If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
PETE’S AUTO AND TRUCK PARTS, INC., and UNPUBLISHED
R&S INITIATIVES, LLC, June 9, 2022
Plaintiffs-Appellants/Cross-Appellees,
v No. 355841
Ottawa Circuit Court
GREG HIBBITTS TRANSPORT COMPANY, LC No. 18-005437-ND
STEWART TRK, LLC, GREG HIBBITTS, BMB
LEASING, LLC, and BELINE
TRANSPORTATION SERVICES, LLC,
Defendants-Appellees,
and
FREMONT INSURANCE COMPANY,
Defendant-Appellee/Cross-Appellant.
Before: BORRELLO, P.J., and JANSEN and MURRAY, JJ.
PER CURIAM.
This case arose from a fire in the engine of a parked semi-truck, which resulted in damage
to a nearby building and the building’s contents. Plaintiffs—the owner and the tenant of the
building—sought to recover damages from several defendants under various theories, including
negligence; trespass; property protection insurance benefits under the no-fault act, MCL 500.3101
et seq.; breach of contract; and unjust enrichment. Relevant to the issues on appeal, the trial court
granted summary disposition on plaintiffs’ tort claims to defendants Greg Hibbitts Transport
Company (GHTC); Stewart TRK, LLC; BMB Leasing, LLC; Beline Transportation Services
(BTS), LLC; and Greg Hibbitts (collectively, the Hibbitts defendants) on the basis that the no-fault
act applied and precluded plaintiffs’ tort claims against the Hibbitts defendants. The trial court
also granted summary disposition to the remaining defendant, Fremont Insurance Company,
concluding that plaintiffs’ claims for no-fault benefits were time-barred by MCL 500.3145(5) and
that Fremont was entitled to summary disposition on plaintiffs’ claims for breach of contract and
unjust enrichment under MCR 2.116(C)(8) and (C)(10). Plaintiffs appeal as of right, and Fremont
has filed a cross-appeal. For the reasons explained in this opinion, we affirm.
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I. FACTS AND PROCEDURAL HISTORY
On October 13, 2017, the engine of a parked semi-tractor truck caught fire, and the
resulting fire damaged an adjacent building located at 2460 Wilshire Drive in Jenison. The
building was owned by plaintiff R&S Initiatives, LLC, which in turn rented the building to plaintiff
Pete’s Auto and Truck Parts, Inc., which used the building for its business. The fire damaged both
the building and Pete Auto’s inventory inside.
According to the certificate of title for the truck, GHTC was the registered owner of the
truck that caught fire, and Hibbitts was the registered agent and sole shareholder in GHTC.
However, GHTC ceased operations in 2010, and GHTC filed a certificate of dissolution on
June 28, 2011. At the time of the fire, GHTC did not have an insurance policy in its name for the
truck. Instead, the truck was listed on a commercial auto policy, issued by Fremont, that identified
the named insured as “Stewart Trucking, LLC,” doing business as “Beline Trans LLC.”
Although the Fremont policy refers to “Stewart Trucking, LLC,” the defendant in this
case—and the entity associated with Hibbitts—is actually “Stewart TRK, LLC.” Hibbitts’s wife
was the “legal owner” of Stewart TRK, but she had nothing to do with running Stewart TRK. In
practice, Hibbitts ran Stewart TRK as well as several interrelated corporate entities, all of which
were involved in his trucking business. In total, between his various entities, Hibbitts utilized
approximately 25 to 27 trucks, all of which bear the “Beline” logo, though the trucks are titled and
operated by different entities. According to Hibbitts, the various entities were created to carry on
his trucking business after GHTC declared bankruptcy. The other entities involved with Hibbitts’s
trucking business include Beline Trans, LLC, in which Hibbitts is the sole managing member.
Hibbitts also uses another entity—BTS—to manage and oversee Stewart TRK and Beline Trans,
LLC. Hibbitts is the registered agent and manager of BTS, but he identified his son as the “legal
owner” of BTS. Like his wife, Hibbitts’s son had no involvement in running the businesses. The
final entity at issue, BMB Leasing, owns the real property used for Hibbitts’s trucking activities,
specifically a property neighboring the building that caught fire.
According to Hibbitts, he and his various business organizations were involved in the
business of transporting products, such as milk, sand, gravel, aggregate, and auto parts. Hibbitts
denied being in the business of repairing, servicing, or otherwise maintaining motor vehicles.
Hibbitts did, however, employ mechanics to work on his trucks. As confirmed by one of the
mechanics, Joseph Wilson, the mechanics employed by Hibbitts only performed work on
Hibbitts’s trucks. Hibbitts also denied using his trucks to haul hazardous materials. BTS, in
particular, hauled nonhazardous trash for Waste Management. The truck that caught fire was being
used by BTS for this purpose on the day of the fire.
More specifically, on the day of the fire, Albert Dykstra, an employee of BTS, used the
truck to haul trash for Waste Management. Then, at approximately 3:30 p.m., Dykstra parked the
truck on R&S’s property, next to R&S’s building. Soon after Dykstra parked, the truck caught
fire. The truck was unoccupied when the fire began.
Shortly after the fire, plaintiffs’ attorney—Donovan Visser—spoke with Hibbitts, who
referred Visser to Fremont as his insurance carrier. Visser contacted Fremont and received
confirmation that there was an insurance policy to cover plaintiffs’ damages, with a limit of
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$1,000,000.1 In November 2017, a fire investigation undertaken by DeKraker Investigations,
LLC, concluded that the fire was an accidental fire resulting from “an electrical failure” within the
truck’s engine compartment. Following receipt of the DeKraker report, Visser contacted the
Fremont claims adjuster assigned to plaintiffs’ claims—Nichole Chuchvara. According to Visser,
Chuchvara told him that “liability would not be an issue” because the report had concluded that
the truck was the cause of the fire, and Chuchvara told Visser that Fremont would provide
coverage, provided that sufficient documentation was submitted to support plaintiffs’ losses.
In May 2018, Visser sent two demand letters to Chuchvara, seeking payment of plaintiffs’
losses from Fremont. In July 2018, Fremont informed Visser that Steve Bowne of Burns and
Bowne Adjusting had been hired to adjust plaintiffs’ claims, and Visser provided Bowne with the
demand letters detailing plaintiffs’ losses. On August 14, 2018, Bowne informed Visser—via
voice mail—that Fremont would not be making payment and that Bowne’s estimate was not even
close to plaintiffs’ demand. Bowne told Visser that plaintiffs “might as well file suit.”
By this time, pursuant to complaints filed in July 2018, plaintiffs had, in fact, filed suit
against GHTC and Stewart TRK. Even after Bowne told them that Fremont would not be paying
the claim, plaintiffs did not, however, initially seek to add Fremont to the case. Visser maintained
that he believed that Fremont was processing the claim as a general liability or fire claim. He had
also reviewed the no-fault act and concluded that it did not apply to this case. Consequently,
plaintiffs did not initially sue Fremont under the no-fault act, and as to GHTC and Stewart TRK,
plaintiffs’ initial claims consisted of negligence and trespass claims.
Several motions for summary disposition were filed during the course of the case. The
first summary disposition motion was filed by GHTC and Stewart TRK, at which time they
asserted that plaintiffs’ torts claims could not proceed because they related to property damage
arising from the use of a motor vehicle and were subject to the no-fault act, which abolished tort
liability and instead required plaintiffs to seek recovery from Fremont. Plaintiffs responded that
the no-fault act did not apply because their claim involved a fire resulting from negligence in
failing to properly maintain the semi-trailer, which plaintiffs characterized as a casualty claim,
properly brought against GHTC and Stewart TRK. Additionally, plaintiffs argued that, even if the
no-fault act applied to a truck fire, it was inapplicable because GHTC—as the truck’s owner—
failed to maintain the required insurance. Plaintiffs also argued that the no-fault act did not cover
the loss because the Hibbitts entities were involved in the business of auto repairs or hauling
hazardous materials. Plaintiffs also asked for leave to amend their complaint to add Fremont as
an alternate defendant.
The trial court denied the motion for summary disposition, reasoning that fact questions
remained regarding whether the Hibbitts entities were involved in the auto-repair business.
Although ultimately denying GHTC and Stewart TRK’s summary disposition motion, the trial
court nevertheless agreed with many of their arguments. That is, the trial court concluded that the
damage caused by the truck fire was generally within the purview of the no-fault act. And notably,
1
In addition to seeking benefits from Fremont, Pete’s Auto also submitted a claim to its own
insurer, Nationwide Insurance. Nationwide paid Pete’s Auto $160,538.22. Fremont later
subrogated Nationwide’s claim and reimbursed Nationwide for the payments made to Pete’s Auto.
