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STATE OF MICHIGAN
COURT OF APPEALS


PARUL ASHOK SHAH, Plaintiff-Appellant, v ROYAL MACCABEES LIFE INSURANCE COMPANY, Defendant-Appellee,

UNPUBLISHED January 4, 2000

No. 207765 Oakland Circuit Court LC No. 95-504205 CK

PARUL ASHOK SHAH, Plaintiff-Appellant/Cross-Appellee, v ROYAL MACCABEES LIFE INSURANCE COMPANY, Defendant-Appellee/Cross-Appellant. No. 211888 Oakland Circuit Court LC No. 95-504205 CK

Before: Gribbs, P.J., and Murphy and Griffin, JJ. PER CURIAM. In Docket No. 207765, plaintiff appeals as of right from an opinion and order issued after a bench trial, holding that defendant was not liable under a $500,000 life insurance policy issued to plaintiff's mother, Mrs. Mehta, in which plaintiff was the named beneficiary. In Docket No. 211888, plaintiff appeals by leave granted, and defendant cross-appeals, from the postjudgment order awarding defendant mediation sanctions, comprised of taxable costs of $915.80 and a reasonable attorney fee in the amount of $30,000. We affirm.

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No. 207765 In reviewing a trial court's decision to grant or deny declaratory relief, we review questions of law de novo and the court's factual findings for clear error. Clear error occurs when this Court is left with a definite and firm conviction that a mistake has been made. MCR 2.613(C). Atty Gen v Cheboygan Rd Comm'rs, 217 Mich App 83, 86-87; 550 NW2d 821 (1996). An insurance policy is much the same as any other contract, a matter of agreement between the parties. Burch v Wargo, 378 Mich 200, 203-204; 144 NW2d 342 (1966). The courts will determine what that agreement was and enforce it accordingly. Id. An insurance contract is not binding until all of the conditions and terms of the parties' agreement are satisfied. Bowen v Prudential Ins Co, 178 Mich 63, 69; 144 NW 543 (1913). In the instant case, the insurance application form provides, in pertinent part: Except as provided for in the attached Receipt(s), no insurance shall take effect until the policy is accepted by the Owner and the first premium is paid to the Company and the health, habits and occupation of all proposed insureds remain as stated in the application. As the trial court properly observed, three conditions precedent were necessary for the formation of a binding contract: (1) acceptance; (2) payment of the first premium; and (3) no change in the health, habits or occupation of the proposed insured. The trial court also found that an amendment to the application added a fourth condition, namely, that there was no other insurance coverage in effect on the proposed insured. Regarding the first condition precedent, plaintiff argues that acceptance of the contract occurred on October 20, 1993, when her husband, Ashok Shah, gave a check in the amount of $2,000 for the deposit on the premium to agent Chhaya Shah (no relation) in response to the agent's statement that the policy was being approved by defendant. Alternatively, acknowledging that defendant's formal approval of the policy was not recorded until October 22, 1993, plaintiff argues that acceptance occurred on October 22, 1993. A review of the trial court's decision reveals that the trial court did not make an explicit finding of fact as to when acceptance of the insurance contract occurred, but analyzed the issue in connection with the second condition precedent, that being payment of the first premium. The trial court found that the payment of the first premium occurred on December 8, 1993, when the proposed insured, Mrs. Mehta, made full payment of the first premium upon delivery of the insurance policy. In this case, the annual premium for the policy was $11,000, which the insured elected to pay semi-annually. Thus, the amount of the first premium was $5,500. Given that plaintiff and her husband submitted a partial payment of $2,000 in October 1993, the trial court found that the proposed insured's premium payment of $3,550 on December 8, 1993, constituted full payment of the first premium.

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Contrary to plaintiff's assertion, the trial court did not err as a matter of contract interpretation when it concluded that the policy would not be effective until full payment of the first premium was made. See Michigan Law and Practice, Insurance,

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