Opinion
No. 132165.
June 8, 2007.
Court of Appeals No. 260040.
Leave to Appeal Denied.
I dissent from the decision to deny leave to appeal. I would grant leave to appeal to consider whether Allen v Cheatum, 351 Mich 585 (1958), remains good law.
Defendant Secura Insurance sought to avoid liability under the insurance policy on the ground that the insured, defendant Robert Ribbron, violated a policy provision requiring him to cooperate in the defense of a lawsuit. The Court of Appeals, relying on Cheatum, supra at 595, held that in order for Secura to successfully claim noncooperation of the insured as a defense, it must show that it was actually prejudiced by the noncooperation. As I stated in my dissenting statement in Qarana v North Pointe Ins Co, 474 Mich 1015, 1016 (2006), I question the continued validity of Cheatum, supra:
I question the continuing validity of Allen, supra, especially following this Court's decision in Rory [v Continental Ins Co, 473 Mich 457 (2005)]. Although the Court in Allen held that an insurer must show prejudice, the Court did not apply contract principles to reach its conclusion and, instead, formulated a rule that was applicable only to insurance contracts. This is entirely inconsistent with our recent holding in Rory that insurance policies are to be enforced the same as any other contract, according to their language, unless they violate the law or unless one of the traditional contract defenses such as fraud, duress, waiver, or unconscionability are proven. Rory, supra, at 461, 491. It is also inconsistent with our holding in Rory that courts do not have the authority to modify unambiguous contracts or rebalance the contractual equities struck by the parties. Id. at 461. I would thus grant leave to appeal.
In Rowland v Washtenaw Co Rd Comm, 477 Mich 197 (2007), this Court recently overruled cases engrafting an actual prejudice requirement onto MCL 691.1404(1). The same principle should apply to insurance contracts. I remain convinced that we should grant leave to appeal to address this jurisprudentially significant issue.
MARKMAN, J. I join the statement of Justice CORRIGAN.