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relying on the then-recent decision in Dye,2 the trial court also rejected plaintiffs’ argument that
the no-fault act did not apply because GHTC—as the owner—failed to personally maintain
insurance on the truck. Plaintiffs later moved for reconsideration, arguing that Dye should not
apply to this case for various reasons, but the trial court denied this motion.
In the meantime, the trial court granted plaintiffs’ request to amend their complaint. In an
amended complaint, dated October 2019, plaintiffs named Fremont as a defendant and, as to
Fremont, included claims for no-fault benefits, breach of contract, and unjust enrichment. The
amended complaint also identified Hibbitts, BMB Leasing, and BTS as additional defendants,
alleging, in relevant part, that these defendants could also be held liable for negligence and
trespass.
In various subsequent motions, the Hibbitts defendants and Fremont sought summary
disposition. In sum, Fremont contended that the period of limitations had expired on plaintiffs’
no-fault claim under MCL 500.3145(5), that plaintiffs failed to state a claim for unjust enrichment,
and that plaintiffs could not pursue a breach-of-contract claim because they were not parties to the
insurance contract nor were they intended third-party beneficiaries. The Hibbitts defendants, in
comparison, again asserted that the no-fault act applied and that plaintiffs could not pursue tort
claims against them. Plaintiffs opposed the various motions for summary disposition and filed
their own motion for partial summary disposition as to Fremont, contending that equitable estoppel
precluded Fremont from raising the statute of limitations as a bar to plaintiffs’ claims. In addition,
plaintiffs moved to strike the Hibbitts defendants’ affirmative defenses filed on September 19,
2018, in response to plaintiffs’ initial complaint.3
The trial court dismissed plaintiffs’ claim for breach of contract against Fremont under
MCR 2.116(C)(8). Later, following the close of discovery, the trial court entered a 33-page written
opinion and order (1) granting summary disposition to defendants on all then-remaining claims,
(2) denying plaintiffs’ motion for partial summary disposition, and (3) denying plaintiffs’ motion
to strike the Hibbitts defendants’ affirmative defenses. Briefly stated, in granting summary
disposition to the Hibbitts defendants, the trial court concluded that no genuine issue of material
fact remained and that the Hibbitts defendants were not in the auto-repair business. The trial court
again concluded that Dye applied retroactively to this case. Additionally, having concluded that
the case fell within the no-fault act and that insurance had been maintained for the truck, the trial
court determined that plaintiffs could not pursue tort claims against the Hibbitts defendants
because the no-fault act abolished tort liability in these circumstances. As to Fremont, the trial
court concluded that plaintiffs’ claims for no-fault benefits were time-barred by MCL 500.3145(5),
rejecting plaintiffs’ arguments that their claim should be considered timely on the basis of the
relation-back doctrine, fraudulent concealment, or equitable estoppel. Finally, the trial court
granted summary disposition to Fremont on plaintiffs’ unjust-enrichment claim under MCR
2.116(C)(8) and (C)(10).
2
Dye v Esurance Prop & Cas Ins Co, 504 Mich 167; 934 NW2d 674 (2019).
3
By this time, in response to plaintiffs’ amended complaint in October 2019, the Hibbitts
defendants had filed amended affirmative defenses.
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II. THE HIBBITTS DEFENDANTS
A. STANDARDS OF REVIEW
We review de novo a trial court’s decision on a summary disposition motion. Henry Ford
Health Sys v Everest Nat’l Ins Co, 326 Mich App 398, 402; 927 NW2d 717 (2018). “Summary
disposition is appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding any
material fact and the moving party is entitled to judgment as a matter of law.” Id. (quotation
marks and citation omitted). Issues involving statutory interpretation or the interpretation of a
contract are also reviewed de novo. Id. Whether a judicial decision applies retroactively poses a
question of law, which is likewise reviewed de novo. Farley v Advanced Cardiovascular Health
Specialists PC, 266 Mich App 566, 570-571; 703 NW2d 115 (2005). Decisions relating to the
enforcement of scheduling orders and whether to consider untimely documents are matters within
the trial court’s discretion. Flanagin v Kalkaska Co Rd Comm, 319 Mich App 633, 640; 904
NW2d 427 (2017). Finally, we review a trial court’s decision whether to strike a pleading for an
abuse of discretion. Belle Isle Grill Corp v Detroit, 256 Mich App 463, 469; 666 NW2d 271
(2003). “A trial court abuses its discretion when it chooses an outcome outside the range of
reasonable and principled outcomes.” Andreson v Progressive Marathon Ins Co, 322 Mich App
76, 83; 910 NW2d 691 (2017).
B. PROPERTY PROTECTION BENEFITS UNDER THE NO-FAULT ACT
“The goal of the no-fault insurance system was to provide victims of motor vehicle
accidents assured, adequate, and prompt reparation for certain economic losses.” Shavers v Kelley,
402 Mich 554, 578-579; 267 NW2d 72 (1978). The economic losses covered by the no-fault act
include certain property damages. Id. at 579-580. That is, pursuant to MCL 500.3101(1), “the
owner or registrant of a motor vehicle required to be registered in this state shall maintain security
for payment of benefits under personal protection insurance and property protection insurance as
required under this chapter, and residual liability insurance.”
Provided that the security required by MCL 500.3101(1) is in effect, “[t]ort liability for
property damage arising from the use of a motor vehicle in this state has been abolished, unless
the damage is intentionally caused.” Universal Underwriters Ins Co v Kneeland, 235 Mich App
646, 654; 599 NW2d 519 (1999) (quotation marks and citation omitted), aff’d 464 Mich 491
(2001). More fully, in relevant part, MCL 500.3135(3) abolished tort liability in the context of
property damages as follows:
Notwithstanding any other provision of law, tort liability arising from the
ownership, maintenance, or use within this state of a motor vehicle with respect to
which the security required by section 3101(1) was in effect is abolished except as
to:
(a) Intentionally caused harm to persons or property. Even though a person
knows that harm to persons or property is substantially certain to be caused by his
or her act or omission, the person does not cause or suffer that harm intentionally
if he or she acts or refrains from acting for the purpose of averting injury to any
person, including himself or herself, or for the purpose of averting damage to
tangible property.
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With this abolition of tort liability, a plaintiff seeking to recover economic losses related to
property loss must generally look to the no-fault insurer, and not the insured, for payment of
damages. Matti Awdish, Inc v Williams, 117 Mich App 270, 275; 323 NW2d 666 (1982).
The property protection benefits payable by an insurer under the no-fault act—and
exceptions to an insurer’s obligation to provide coverage—are set forth in MCL 500.3121, which,
in part, states:
(1) Under property protection insurance an insurer is liable to pay benefits
for accidental damage to tangible property arising out of the ownership, operation,
maintenance, or use of a motor vehicle as a motor vehicle subject to the provisions
of this section and sections 3123, 3125, and 3127. However, accidental damage to
tangible property does not include accidental damage to tangible property, other
than the insured motor vehicle, that occurs within the course of a business of
repairing, servicing, or otherwise maintaining motor vehicles.
(2) Property protection insurance benefits are due under the conditions
stated in this chapter without regard to fault.
(3) Damage to tangible property consists of physical injury to or destruction
of the property and loss of use of the property so injured or destroyed.
[MCL 500.3121.]
1. OWNER’S OBLIGATION TO MAINTAIN INSURANCE
Plaintiffs’ arguments related to the Hibbitts defendants primarily concern the application
of Dye and whether the Hibbitts defendants maintained the no-fault security required by MCL
500.3101(1). That is, plaintiffs contend that the no-fault act does not apply and that tort liability
is not abolished under MCL 500.3135(3) because GHTC—as the registered owner of the truck—
failed to maintain security as required by MCL 500.3101(1).
