Michigan Mutual Insurance v. Shaheen

300 N.W.2d 599, 101 Mich. App. 761, 1980 Mich. App. LEXIS 3088

• Court: Michigan Court of Appeals
• Decided: November 6, 1980
• Docket: Docket 43340
• Status: Published

Opinions

Per Curiam.

On June 22, 1973, defendant Kassab Daher was a passenger in an automobile insured by plaintiff, Michigan Mutual Insurance Company. The car was involved in an accident with another vehicle, the driver of which was uninsured. Daher filed a claim with the insurance company for payment of $20,000 under the uninsured motorist provision of the policy. In return for payment, Daher, in the presence of his attorney, defendant Shaheen, signed a release and a trust agreement wherein he agreed to be a trustee in consideration of payment on his claim and to hold, for the benefit of plaintiff, all rights and claims which he had against any other parties involved in the action.

Defendants instituted suit against other parties involved in the action, including a bar. Defendant Daher received a net sum of $40,000 in settlement. Plaintiff made a demand for the $20,000 pursuant to the trust agreement but was informed that it could only be paid $2,500.

Plaintiff brought suit against defendants Shaheen and Daher. Daher moved for summary judgment based on GCR 1963, 117.2(1) and (3). Shaheen moved for summary judgment based on GCR 117.2(1). The motions were granted by the trial judge. Plaintiff appeals as of right.

Defendant Shaheen’s motion for summary judgment was based on GCR 1963, 117.2(1), which is concerned with the legal sufficiency of a claim. Such a motion is tested on the pleadings alone. Todd v Biglow, 51 Mich App 346; 214 NW2d 733 (1974). In examining the pleadings, the trial court is obliged to accept every well-pled allegation as true. The court must also accept as true all conclusions that can reasonably be drawn from the factual allegations. The applicable standard is whether the plaintiffs claim, on the pleadings, is so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recover. Crowther v Ross Chemical & Manufacturing Co, 42 Mich App 426; 202 NW2d 577 (1972).

The trial court relied upon Rogers v Horvath, 65 Mich App 644; 237 NW2d 595 (1975), in granting Shaheen’s motion for summary judgment based on GCR 1963, 117.2(1). In Rogers, this Court held that a plaintiff has no cause of action for medical malpractice against a physician who examined her on behalf of her employer in preparation for testifying before a workmen’s compensation referee and not for plaintiffs benefit to diagnose or treat an ailment.

We agree with the trial court’s ruling in the instant case that plaintiffs complaint does not state a claim against Shaheen upon which relief can be granted. The complaint does not allege that Shaheen was contractually committed to the plaintiff either by the written release and trust agreement or by a separate contract, express or implied. Plaintiff contends that it set forth a cause of action for breach of implied contract. To have an implied contract, however, the defendant must have received a benefit from the plaintiff, one that is inequitable for defendant to retain. Moll v Wayne County, 332 Mich 274; 50 NW2d 881 (1952). Plaintiff has not indicated what benefit Shaheen received from the plaintiff. The benefit of the insurance settlement paid by plaintiff went to Daher, who was the party to the release and trust agreement.

Further, the complaint does not allege that there existed a professional attorney-client relationship between plaintiff and the defendant. In fact, the contrary is clearly implied by the fact that, throughout the complaint, Shaheen is referred to as Daher’s attorney.

Thus, at most, plaintiff’s complaint alleged that, although Shaheen was aware of Daher’s obligations under the release and trust agreement, he assisted Daher in retaining the money. The allegation is insufficient to allege a breach of contract claim.

Defendant Daher’s motion for summary judgment under GCR 1963, 117.2(1) and (3) was based on two separate grounds. Daher first alleged that the release and trust agreement relied upon by the plaintiff were executed without good and valuable consideration, rendering these agreements unenforceable. Daher admits that he signed the release and trust agreement and that the plaintiff paid Daher’s claim under the plaintiffs insurance policy in consideration for Daher’s signing the release and trust agreement.

In Matson v State Farm Mutual Automobile Ins Co, 65 Mich App 713; 238 NW2d 380 (1975), this Court held that an insurance contract may limit the liability of the insurer to an insured under uninsured motorist coverage by reducing the amount payable under the coverage by other sums paid to the insured by any other person or organization liable for the injury. A trust agreement was signed by the insured similar to that signed by Daher here. This Court found the agreement was supported by consideration and enforceable against the estate of the insured. No question arose in Matson as to whether the amount of payment represented by the uninsured motorist insurance coverage compensated the insured for damages suffered. The Court, in fact, was concerned that recovery on the uninsured motorist coverage and additional recovery under the dram-shop act would result in a redundancy of damages.

The insured here argues that there is no consideration for the execution of the release and trust agreement because even receipt of the uninsured motorist insurance proceeds and the dramshop payment do not fully compensate him for his losses. This Court has held that the purpose of uninsured motorist coverage is to place the victim of the uninsured motorist in the same position he would have occupied had the tortfeasor been insured. Reliance Ins Co v Haney, 54 Mich App 237; 220 NW2d 728 (1974), Saari v State Farm Mutual Automobile Ins Co, 72 Mich App 278; 249 NW2d 390 (1976). We therefore agree that, unless the insured was made whole, there was not consideration for his promise to reimburse the plaintiff.

Daher’s motion for summary judgment was also based on the contention that plaintiffs action is barred because it is contrary to and in violation of public policy. Daher argues that public policy requires that the trust agreement be interpreted to entitle the insurer to be subrogated to the proceeds of any settlement only if the injured party has been fully compensated for his losses. Plaintiff contends that the sole interpretation of the trust agreement imposes no conditions on the right of the insurance company to be subrogated to the proceeds of any settlement or judgment from any person legally responsible up to the amount actually paid to the insured.

We find that the trust agreement should be interpreted to compel defendant Daher to reimburse the plaintiff uninsured motorist carrier for that amount of defendant’s recovery which exceeds damages defendant has suffered, including costs and attorney fees. Plaintiff is liable for the amount of damages suffered, reduced by the settlement amount, the liability not to exceed $20,000. Michigan Mutual Liability Co v Karsten, 13 Mich App 46; 163 NW2d 670 (1968), Michigan Mutual Liability Co v Mesner, 2 Mich App 350; 139 NW2d 913 (1966). Thus, Daher is entitled to be compensated for his injuries, but only to the extent of his actual loss, including costs and attorney fees; double recovery is not permitted.

The issue of whether the insured has been fully compensated or whether there has been duplicate recovery has not been determined. Therefore, summary judgment was improper.

Affirmed as to defendant Shaheen; reversed and remanded as to defendant Daher for a determination of the amount of his damages.