Donegan v. Michigan Mutual Insurance

391 N.W.2d 403, 151 Mich. App. 540
CourtMichigan Court of Appeals
DecidedMay 6, 1986
DocketDocket 83221
StatusPublished
Cited by3 cases

This text of 391 N.W.2d 403 (Donegan v. Michigan Mutual Insurance) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Donegan v. Michigan Mutual Insurance, 391 N.W.2d 403, 151 Mich. App. 540 (Mich. Ct. App. 1986).

Opinion

Per Curiam.

This Court granted leave to appeal from a circuit court ruling which reversed an arbitration award in favor of defendant. We reverse.

Plaintiff, Mary Donegan, brought an action as personal representative of the estate of Paul Baker, deceased. Mary Donegan was insured under a policy issued by defendant. Paul Baker was plaintiff’s son. On July 11, 1982, Paul Baker was killed when struck by an uninsured motorist while walking along a highway in Malibu, California. Following Paul Baker’s decease, plaintiff made a claim for uninsured motorist benefits on behalf of Paul Baker’s estate. Under plaintiff’s insurance policy with defendant, coverage extended only to *543 persons specifically named in the policy and to resident relatives within the named insured’s household. Defendant maintained that, since Paul Baker was not a resident of the plaintiff household at the time of his death, the estate was not entitled to uninsured motorist benefits.

On August 16, 1982, plaintiff requested arbitration to determine uninsured motorist benefits due the estate of Paul Baker under the automobile insurance policy issued by defendant.

At the arbitration hearings, plaintiff maintained that, since Paul Baker was a resident relative in her home on a temporary visit to California, she was entitled to uninsured motorist coverage under the insurance policy written by defendant. Plaintiff and her daughters, Mary Jane Lawrence and Marlene Baker, testified. Plaintiff testified that Paul Baker had resided with her in Southfield, Michigan, until August 1, 1977, when he took up residence with his girlfriend in Hazel Park, Michigan. After he and his girlfriend broke up, Paul Baker vacated the flat where he resided on June 30, 1981, and resided with plaintiff. He had his own bedroom and kept miscellaneous furnishings such as a stereo, chess set, coin collection, personal clothing, and other belongings in the home. Some of Paul Baker’s furniture was used in the home. After returning to the Southfield home, Paul Baker received mail there, and changed his Michigan driver’s license to reflect the Southfield address. While in Southfield, Paul Baker took meals with plaintiff and his stepfather and attended social functions with them.

Sometime after June 30, 1981, Paul Baker confined himself at a center for drug and alcohol abuse in Royal Oak. During this stay, he regularly spent weekends at the Southfield home. Paul Baker was alleged to have had an alcohol problem *544 for many years which was reactivated following the breakup with his girlfriend.

Approximately two weeks before Thanksgiving in 1981, Paul Baker left for California, allegedly to visit his sister there. He took some clothing but left most of his belongings in the Southfield home. He never requested that his belongings or mail be sent to California. He continued to receive mail at the Southfield home. The length of his stay in California at the time of his death was IV2 months.

While in California, Paul Baker remained in contact with plaintiff and his sister Mary Jane Lawrence. Plaintiff sent money to him in California. Paul Baker stayed with Marlene Baker for two brief periods; the rest of the time, he resided in motels and rooming houses. It was alleged that he supported himself by doing odd jobs such as house painting and working as a short-order cook. About two weeks before his death, Paul Baker allegedly telephoned Mary Jane Lawrence and plaintiff and told them he intended to return to Southfield after visiting Los Angeles. At the July 11, 1982, accident scene, police located a sleeping bag and a pouch containing Paul Baker’s Michigan driver’s license, social security card, and other personal items.

On December 27, 1983, the majority of the Board of Arbitrators denied the plaintiff’s claim against the defendant.

Plaintiff filed a motion to vacate the arbitration award in circuit court. On November 30, 1984, after a hearing was held, the circuit court judge indicated that the arbitration transcript would be read to determine whether the facts were so clear that as a matter of law there was only one way to look at them or whether there were facts to be weighed by the arbitrators.

*545 On January 4, 1985, the circuit court judge granted the motion to vacate the arbitration award, ruling that the arbitrators made a clear error of law since the facts can support no other reasonable conclusion than that Paul Baker was domiciled at plaintiffs home. The circuit court erred by vacating the arbitration award on the basis that the arbitrators erred as a matter of law.

Under Michigan General Court Rule 1963, 769.9(1), now MCR 3.602(J), the court shall vacate an arbitration award upon application of a party, where:

(a) The award was procured by corruption, fraud or other undue means;
(b) There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;
(c) The arbitrators exceeded their powers; or
(d) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing as to prejudice substantially the rights of a party. [Emphasis added.]

In DAIIE v Gavin, 416 Mich 407; 331 NW2d 418 (1982), the Supreme Court concluded that, in some cases, arbitrators can be said to have exceeded their powers when they commit a legal error. The Court adopted this standard of review:

"[W]here it clearly appears on the face of the award or the reasons for the decision as stated, being substantially a part of the award, that the arbitrators through an error in law have been led to a wrong conclusion, and that, but for such error, a substantially .different award must have *546 been made, the award and decision will be set aside.” [Howe v Patrons’ Mutual Fire Ins Co of Michigan, 216 Mich 560, 570; 185 NW 864 (1921)]
We accept and adopt for application to automobile insurance policy statutory arbitration this formulation as reflecting the proper role of the courts in acting upon a motion to confirm or vacate arbitration awards. [Gavin, supra, p 443.]

The Court noted:

In many cases the arbitrator’s alleged error will be as equally attributable to alleged "unwarranted” factfinding as to asserted "error of law”. In such cases the award should be upheld since the alleged error of law cannot be shown with the requisite certainty to have been the essential basis for the challenged award and the arbitrator’s findings of fact are unreviewable. [Gavin, supra, p 429.]

Since the Supreme Court’s decision in Gavin, this Court has applied that standard several times. In St Bernard v DAIIE,

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Bluebook (online)
391 N.W.2d 403, 151 Mich. App. 540, Counsel Stack Legal Research, https://law.counselstack.com/opinion/donegan-v-michigan-mutual-insurance-michctapp-1986.