To provide context and address all plaintiffs’ arguments related to an owner’s obligation
to maintain insurance under the no-fault act, some background on the caselaw related to this issue
is warranted. In this regard, this Court’s prior caselaw on this topic—namely, Barnes v Farmers
Ins Exch, 308 Mich App 1, 8; 862 NW2d 681 (2014), overruled by Dye, 504 Mich at 173-174, and
Iqbal v Bristol West Ins Group, 278 Mich App 31, 39; 748 NW2d 574 (2008)—was aptly
summarized by the Dye Court as follows:
In Iqbal v Bristol West Ins Group, the Court of Appeals first addressed in a
published decision whether every owner of a vehicle is required to maintain
insurance on the vehicle under the no-fault act . . . . In that case, the plaintiff did
not have title to any vehicle, but he frequently used his brother’s BMW. The
plaintiff was injured while driving the BMW and requested no-fault benefits. In
his answers to interrogatories, the plaintiff indicated that the BMW “ ‘belonged to
my brother but I had primary possession.’ ” The insurer claimed that the plaintiff
should also be considered an owner of the car and that as an owner, the plaintiff
must have obtained the insurance policy to obtain PIP benefits. The panel rejected
this argument, stating:
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Viewing the statutory language in the context of the given
facts, the statute would preclude plaintiff from being entitled to PIP
benefits if plaintiff “was the owner . . . of [the BMW] . . . involved
in the accident with respect to which the security required by section
3101 . . . was not in effect.” As part of the process of construing
MCL 500.3113(b), we shall make the assumption that plaintiff was
an “owner” of the BMW, as that term is defined in
MCL 500.3101(2)(g)(i). Next, the phrase “with respect to which the
security required by section 3101 . . . was not in effect,” § 3113(b),
when read in proper grammatical context, defines or modifies the
preceding reference to the motor vehicle involved in the accident,
here the BMW, and not the person standing in the shoes of an owner
or registrant. The statutory language links the required security or
insurance solely to the vehicle. Thus, the question becomes whether
the BMW, and not plaintiff, had the coverage or security required
by MCL 500.3101. As indicated above, the coverage mandated by
MCL 500.3101(1) consists of “personal protection insurance,
property protection insurance, and residual liability insurance.”
While plaintiff did not obtain this coverage, there is no dispute that
the BMW had the coverage, and that is the only requirement under
MCL 500.3113(b), making it irrelevant whether it was plaintiff’s
brother who procured the vehicle’s coverage or plaintiff. Stated
differently, the security required by MCL 500.3101(1) was in effect
for purposes of MCL 500.3113(b) as it related to the BMW.
In sum, Iqbal held that the only requirement under MCL 500.3113(b) was
that there be no-fault insurance on the vehicle—who purchased the policy was
irrelevant . . . . In Barnes v Farmers Ins Exch, the Court of Appeals was presented
with a very similar question.
* * *
In Barnes, after hearing arguments, “the trial court ruled that the no-fault
act required at least one of the ‘owners’ to have insurance. It reasoned that because
neither plaintiff nor [her mother] had insurance, plaintiff was barred from seeking
benefits under the no-fault act.” The trial court granted summary disposition to the
insurer.
The plaintiff in Barnes appealed, arguing that Iqbal required the opposite
result. The Court of Appeals stated:
In the present case, plaintiff cites Iqbal and argues that the fact that neither
she nor [her mother] insured the Cavalier does not matter because Huling did.
Plaintiff contends that this is so regardless of whether Huling was an owner of the
Cavalier. Iqbal should not be read so broadly as to apply to even nonowners. The
Court made it clear that it was addressing the problem of whether the statute
required “each and every owner” to maintain insurance on a vehicle. The Court
opined that to so hold would preclude an owner who obtained insurance from
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receiving PIP benefits as long as any other co-owner did not maintain coverage as
well.
Thus, Barnes distinguished Iqbal, stating that “while Iqbal held that each
and every owner need not obtain insurance, it did not allow for owners to avoid the
consequences of MCL 500.3113(b) if no owner obtained the required insurance.”
In sum, Barnes held that only a registrant or owner may procure no-fault insurance
for a vehicle. . . . [Dye, 504 Mich at 183-186 (citations omitted).]
The Dye Court overruled Barnes and agreed with Iqbal, holding that “an owner or
registrant of a motor vehicle is not required to personally purchase no-fault insurance for his or
her vehicle in order to avoid the statutory bar to PIP benefits.” Id. at 172-173. “Rather, MCL
500.3101(1) only requires that the owner or registrant ‘maintain’ no-fault insurance, and the term
‘maintain,’ as commonly understood, means to keep in an existing state.” Id. at 173.
As applied here, under Dye GHTC, as the truck’s owner could fulfill its obligation to
maintain insurance under MCL 500.3101(1) by having another person or entity maintain
insurance. Plaintiffs, however, offer a long list of arguments why Dye should not apply and why
the Fremont policy should not be held to satisfy MCL 500.3101(1) or to result in the abolition of
tort liability under MCL 500.3135(3).
A. RETROACTIVE APPLICATION OF DYE
First, we reject plaintiffs assertion that Dye should not apply retroactively. “[T]he general
rule is that judicial decisions are given full retroactive effect.” Pohutski v Allen Park, 465 Mich
675, 696; 641 NW2d 219 (2002). To determine whether a decision applies retroactively, the
threshold question is “whether the decision clearly established a new principle of law.” Id. at 696.
Under this threshold inquiry, a new principle of law may be established “either by overruling clear
past precedent on which the parties have relied or by deciding an issue of first impression where
the result would have been unforeseeable to the parties.” Mich Ed Employees Mut Ins Co v Morris,
460 Mich 180, 190; 596 NW2d 142 (1999). However, a complete prospective application is
generally “limited to decisions which overrule clear and uncontradicted case law.” Id. at 189
(quotation marks and citation omitted). Following consideration of the Pohutski threshold
question, there are three factors to weigh when determining whether a decision should apply
retroactively: “(1) the purpose to be served by the new rule, (2) the extent of reliance on the old
rule, and (3) the effect of retroactivity on the administration of justice.” Pohutski, 465 Mich at 696.
Plaintiffs’ retroactivity argument fails because, for purposes of the threshold question in
Pohutski, Dye did not overrule clear past precedent or clearly establish a new principle of law,
given that Barnes did not accord with the statutory language and that it was not uncontradicted
insofar as it conflicted with this Court’s earlier decision in Iqbal. In other words, rather than
announcing a new rule, Dye simply “reaffirmed the existing law, which was misinterpreted by the
Court of Appeals” in Barnes. See Mich Edu Employees Mut Ins Co, 460 Mich at 192. That Dye
was intended to reaffirm the existing law—as stated in the statutory language and recognized in
Iqbal—is apparent from the discussion of Barnes and Iqbal in Dye¸ where the Court stated:
As previously discussed, the Court of Appeals in Iqbal opined that “the
phrase ‘with respect to which the security required by section 3101 . . . was not in
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effect,’ § 3113(b), when read in proper grammatical context, defines or modifies
the preceding reference to the motor vehicle involved in the accident, here the
BMW, and not the person standing in the shoes of an owner or registrant. The
statutory language links the required security or insurance solely to the vehicle.”
Despite acknowledging that Iqbal also stated that “ ‘there is no dispute that the
BMW had the coverage, and that is the only requirement under
MCL 500.3113(b),’ ” the Barnes panel nonetheless concluded that “Iqbal does not
protect owners of vehicles if no owner provides the insurance . . . .” In our view, a
fair reading of Iqbal does not indicate that at least one owner must obtain no-fault
insurance. Indeed, Iqbal concludes that
[b]ecause the language in MCL 500.3113(b) precluding recovery of
PIP benefits links the security or insurance requirement to the
vehicle only and not the person, the trial court correctly ruled that
plaintiff was entitled to PIP benefits because the vehicle was in fact
insured, regardless of whether plaintiff was the “owner” of the
vehicle.
Thus, while Barnes may be distinguishable from Iqbal on its facts, we conclude
that those factual distinctions did not place Barnes outside the ambit of Iqbal’s
holding.
In sum, we agree with Iqbal that MCL 500.3113(b) refers to the required
security or insurance under MCL 500.3101 only as it relates to the vehicle. [Dye,
504 Mich at 188-189.]
Given the plain language of the statute and the tension between Barnes and Iqbal, Dye was
not unforeseeable and did not announce a new principle of law by overruling clear past precedent.
See Mich Ed Employees Mut Ins Co, 460 Mich at 192-197. Instead, the Dye Court adhered to the
plain language of the no-fault act—and reaffirmed the holding in Iqbal. Because Dye did not
clearly establish a new principle of law, it does not satisfy Pohutski’s threshold question and should
be applied retroactively. See Pohutski, 465 Mich at 696. Cf. WA Foote Mem Hosp v Mich
Assigned Claims Plan, 504 Mich 985; 934 NW2d 44 (2019) (concluding that the Supreme Court’s
decision in Covenant,4 which overruled decades of apparently erroneous Court of Appeals
caselaw, should be given retroactive effect because it did not clearly establish a new principle of
law).
