grace, owner of Grace, testified that after Wellinger signed the application and paid for the policy by check, he gave Wellinger an invoice for his records. That invoice indicated that the policy covered a six-month period and would expire on March 30, 2005. In January 2005, Wellinger moved to an apartment on Berkleigh Court in Farmington Hills. Wellinger filed a change of address form and forwarding order with the United States Post Office, but he admitted that he did not provide his new address to either Home-Owners or Grace following his move to the Berkleigh Court address. On February 21, 2005, Home-Owners mailed Wellinger and Grace an automatically produced notice of renewal on the automobile insurance policy. The renewal notice requested $1,462.54 to pay for insurance coverage from March 30, 2005, through September 30, 2005. Apparently, Home-Owners subsequently mailed a bill for renewing the policy to Wellinger on March 14, 2005, but did not retain a copy of this bill for its records. Home-Owners subsequently mailed Wellinger and Grace a notice of cancellation because Wellinger had not paid the premium to renew the policy by April 11, 2005. The notice of cancellation indicated that the policy would be cancelled effective May 1, 2005, if Wellinger failed to pay the premium by that time. It is undisputed that Wellinger never paid that premium. On May 3, 2005, Wellinger was involved in a car accident. The insurance policy issued to Wellinger by Home-Owners provided that the policy applied "only to accidents and losses which happen during the policy period as shown in the Declarations." Accordingly, Home-Owners denied Wellinger's claims in relation to the accident. However, in relation to the lienholder's (GMAC) interest in the vehicle, the cancellation notice was not effective until May 19, 2005. Accordingly, Home-Owners paid GMAC's claim of $41,926.01 for the loss of the vehicle. On November 18, 2005, Home-Owners filed suit against Wellinger seeking a declaratory judgment that it owed no duty to indemnify, defend, or provide personal injury protection (PIP) benefits to Wellinger in relation to the May 3, 2005, motor vehicle accident. Home-Owners contended that Wellinger lacked coverage because (1) Wellinger failed to renew the insurance policy beyond the March 30, 2005, expiration date; (2) the insurance policy had been cancelled effective May 1, 2005, based on Wellinger's failure to pay the required premium; and (3) Wellinger was a registered owner of a motor vehicle that lacked the statutorily required security. In response, Wellinger filed a counter-complaint against Home-Owners and filed a thirdparty complaint against Grace. Wellinger alleged that Home-Owners breached the insurance contract by failing to pay PIP benefits and by failing to defend and indemnify Wellinger in relation to the accident. Wellinger alleged that Grace acted negligently in failing to gather and submit correct address and previous insurance information from Wellinger. Wellinger alleged that Grace negligently failed to contact Wellinger when it learned that Wellinger's insurance policy was scheduled to be cancelled. Wellinger further alleged that Grace negligently wrote the insurance application for an improper coverage period. As a result of Grace's negligence, Wellinger contended that he lost automobile insurance coverage with no notice and at no fault of

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his own. Wellinger also filed an answer to the complaint, generally denying that he received any notice of the need to renew or the subsequent cancellation of his policy. On August 6, 2006, Home-Owners moved for summary disposition of Wellinger's claims under MCR 2.116(C)(10). In that motion, Home-Owners contended that the renewal and cancellation notices were mailed to Wellinger's address of record. Home-Owners further contended that it was undisputed that Wellinger failed to renew his policy or object to the cancellation. Home-Owners asserted that it complied with MCL 500.3020 and case law in providing notice of cancellation to Wellinger at his address of record, regardless of whether Wellinger actually received the notice. Given that Wellinger was involved in an automobile accident two days after the effective date of the cancellation, Home-Owners was no longer Wellinger's insurance provider and had no duty to defend, indemnify, or provide coverage. Home-Owners further contended that Wellinger's claim of ignorance regarding his policy period was irrelevant because Wellinger had a duty to read his policy and raise any concerns with the insurer. Wellinger challenged Home-Owners's motion for summary disposition, denying that he applied for a six-month insurance policy and that Home-Owners mailed any further correspondence to his home address, including the declaration page, insurance policy, notice of renewal, or notice of cancellation. Wellinger further argued that any such notices would have reached him if actually mailed because he had filed a change of address form with the United States Post Office. Wellinger asserted that he had seen only one page of the insurance application and that the page did not include the length of the coverage term. Wellinger challenged Home-Owners's assertion that the policy had expired or had been cancelled because Home-Owners paid GMAC's claim related to the accident. Wellinger contended that GMAC's right to collect under the insurance policy was dependent on Wellinger's rights. If Wellinger were no longer insured by Home-Owners, then GMAC would not have been entitled to the payment of its claim. Accordingly, Wellinger contended that there remained a question of fact regarding the length of the coverage term and whether the policy was still in effect at the time of the May 3, 2005, accident. In any event, Wellinger contended that the duplicate cancellation notices allegedly sent to Grace and Wellinger were inconsistent and, therefore, invalid.1 Wellinger also challenged Home-Owners's failure to provide proof that it mailed the cancellation notices. Grace also filed a motion for summary disposition under MCR 2.116(C)(10). Grace contended that an independent insurance agent does not have a special relationship with a potential insured creating a duty to advise the insured about coverage. Rather, Grace contended that an insurance agent is merely an "order taker." Moreover, Grace argued that the short-term relationship between Wellinger and Grace contradicted the existence of a special relationship. Accordingly, Grace had no duty to follow up and investigate whether Wellinger moved after purchasing his automobile insurance policy. Grace contended that the imposition of such a duty would overwhelm any insurance agency. Moreover, Grace argued that it was Wellinger's duty

