Heniser v. Frankenmuth Mutual Insurance

506 N.W.2d 247, 201 Mich. App. 70

• Court: Michigan Court of Appeals
• Decided: August 2, 1993
• Docket: Docket No. 142957
• Status: Published

Opinions

MacKenzie, P.J.

This is an action for recovery under a homeowner’s insurance policy issued by defendant to plaintiff. Following a bench trial, the trial court found that the policy provided no coverage for plaintiff’s fire-loss claim and entered a judgment in favor of defendant. Plaintiff appeals as of right. We affirm.

The facts are undisputed. For several years, plaintiff had owned a house in Honor that he used as a seasonal residence. In September 1988, he renewed his homeowner’s policy on the house for a one-year period. In November 1988, plaintiff sold the property on a land contract, and the buyers took possession of the house. In January 1989, while the homeowner’s policy was still in effect, the house was destroyed by fire. Defendant denied coverage for the fire loss.

The policy at issue provided in relevant part in Section I — Property Coverages:

We cover:

1. the dwelling on the residence premises shown in the Declarations, including structures attached to the dwelling.

The definitions section of the policy states in relevant part:

8. "residence premises” means:

a. the one family dwelling, other structures and grounds; or

b. that part of any other building; where you reside and which is shown as the "residence premises” in the Declarations. "Residence premises” also means a two to four family dwelling where you reside in at least one of the family units and which is shown as the "residence premises” in the Declarations. [Emphasis added.]

The sole issue in this case is whether the trial court erred in finding that the policy of insurance issued by defendant to plaintiff provided no coverage for the fire loss because of the "residence premises” definition in the policy. We find no error.

Insurance policies will be construed in favor of coverage when an ambiguity exists. However, if an insurance contract fairly admits of but one interpretation, the policy should not be considered ambiguous or fatally unclear. Farm Bureau Mutual Ins Co of Michigan v Stark, 437 Mich 175, 182; 468 NW2d 498 (1991). Here, we agree with the trial court that "residence premises” as defined in the insurance policy was unambiguous and not in conflict with other language used in the policy. As found by the court, the policy is clear that the dwelling listed on the declaration sheet must be used as the insured’s residence in order to receive coverage. Here, when plaintiff sold the house two months before the fire loss, he relinquished his possessory interest and all rights to reside there. Under the clear language of the policy, the house was no longer his "residence premises,” and, thus, he was not entitled to coverage under this insurance policy. Instead, it appears that plaintiffs remedy lies with the purchasers of the house, who under the terms of the land contract were obligated to insure the property with a loss-payable clause in favor of plaintiff.

Plaintiff also relies on Powers v DAIIE, 427 Mich 602; 398 NW2d 411 (1986), and Transamerica Ins Corp of America v Buckley, 169 Mich App 540; 426 NW2d 696 (1988), to argue that an insurer is not allowed to enforce purported exclusionary language that is found in the definitions section of the insurance contract. We agree with the trial court that those cases are inapplicable under the circumstances of this case. Unlike Powers and Buckley, the policy in this case clearly defines "residence premises” without resort to unusual or multiple definitions that might frustrate the insured’s expectations or act as an exclusion. Accordingly, we affirm the decision of the trial court.

Affirmed.

Connor, J., concurred.