B. DYE’S APPLICATION TO PROPERTY PROTECTION INSURANCE
Next, plaintiffs contend that Dye should be limited to cases involving PIP benefits and
should not be extended to cases involving property protection insurance benefits and the abolition
of tort liability for property damage.
As a statutory matter, Dye considered the plaintiff’s eligibility for PIP benefits in light of
MCL 500.3113(b), which precludes PIP benefits for an owner or registrant of a motor vehicle
4
Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191; 895 NW2d 490 (2017).
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“involved in the accident with respect to which the security required by [MCL 500.3101(1)] was
not in effect.” Dye, 504 Mich at 182. However, although Dye involved the PIP disqualifier in
MCL 500.3113(b), its primary focus was the language in MCL 500.3101(1) and what is required
to “maintain” insurance under this provision. Id. at 186 (“our analysis primarily concerns the
language of MCL 500.3101(1)).” The Dye Court’s focus on MCL 500.3101(1) is significant
because MCL 500.3101(1) expressly sets forth the requirement to maintain both “personal
protection insurance and property protection insurance.” (Emphasis added.) In light of that, there
is no statutory basis for concluding that Dye should only apply to PIP benefits or that some higher
or different standard is required for an owner to “maintain” property protection insurance.
Further, like the PIP disqualifier in MCL 500.3113(b), the abolition of tort liability in MCL
500.3135(3) also depends on whether “the security required by [MCL 500.3101(1)] was in effect.”
Given that the PIP disqualifier in MCL 500.3113(b) and the abolition of tort liability both turn on
whether the security required by MCL 500.3101(1) was in effect, there is again no basis in the no-
fault act for imposing different requirements for maintaining insurance for purposes of PIP benefits
as compared to determining whether tort liability—including tort liability for property damages—
has been abolished under MCL 500.3135(3).
Accordingly, we decline to limit Dye’s application to cases involving PIP benefits, and we
conclude that it applies to a determination of whether GHTC maintained no-fault insurance as
required by MCL 500.3101(1). 5
C. INSURANCE MAINTAINED BY CORPORATE ENTITIES
In arguing that the security required by MCL 500.3101(1) was not in effect, plaintiffs also
assert that GHTC lacked the ability to maintain insurance—either personally or through someone
else—because GHTC is a defunct corporation. Plaintiffs argue that maintaining insurance is not
among the activities a corporation may engage in while winding up and that, in any event, GHTC
should have finished the winding-up process long ago. In a somewhat different vein, though also
related to whether insurance was maintained by one of Hibbitts’s corporate entities, plaintiffs
dispute whether any of the entities obtained insurance for the truck when the named insured on the
Fremont policy was “Stewart Trucking, LLC,” rather than Stewart TRK.
First, with regard to the activities that a dissolved corporation may engage in, this Court
has previously explained:
Chapter 8 of the Business Corporation Act (BCA), 450.1801 et seq.,
governs the dissolution and winding up of Michigan corporations. Of particular
relevance in the present case, the BCA provides that “a dissolved corporation, its
officers, directors and shareholders shall continue to function in the same manner
5
Underlying plaintiffs’ attempts to limit Dye to PIP benefits is a policy argument—namely, that
the Dye Court sought to meet the legislative goal of ensuring medical coverage for an injured party
and that these same policy concerns do not exist in the realm of property protection. Dye, 504
Mich at 192 n 66. However, “the policy behind a statute cannot prevail over what the text actually
says.” Id. Dye sought to apply the statutory language as written; it did not purport to judicially
legislate on the basis of some unspecified policy concerns.
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as if dissolution had not occurred,” MCL 450.1834, and that a dissolved corporation
may continue to “sue and be sued in its corporate name . . . in the same manner as
if dissolution had not occurred,” MCL 450.1834(e) . . . However, the BCA
expressly makes MCL 450.1834 “[s]ubject to section 833,” which provides that
although “a dissolved corporation shall continue its corporate existence,” it “shall
not carry on business except for the purpose of winding up its affairs . . . .”
MCL 450.1833. Reading MCL 450.1833 and 450.1834 together as we must . . . it
is clear that a dissolved Michigan corporation may continue to exist beyond its date
of dissolution only until it[] has concluded “winding up its affairs . . .”
MCL 450.1833. [Flint Cold Storage v Dep’t of Treasury, 285 Mich App 483, 495-
496; 776 NW2d 387 (2009).]
By statute, during the winding-up process, title to the corporation’s assets “remains in the
corporation until transferred by it in the corporate name.” MCL 450.1834(b), and the corporation
may collect assets as well as sell or otherwise transfer assets. MCL 450.1833(a) and (b). More
generally, the corporation may perform “all other acts incident to liquidation of its business and
affairs.” MCL 450.1833(d).
Notably, part of a dissolved corporation’s power to hold assets necessarily includes the
authority to take steps to preserve its assets while winding up. See Kay Furniture Co v Rovin, 312
Mich 290, 294; 20 NW2d 194 (1945) (concluding that a corporation’s renewal of a lease was not
improper continuation of business affairs but simply “perpetuat[ing] and thereby conserv[ing] a
potential asset”); 16A Fletcher Cyclopedia, Corporations § 8134 (“A dissolved corporation may
take any necessary action to preserve its assets during the winding up process.”). In this context,
the corporation may, for example, pay obligations associated with holding property, such as
property taxes. See Kay Furniture Co, 312 Mich at 295. And, to preserve and protect assets, a
corporation may also “contract to insure its property against fire and other hazards . . . .” 16A
Fletcher Cyclopedia, Corporations § 8134. In short, contrary to plaintiffs’ arguments, the activities
that a corporation may engage in while winding-up include actions to preserve and protect assets,
such as maintaining insurance.
Even if maintaining insurance can be construed as part of winding up a corporation,
plaintiffs note that winding-up must be completed in a “reasonable time,” and GHTC failed to
complete its activities in a reasonable time. There are several flaws in plaintiffs’ argument. First,
plaintiffs fail to explain the significance of GHTC’s protracted winding up; that is, plaintiffs fail
to cite any authority regarding the effects of failing to complete the winding-up process in a
reasonable time. Plaintiffs certainly offer no authority to support that failing to complete the
winding-up process in a reasonable time would invalidate this insurance policy. Second, in
addressing the effect of GHTC’s dissolved status in the context of whether GHTC or someone else
could “maintain” insurance, the trial court specifically relied on Flint Cold Storage to conclude
that, following dissolution, GHTC’s assets would have passed to its sole shareholder—namely,
Hibbitts—and that Hibbitts, as an individual, would then be seen to have maintained insurance as
the truck’s owner. On appeal, plaintiffs do not address the trial court’s conclusion that GHTC’s
assets—including the truck—would have passed to Hibbitts upon dissolution. “When an appellant
fails to address the basis of a trial court’s decision, this Court need not even consider granting
relief.” Seifeddine v Jaber, 327 Mich App 514, 522; 934 NW2d 64 (2019). For these reasons
alone, plaintiffs cannot prevail on their “defunct corporation” argument.
-11-
More substantively, in Flint Cold Storage, 285 Mich App at 497, this Court recognized
that the BCA does not contain an express time limit for winding up corporate affairs, and in the
absence of an express time period, “a corporation must finish liquidating its business and complete
the winding up process within a reasonable time.” What constitutes a reasonable time to wind up
affairs generally presents a question of law for the court. Id. at 498. “[O]nce a dissolved
corporation has finished winding up its affairs, its existence is terminated and it ceases to exist for
all purposes.” Id.
GHTC filed its certificate of dissolution on June 28, 2011. The fire occurred in October
2017, at which time the truck was still titled in GHTC’s name. Absent different facts, more than
six years to wind up GHTC’s business affairs does not appear reasonable. Although there is little
caselaw elaborating on what constitutes a “reasonable time,” there is also nothing to suggest that
GHTC’s affairs were particular complex or that six years was required to complete the winding-
up process.
However, even assuming that GHTC should have completed winding up its affairs in a
timelier manner and that GHTC should be considered terminated and without existence for all
purposes, the trial court correctly recognized that “a dissolved corporation’s remaining assets pass
to its shareholders as beneficial owners once liquidation and winding up is complete and all
creditors have been satisfied.” Id. at 501. In other words, following dissolution, GHTC’s assets
would have passed to Hibbitts, and it was Hibbitts who—acting through his other corporate
entities—sought insurance for the truck from Fremont. Hence, even if GHTC no longer exists, it
does not follow that the truck’s owner failed to maintain insurance as required by MCL
500.3101(1).