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Wellinger did not explain the alleged inconsistency in this pleading.

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to read the insurance policy and related documents and ensure that they complied with his expectations. Finally, Grace contended that Wellinger's negligence claim must fail because Wellinger failed to present an expert opinion regarding the standard of care of an independent insurance agent. Wellinger challenged Grace's motion for summary disposition. Wellinger admitted that he had no standing relationship with Grace and that he did not request a consultation regarding the insurance policy. However, Wellinger asserted that he had requested a one-year policy and that Grace failed to provide the requested service. Wellinger contended that he justifiably believed that he had purchased a one-year policy based on the documentation actually provided to him and based on the cost of the insurance. Wellinger contended that he was only provided a portion of the insurance application and was never given the insurance policy or invoice. Wellinger challenged Grace's failure to contact him or to try to locate him when Grace received a copy of the cancellation notice. Grace even failed to contact Wellinger when Home-Owners requested further information regarding the vehicle's use shortly after the application was filed. Wellinger further argued that the presentation of an expert witness regarding the standard of care was unnecessary because the facts did not require an expert interpretation or specialized knowledge. Grace responded by generally challenging the mischaracterization of Craig Grace's deposition testimony. The trial court heard oral arguments on November 29, 2006. It ultimately rejected HomeOwners's assertion that Wellinger's insurance policy automatically lapsed by nonrenewal because there was testimony that Wellinger's insurance policy remained in place until the notice of cancellation was sent to Wellinger. However, the court granted Home-Owners's motion for summary disposition on the ground that the notice of cancellation terminated the policy on May 1, 2005. The trial court also granted Grace's motion for summary disposition. The court concluded that Wellinger failed to present evidence that a special relationship existed with Grace that imposed any additional duty. The court also noted that Wellinger failed to present any expert testimony to establish that Grace violated the standard of care owed by an insurance agent. The trial court entered its order granting Home-Owners's and Grace's motions for summary disposition on December 18, 2006, for reasons consistent with its findings at the hearing. This appeal followed. II. STANDARD OF REVIEW We review a lower court's determination regarding a motion for summary disposition de novo. MacDonald v PKT, Inc, 464 Mich 322, 332; 628 NW2d 33 (2001). A motion under MCR 2.116(C)(10) tests the factual support of a plaintiff's claim. Id. "In reviewing a motion for summary disposition brought under MCR 2.116(C)(10), we consider the affidavits, pleadings, depositions, admissions, or any other documentary evidence submitted in [the] light most favorable to the nonmoving party to decide whether a genuine issue of material fact exists." Singer v American States Ins, 245 Mich App 370, 374; 631 NW2d 34 (2001). Summary disposition is appropriate only if there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. MacDonald, supra at 332. III. ANALYSIS

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Home-Owners sought summary disposition on two alternative grounds: (1) Wellinger's policy automatically terminated on the expiration date of March 30, 2005, because he failed to pay the premium to renew the policy; and (2) Wellinger's policy was cancelled effective May 1, 2005, because Wellinger failed to respond to the cancellation notice by paying the policy premium. The trial court denied Home-Owners's motion on the first ground, but granted the motion on the second. We find that the trial court properly dismissed Wellinger's claims against Home-Owners. The Michigan Supreme Court noted in Morales v Auto-Owners Ins Co, 458 Mich 288, 296-297; 582 NW2d 776 (1998), citing 2 Couch, Insurance, 3d,

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