Indeed, the no-fault act defines an “owner” to include a person holding legal title,
MCL 500.3101(l)(iii), as well as a person “having the use of a motor vehicle, under a lease or
otherwise, for a period that is greater than 30 days,” MCL 500.3101(l)(i). In this context, “having
the use” of the vehicle “means using the vehicle in ways that comport with concepts of ownership,”
meaning “proprietary or possessory usage, as opposed to merely incidental usage under the
direction or with the permission of another.” Ardt v Titan Ins Co, 233 Mich App 685, 690-691;
593 NW2d 215 (1999). The person need not actually use the vehicle; instead, “the focus must be
on the nature of the person’s right to use the vehicle.” Twichel v MIC Gen Ins Corp, 469 Mich
524, 530; 676 NW2d 616 (2004). Even if Hibbitts never formally transferred title to the truck to
his own name, there can be no real debate that Hibbitts—as the sole shareholder of the dissolved
GHTC and the individual in control of all the other involved corporations—had the right to use
the truck. The trial court did not err by concluding that, even if GHTC had ceased to exist, Hibbitts,
as an individual, could maintain insurance under MCL 500.3101(1) as the truck’s owner.
Second, with regard to the misnomer in the identity of the named insured in the Fremont
policy, plaintiffs also question whether Hibbitts—or GHTC—maintained insurance when the
named insured on the Fremont policy was “Stewart Trucking, LLC,” an entity unassociated with
Hibbitts or his other entities. In this regard, it is undisputed that Stewart Trucking, LLC, was
instead controlled by an individual with no involvement in this case, who—unlike the father in
Dye—did not obtain insurance for the truck at Hibbitts’s request. Plaintiffs’ argument regarding
the identity of the named insured is disingenuous.
-12-
It is undisputed that Hibbitts controlled several entities, which he used to operate his
trucking business. Among those entities were Stewart TRK, LLC, and Beline Trans, LLC. Indeed,
his various trucks all bear the “Beline” logo. While plaintiffs focus solely on the policy’s reference
to “Stewart Trucking, LLC,” the Fremont policy more fully identified the named insured as
“Stewart Trucking, LLC,” doing business as “Beline Trans LLC.” Although the policy incorrectly
used the word “Trucking” instead of “TRK,” this variance is immaterial considering the context
in which the insurance was obtained and the other language in the policy. That is, Hibbitts, not
anyone associated with Stewart Trucking, LLC, obtained the insurance. Hibbitts provided his own
personal information when obtaining the policy, and the policy—particularly in light of the
reference to Beline Trans, LLC—was clearly intended for the entity associated with Hibbitts and
Beline, namely: Stewart TRK. On these facts, any error in the spelling of Stewart TRK is
immaterial. See Ensley v Coolbaugh, 160 Mich 299, 303-304; 125 NW 279 (1910).
D. TERMS OF THE FREMONT POLICY
Next, plaintiffs argue that, even if Dye applies and even if the truck’s owner could have
maintained insurance for the truck through another entity, the Fremont policy would still not
provide the requisite coverage because, by its own terms, the policy only provides coverage for
vehicles owned by the named insured, which would not include the truck.
“An insurance policy is much the same as any other contract. It is an agreement between
the parties in which a court will determine what the agreement was and effectuate the intent of the
parties.” Royal Prop Group, LLC v Prime Ins Syndicate, Inc, 267 Mich App 708, 714; 706 NW2d
426 (2005) (quotation marks and citation omitted). To this end, an insurance contract must be read
as a whole, giving meaning to all its terms. Id. at 715. Words should be given their plain and
ordinary meaning. Id. And the contract “must be construed so as to give effect to every word,
clause, and phrase, and a construction should be avoided that would render any part of the contract
surplusage or nugatory.” Id.
With regard to coverage, the Fremont policy contains a table referred to as “Item Two” that
sets forth different types of coverage and a numerical designation indicating what “covered autos”
have the type of coverage in question. For property protection insurance, the covered autos have
the numerical designation “5.” The meaning of these numerical designations is provided in a table
on the Business Auto Coverage Form of the policy. As set forth in this table, the number 5
designation refers to “[o]nly those ‘autos’ you own that are required to have no-fault benefits in
the state where they are licensed or principally garaged,” including autos that “you acquire
ownership of after the policy begins provided they are required to have no-fault benefits . . .” As
defined in the policy “the words ‘you’ and ‘your’ refer to the Named Insured shown in the
Declarations,” which in this case is Stewart Trucking, LLC, doing business as Beline Trans, LLC.
Because Stewart Trucking, LLC (or Stewart TRK) does not own the truck, plaintiffs argue that the
policy does not provide coverage. This argument fails to consider the policy as a whole.
Notably, although the number 5 designation purports to limit coverage to autos owned by
the named insured, the policy does not define what it means to “own” an auto. Absent a definition
specific to the policy, contract terms are typically “given their commonly used meaning.” Group
Ins Co of Mich v Czopek, 440 Mich 590, 596; 489 NW2d 444 (1992). However, contracts must
be read as a whole, and in particular, the declarations page, the application, and the policy itself
-13-
must be construed together to determine the parties’ intent. Dancey v Travelers Prop Cas Co, 288
Mich App 1, 8; 792 NW2d 372 (2010).
In the endorsement declaration, the parties to the policy included a section labeled: “Item
Three – Schedule of Covered Autos You Own.” (Emphasis added). Under a heading of “Covered
autos you own” (emphasis added), this schedule lists various vehicles and the applicable coverages.
Item Three specifically includes the truck at issue as one that the named insured owns, and it
specifies that the coverages for the truck include property protection insurance.
Reading Item Three in harmony with the explanation for numerical designation 5, the
contract as a whole evinces the parties’ agreement that the truck was a covered auto owned by the
named insured for purposes of the policy. The contracting parties were free to reach their own
understanding and agreement regarding what vehicles the named insured “owned” for purposes of
the policy, which they did with the adoption of Item Three. Further, there is no question that the
truck is required to maintain no-fault insurance. In these circumstances, the truck falls squarely in
the parameters set forth for number “5,” meaning that the truck is covered for property protection
insurance under Item Two. Confirming this fact, as noted, Item Three details the coverages
applicable to the truck, and this list of coverages for the truck specifically includes property
protection insurance. Reading the contract as a whole, the Fremont policy included the truck in
question as a covered auto with property protection insurance. Plaintiffs’ arguments to the contrary
lack merit.
E. FRAUD IN THE PROCUREMENT
Plaintiffs also contend that insurance was not maintained as required by MCL 500.3101(1)
because the Fremont policy is void of fraud in the procurement of the policy. Plaintiffs emphasize
the various entities involved in this case, suggesting that the Hibbitts defendants are engaged in
corporate shenanigans and misrepresented the owner of the truck when obtaining insurance.
Plaintiffs’ fraud argument fails because plaintiffs lack the right to have the contract voided on the
basis of any purported fraud by the Hibbitts defendants.6
“[F]raud in the inducement to enter a contract renders the contract voidable at the option
of the defrauded party.” Bazzi v Sentinel Ins Co, 502 Mich 390, 408; 919 NW2d 20 (2018). This
means that “an insurance policy procured by fraud may be declared void ab initio at the option of
the insurer.” Id. “Rescission abrogates a contract and restores the parties to the relative positions
that they would have occupied if the contract had never been made.” Id. at 409. In contrast,
“unless rescinded, a voidable contract imposes on the parties the same obligations as if it were not
voidable.” Id. Indeed, “although fraud vitiates all contracts, [a] party who has been induced by
fraud to enter into a contract can also elect to affirm the contract and sue for damages . . . .” 27
Williston on Contracts § 69:56 (4th ed.). See also Gloeser v Moore, 284 Mich 106, 118; 278 NW
781 (1938). In short, fraud in the procurement does not void a contract unless the defrauded party
elects to seek rescission. See Allen v Charlevoix Abstract & Engineering Co, 326 Mich App 658,
663; 929 NW2d 804 (2019) (“A contract is legally enforceable even if procured by fraud[.]”).
6
We agree that Dye did not eliminate fraud defenses to insurance coverage, such as fraud in the
procurement. But it does not follow that plaintiffs have properly raised the defenses.
-14-
Based on these principles, even assuming some fraud by the Hibbitts defendants in the
procurement of the policy, it would be Fremont’s option, as the insurer and the wronged party,
whether to seek rescission of the policy. See Bazzi, 502 Mich at 408-409. At the same time,
Fremont would also have the option to elect to affirm the contract; and unless rescinded, the policy
remains binding. See id.; 27 Williston on Contracts § 69:56 (4th ed.). In contrast, plaintiffs—as
nonparties to the contract who were not defrauded by the Hibbitts defendants’ representations
made long before the events in this case—have no right to seek rescission of the policy to which
they were not a party. Cf. Whitley v Tessman, 324 Mich 215, 222; 36 NW2d 724 (1949)
(concluding that the defendants could not make “themselves the avengers of some alleged wrong”
by claiming fraud in a transaction to which they were not a party because “even if there were any
merit to the claims of fraud, defendants in no way were defrauded nor have they any right to
complain”); Bowles v Oakman, 246 Mich 674, 678; 225 NW 613 (1929) (concluding that nonparty
to an assignment could not seek to have the assignment declared void as a result fraud, rather the
assignment “was at most voidable at the instance of those defrauded”).
In addition, plaintiffs have no more right to attempt to invoke the fraud provision in the
contract than they have to standing to claim fraud as a basis to void the contract under the common
law. “A nonparty to a contract has the right to enforce a promise in a contract where that promise
is made for its benefit.” Cenovski, Inc v Mich Mut Ins Co, 200 Mich App 725, 728; 504 NW2d
722 (1993) (emphasis added). The provision regarding voiding the policy on the basis of the
insured’s fraudulent misrepresentations is designed to benefit and protect Fremont, not plaintiffs.7
Moreover, although plaintiffs contend that the fraud provision is “self-effectuating,” such an
assertion ignores the fundamental freedom of the contract and the fact that parties are always free
to modify their agreement. Quality Prods & Concepts Co v Nagel Precision, Inc, 469 Mich 362,
372; 666 NW2d 251 (2003). Plaintiffs, as nonparties to the agreement, have no right to seek
enforcement of this fraud provision when the parties have not elected to do so. See Cenovski, Inc,
200 Mich App at 728.
1. USE OF A MOTOR VEHICLE
Apart from their contentions that Dye should not apply to this case and that the Fremont
policy is inapplicable, plaintiffs more generally contest whether their damages arose out of the use
of a motor vehicle within the meaning of MCL 500.3121(1). Addressing this issue, and relying
on Mich Millers Mut Ins Co v Lancer Ins Co, 23 F Supp 3d 850 (ED Mich, 2014), the trial court
concluded that damages caused by a fire originating in the engine of a parked truck, that was not
being used for any nontransportation purpose, arose out of the use of a motor vehicle as a motor
vehicle. Plaintiffs dispute the trial court’s conclusion, asserting that their claim of trespass
distinguishes this case from that on which the trial court relied.
The “use of a motor vehicle as a motor vehicle” requirement has been explained as follows:
As a matter of English syntax, the phrase “use of a motor vehicle ‘as a motor
vehicle’ ” would appear to invite contrasts with situations in which a motor vehicle
is not used “as a motor vehicle.” This is simply to say that the modifier “as a motor
7
Fremont has never disavowed the existence of the policy or attempted to void the contract on the
basis of fraud by the Hibbitts defendants.
-15-
vehicle” assumes the existence of other possible uses and requires distinguishing
use “as a motor vehicle” from any other uses. While it is easily understood from
all our experiences that most often a vehicle is used “as a motor vehicle,” i.e., to
get from one place to another, it is also clear from the phrase used that the
Legislature wanted to except those other occasions, rare as they may be, when a
motor vehicle is used for other purposes, e.g., as a housing facility of sorts, as an
advertising display (such as at a car dealership), as a foundation for construction
equipment, as a mobile public library, or perhaps even when a car is on display in
a museum. On those occasions, the use of the motor vehicle would not be “as a
motor vehicle,” but as a housing facility, advertising display, construction
equipment base, public library, or museum display, as it were. It seems then that
when we are applying the statute, the phrase “as a motor vehicle” invites us to
determine if the vehicle is being used for transportational purposes. [McKenzie v
Auto Club Ins Ass’n, 458 Mich 214, 218-219; 580 NW2d 424 (1998).]
Moving vehicles are “quite obviously engaged in a transportational function,” id. at 221,
but vehicular movement is not required to constitute use of a motor vehicle as a motor vehicle. Id.
at 224-225. Indeed, a vehicle may be engaged in a transportational function while parked. See
Kemp v Farm Bureau Gen Ins Co of Mich, 500 Mich 245, 261; 901 NW2d 534 (2017). In
determining whether injuries arose from a parked vehicle being used as “a motor vehicle,” one
consideration is whether, “although the vehicle is parked, its involvement in an accident is
nonetheless directly related to its character as a motor vehicle.” Id. at 263 (quotation marks and
citation omitted). There is, in other words, a difference between a parked car functioning like any
other stationary object that happens to be in “the wrong place at the wrong time” and an accident
arising from some qualitative characteristic of a motor vehicle, such as mechanical problems in a
parked vehicle causing a fire. Compare Cincinnati Ins Co v Pennsylvania Gen Ins Co, 209 Mich
App 379, 382; 531 NW2d 741 (1995), with Heard v State Farm Mut Auto Ins Co, 414 Mich 139,
148; 324 NW2d 1 (1982). Ultimately, whether injuries arose out of the use of a motor vehicle as
a motor vehicle “turns on whether the injury is closely related to the transportational function of
motor vehicles.” McKenzie, 458 Mich at 225-226.
The undisputed facts indicate that the truck was used for transportational purposes—to haul
trash for Waste Management. See Kemp, 500 Mich at 259-260. It was used for this purpose on
the day of the fire and parked near plaintiffs’ building shortly before the fire. Further, the truck’s
function appears to be solely transportational, as this was not a dual-purpose vehicle like those
discussed in McKenzie that served some other, nontransportational purpose such as “a housing
facility, advertising display, construction equipment base, public library, or museum display.” See
McKenzie, 458 Mich at 219. Although the truck was parked at the time of the fire, its role in the
accident was not akin to a mere stationary object such as a tree or a wall. Instead, the fire arose
from the engine compartment of the truck, a component integral to the transportational function of
the truck as a motor vehicle. See Cincinnati Ins Co, 209 Mich App at 382; see also Mich Mut Ins
Co v CNA Ins Companies, 181 Mich App 376, 379, 381-382; 448 NW2d 854 (1989). This sort of
spontaneous fire in a vehicle falls within the coverage provided by MCL 500.3121(1). See
Universal Underwriters Ins Group v Auto Club Ins Ass’n, 256 Mich App 541, 546 n 1; 666 NW2d
294 (2003) (noting that, but for the auto-repair business exception, “spontaneous combustion” of
a vehicle awaiting auto repairs at a dealership would have triggered coverage under MCL
500.3121(1)) and Mich Millers Mut Ins Co, 23 F Supp 3d at 856-858 (concluding that spontaneous
-16-
fire in a parked limo involved use of the limo as a motor vehicle).8 The trial court did not err by
concluding that the requisite nexus existed between the injury and the transportational function of
the truck.
Although plaintiffs contend that this nexus is lacking because the Hibbitts defendants did
not have permission to park on plaintiffs’ property and plaintiffs’ complaint includes a claim for
trespass, the test under McKenzie is a functional test focused on the use of the motor vehicle and
whether the injury is closely related to the transportational function of motor vehicles. See
McKenzie, 458 Mich at 225-226. Even if simply trespassing—i.e., driving onto and parking on
plaintiffs’ property—the truck was still being used as a motor vehicle. As a tort, trespass is
abolished by MCL 500.3135(3) absent evidence that the Hibbitts defendants intentionally caused
harm to the property, and no such evidence has been presented. The truck was being used as a
motor vehicle for purposes of the no-fault act, and plaintiffs’ claim of trespass does not alter this
conclusion.
2. AUTO-REPAIR BUSINESS EXCEPTION
Even if the damages caused by the fire could be seen as arising from the use of the truck
as a motor vehicle, plaintiffs contend that the no-fault act does not provide coverage because the
Hibbitts defendants were in the “business of repairing, servicing, or otherwise maintaining motor
vehicles.” See MCL 500.3101(1).
MCL 500.3101(1) creates an exception to property protection insurance benefits that
applies to “vehicle-repair businesses.” Hastings Mut Ins Co v Grange Ins Co of Mich, 319 Mich
App 579, 586; 903 NW2d 400 (2017). Hastings involved a fire on a family-operated farm,
specifically in a barn where one of the farm employees regularly performed repair and maintenance
on farm vehicles as well the family’s vehicles. Id. at 582. Concluding that the vehicle-repair
business exception did not apply to these facts, this Court reasoned that there were no “regular
outside customers” and no “fixed price list that would indicate that the farm also operates a vehicle-
repair business.” Id. at 586. Instead, the farm’s “primary business enterprise” was farming. Id.
Here, the undisputed facts demonstrate that the Hibbitts defendants’ primary business
enterprise is trucking. Certainly, Hibbitts and his entities benefit from the provision of in-house
repairs on the trucks. But these repairs and maintenance activities are peripheral to the primary
trucking-business purposes of the Hibbitts defendants. Further, the work is limited to the Hibbitts
defendants’ trucks, as there was no evidence of outside customers or a fixed price list for services.
On the evidence presented, no material questions of fact remained, and the trial court did not err
by concluding that the vehicle-repair exception did not apply.9
8
Although nonbinding, we, like the trial court, find Mich Millers Mut Ins Co persuasive. Abela v
Gen Motors Corp, 469 Mich 603, 607; 677 NW2d 325 (2004).
9
In the context of their summary disposition arguments related to the Hibbitts defendants,
plaintiffs argue that their claim is a casualty claim and that, in these circumstances, plaintiffs’
claims were properly brought against the Hibbitts defendants, rather than Fremont, because MCL
-17-
F. LATE-FILED DOCUMENTS
In challenging the grant of summary disposition to the Hibbitts defendants, plaintiffs also
argue that the trial court should not have considered Hibbitts’s first affidavit or other supporting
documents, including the Fremont policy. These documents were filed on July 25, 2019, in
support of the Hibbitts defendants’ first motion for summary disposition. However, the hearing
on the motion was scheduled for July 26, 2019, meaning that these supporting documents were not
timely filed. See MCR 2.116(G). Nevertheless, the trial court considered them in its September
2019 decision.
The trial court had discretion to consider these untimely materials, see Flanagin, 319 Mich
App at 640, and plaintiffs have not shown that the trial court abused that discretion. The materials
were clearly relevant to the summary disposition motion, and although untimely, they were
nevertheless provided before the hearing, and plaintiffs addressed these materials on the record at
the hearing. In other words, plaintiffs did not lack notice of the evidence and were denied a chance
to respond before the trial court rendered its decision. See generally Hughes v Almena Twp, 284
Mich App 50, 69; 771 NW2d 453 (2009).10
On the whole, the trial court did not abuse its discretion by considering the late-filed
documents in July 2019, and in any event, plaintiffs are not entitled to relief because the refusal to
grant plaintiffs relief on this record does not appear inconsistent with substantial justice. See MCR
2.613(A).
G. MOTION TO STRIKE
Related to the Hibbitts defendants, plaintiffs lastly assert that the trial court abused its
discretion by denying plaintiffs’ motion to strike the Hibbitts defendants’ affirmative defenses
filed on September 19, 2018. According to plaintiffs, the affirmative defenses should have been
struck and deemed waived because the Hibbitts defendants failed to provide factual support for
their defenses and failed to provide plaintiffs with sufficient notice of the nature of their defenses.
500.3030 precludes joining an insurer as a party defendant. However, this case falls squarely
within the no-fault act, and MCL 500.3030 “l Matti Awdish, Inc, 117 Mich App at 277.
10
Even assuming that the trial court should not have considered the materials in connection with
the motion pending, it is challenging to see how plaintiffs could show prejudice. See MCR
2.613(A). Although the trial court agreed with some of the Hibbitts defendants’ arguments in their
motion, the trial court denied the Hibbitts defendants’ motion for summary disposition at the time.
Further, after the trial court concluded that Dye applied, plaintiffs moved for reconsideration and
fully briefed the Dye issue as it related to the Fremont policy, and the trial court addressed and
considered plaintiffs’ arguments in detail when denying reconsideration. See generally Al-Maliki
v LaGrant, 286 Mich App 483, 486; 781 NW2d 853 (2009). Indeed, as noted, the Hibbitts
defendants were not dismissed from the case in 2019, and throughout the remainder of the lower
court proceedings plaintiffs continued to address the policy under Dye and argue that it was
inapplicable.
-18-
A motion to strike is provided for by MCR 2.115(B), which states: “On motion by a party
or on the court’s own initiative, the court may strike from a pleading redundant, immaterial,
impertinent, scandalous, or indecent matter, or may strike all or part of a pleading not drawn in
conformity with these rules.” A motion to strike may be brought “at any reasonable time.” Belle
Isle Grill Corp, 256 Mich App at 471.
“A defense not asserted in the responsive pleading or by motion as provided by these rules
is waived, except for the defenses of lack of jurisdiction over the subject matter of the action, and
failure to state a claim on which relief can be granted.” MCR 2.111(F)(2). However, when, as in
this case, a plaintiff files an amended complaint, the responding party is entitled to serve and file
an amended response. See MCR 2.118(B). When amended pleadings are filed, “just as an
amended complaint supersedes the original complaint, a party’s most recent amended answer
supersedes any previously filed responsive pleadings.” Grzesick v Cepela, 237 Mich App 554,
562; 603 NW2d 809 (1999). Following the amendment, prior pleadings are considered
“abandoned and withdrawn.” Id. (quotation marks and citation omitted). These rules regarding
amended pleadings apply equally to affirmative defenses, and a party who properly pleads an
amended affirmative defense in answer to an amended complaint will not be deemed to have
waived that defense on the basis that it was not included in the party’s original affirmative
defenses. Robert A Hansen Family Trust v FGH Indus, LLC, 279 Mich App 468, 477 n 7; 760
NW2d 526 (2008).
Applying these principles, the Hibbitts defendants filed their first set of affirmative
defenses on September 19, 2018, and it is these initial defenses about which plaintiffs complain
on appeal. However, plaintiffs waited almost two years later, until September 2, 2020, to file their
motion to strike in the trial court. This passage of time before filing a motion to strike hardly
seems “reasonable,” see Belle Isle Grill Corp, 256 Mich App at 471, particularly when, in the
interim, the parties thoroughly litigated the applicability of the no-fault act in light of the Fremont
policy and the Hibbitts defendants filed amended affirmative defenses in October 2019 in response
to plaintiffs’ second amended complaint, specifically mentioning the no-fault act as plaintiffs
assert they were required to do.
Indeed, given the properly filed amended affirmative defenses, there is no longer any relief
plaintiffs can receive with respect to the initial affirmative defenses. The amended affirmative
defenses supersede the prior affirmative defenses, and the prior pleadings are considered
abandoned and withdrawn. See Grzesick , 237 Mich App at 562. Plaintiffs’ challenge to the
Hibbitts defendants’ initial affirmative defenses is essentially moot. See BP 7 v Bureau of State
Lottery, 231 Mich App 356, 359; 586 NW2d 117 (1998). And given that the Hibbitts defendants
properly filed amended affirmative defenses, failure to more thoroughly plead these defenses in
their initial pleading does not operate as a waiver of their defenses. See Robert A Hansen Family
Trust, 279 Mich App at 477 n 7. Plaintiffs’ arguments to the contrary lack merit.
In contrast to plaintiffs’ arguments on appeal, the trial court’s findings evince no indication
of wrongdoing or bad faith by the Hibbitts defendants in their amendment of their affirmative
defenses. Instead, the trial court concluded that plaintiffs had long been aware that Fremont
insured the Hibbitts defendants, and in fact had demanded payment from Fremont long before
filing the current suit. As detailed by the trial court, before filing suit plaintiffs investigated the
applicability of the no-fault act, but ultimately decided not to pursue claims under the no-fault act
because plaintiff’s counsel thought that it did not apply. This record simply does not support
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plaintiffs’ claims of wrongdoing or gamesmanship by the Hibbitts defendants. The trial court did
not err by denying plaintiffs’ motion to strike.
III. FREMONT
With respect to Fremont, plaintiffs argue that the trial court erred by granting summary
disposition to Fremont because, notwithstanding the one-year period of limitations in
MCL 500.3145(5), their no-fault claim against Fremont was timely because (1) the relation-back
doctrine applies, (2) Fremont fraudulently concealed plaintiffs’ no-fault claim, and (3) equitable
estoppel precludes Fremont from asserting the statute of limitations as a bar to plaintiffs’ claim.
Plaintiffs also assert that they may maintain a breach-of-contract action against Fremont as a third-
party beneficiary of the policy and that they may pursue a claim for unjust enrichment.
A. STANDARDS OF REVIEW
Absent a disputed question of fact, the determination of whether a cause of action is barred
by the statute of limitations, including questions related to fraudulent concealment, is a question
of law that this Court reviews de novo. Doe v Roman Catholic Archbishop of Archdiocese of
Detroit, 264 Mich App 632, 638; 692 NW2d 398 (2004). The application of doctrines such as
equitable estoppel or the relation-back doctrine also present questions of law, which this Court
likewise reviews de novo. Teddy 23, LLC v Mich Film Office, 313 Mich App 557, 570-571; 884
NW2d 799 (2015); Local Emergency Fin Assistance Loan Bd v Blackwell, 299 Mich App 727,
740-741; 832 NW2d 401 (2013). Likewise, whether a claim for unjust enrichment may be
maintained presents a question of law, which we review de novo. Morris Pumps v Centerline
Piping, Inc, 273 Mich App 187, 193; 729 NW2d 898 (2006).
B. STATUTE OF LIMITATIONS
A claim involving property protection benefits under the no-fault act “may not be
commenced later than 1 year after the accident.” MCL 500.3145(5). Unlike a claim for PIP
benefits, the running of the limitations period for property protection insurance is not tolled by
giving notice of injury to the insurer. Secura Ins Co v Auto-Owners Ins Co, 461 Mich 382, 387;
605 NW2d 308 (2000). Instead, “[t]he Legislature has decreed that property damage claims must
be brought within one year of the accident.” Id.
Here, the fire occurred on October 13, 2017, so plaintiffs had one year—until October
2018—to file suit for property protection insurance benefits. Plaintiffs did not bring their claim
against Fremont until they filed their amended complaint in October 2019, after the limitations
period had run. In short, their claim for property protection benefits was untimely under MCL
500.3145(5). However, on appeal, plaintiffs present three reasons why their complaint against
Fremont should be considered timely notwithstanding MCL 500.3145(5).
1. RELATION-BACK DOCTRINE
First, plaintiffs assert that the relation-back doctrine applies such that their amended
complaint in October 2019 relates back to filing their initial complaint against the Hibbitts
defendants in July 2018.
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The relation-back doctrine is governed by MCR 2.118(D), and as written “specifies that an
amendment relates back to the date of the original pleading only if it ‘adds a claim or a defense’;
it does not specify that an amendment to add a new party also relates back to the date of the original
pleading.” Miller v Chapman Contracting, 477 Mich 102, 107; 730 NW2d 462 (2007), quoting
MCR 2.118(D). In other words, the relation-back doctrine does not apply to the addition of new
parties. Id. at 106. In amending their complaint in October 2019, plaintiffs added new claims and
a new party: Fremont. The relation-back doctrine does not apply in these circumstances.
Chapman, 477 Mich at 106. Consequently, as to Fremont, plaintiffs’ amended complaint in
October 2019 was not timely under the relation-back doctrine.
2. FRAUDULENT CONCEALMENT
Plaintiffs next contend that Fremont fraudulently concealed the existence of the no-fault
claim from them, warranting tolling of the period of limitations under MCL 600.5855, which
states:
If a person who is or may be liable for any claim fraudulently conceals the
existence of the claim or the identity of any person who is liable for the claim from
the knowledge of the person entitled to sue on the claim, the action may be
commenced at any time within 2 years after the person who is entitled to bring the
action discovers, or should have discovered, the existence of the claim or the
identity of the person who is liable for the claim, although the action would
otherwise be barred by the period of limitations.
Regarding the application of this provision, this Court has explained:
Fraudulent concealment means employment of artifice, planned to prevent
inquiry or escape investigation, and mislead or hinder acquirement of information
disclosing a right of action. The acts relied on must be of an affirmative character
and fraudulent. [T]he fraud must be manifested by an affirmative act or
misrepresentation. Thus, [t]he plaintiff must show that the defendant engaged in
some arrangement or contrivance of an affirmative character designed to prevent
subsequent discovery. [T]here must be concealment by the defendant of the
existence of a claim or the identity of a potential defendant, and the plaintiff must
plead in the complaint the acts or misrepresentations that comprised the fraudulent
concealment. If there is a known cause of action there can be no fraudulent
concealment which will interfere with the operation of the statute, and in this behalf
a party will be held to know what he ought to know. . . .
For a plaintiff to be sufficiently apprised of a cause of action, a plaintiff
need only be aware of a possible cause of action. [The Reserve at Heritage Village
Ass’n v Warren Fin Acquisition, LLC, 305 Mich App 92, 122-123; 850 NW2d 649,
(2014) (quotation marks and citations omitted) (alterations in The Reserve).]
Whether a plaintiff should have known of a cause of action is judged under an objective standard.
Prentis Family Found, Inc v Barbara Ann Karmanos Cancer Inst, 266 Mich App 39, 45 n 2; 698
NW2d 900 (2005). “The statute was not designed to help those who negligently refrain from
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prosecuting inquiries plainly suggested by facts known . . .” Id. (quotation marks and citation
omitted).
Here, there is no dispute that the fire originated from a truck, i.e., a motor vehicle, and that
the fire originated from the truck had been known to plaintiffs since at least November 2017, when
the fire investigation report was issued. Viewed objectively, the fact that a motor vehicle caused
their property damages should have put plaintiffs on notice that they had a possible claim for
property protection benefits under the no-fault act. Certainly, the nature of the claim was not
concealed from them. Further, just days after the fire, Hibbitts told plaintiffs that he was insured
through Fremont, and Fremont never denied that fact. In other words, nothing was done to conceal
Fremont’s identity as a defendant possibly liable for plaintiff’s damages.
Moreover, Visser’s deposition testimony makes it abundantly clear that plaintiffs
investigated—and thus were clearly aware of—the possibility of a claim specifically under the no-
fault act. Having actually investigated and rejected a possible cause of action under the no-fault
act, it is disingenuous to now claim that Fremont somehow prevented plaintiffs from learning of a
possible no-fault claim for property protection benefits. MCL 600.5855 does not apply merely
because plaintiffs chose not to pursue a possible claim of which they were clearly aware. See
Prentis Family Found, 266 Mich App at 45 n 2.
3. EQUITABLE ESTOPPEL
We likewise reject plaintiffs argument that Fremont should be equitably estopped from
raising the statute of limitations as a bar to plaintiffs’ suit.
“[T]he doctrine of equitable estoppel is a judicially created exception to the general rule
that statutes of limitation run without interruption. It is essentially a doctrine of waiver that extends
the applicable period for filing a lawsuit by precluding the defendant from raising the statute of
limitations as a bar.” Cincinnati Ins Co v Citizens Ins Co, 454 Mich 263, 270; 562 NW2d 648
(1997). Negotiations regarding a claim that are “intended to forestall bringing an action” may be
considered an inducement warranting application of equitable estoppel. Id. However, to prevail
on an estoppel theory, a plaintiff must establish that the defendant “induced it to refrain from
bringing an action within the period fixed by statute.” Secura Ins Co v Auto-Owners Ins Co, 232
Mich App 656, 661; 591 NW2d 420 (1998), aff’d 461 Mich 382 (2000).
Plaintiffs’ equitable-estoppel argument fails for the simple reason that, through Bowne,
Fremont informed plaintiffs’ counsel on August 14, 2018—two months before the limitations
period expired—that Fremont would not be making payment and that Fremont’s damage estimate
was not even close to plaintiffs’ demands. Bowne even specifically told Visser that plaintiffs
“might as well file suit.” Plaintiffs indeed presented evidence that, before this denial, Fremont
stated that it would cover the claim, subject to proper documentation, and there were discussions
of payment between Fremont and plaintiffs’ counsel. But the fact nevertheless remains that, after
Fremont told them to “file suit,” plaintiffs still had two months in which to file suit against Fremont
before the period of limitations expired. On this record, no reasonable juror could conclude that
Fremont’s conduct could have lulled plaintiffs into believing that their claim would be honored
after the statutory period, nor that plaintiffs were left “with no alternative but to file its action after
the statutory period.” Cf. id. Equitable estoppel does not apply to these facts. See id.
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The trial court did not err by dismissing plaintiffs’ no-fault claim against Fremont on
statute-of-limitations grounds under MCL 500.3145(5).
C. BREACH OF CONTRACT
Plaintiffs next argue that the trial court erred by dismissing their breach-of-contract action.
According to plaintiffs, they may maintain a breach-of-contract action against Fremont as third-
party beneficiaries of the insurance policy.
First of all, regardless of the label they apply to their claim,11 plaintiffs’ claim for payment
of property damages arising from the use of the truck as a motor vehicle is a no-fault claim barred
by the statute of limitations in MCL 500.3145. That is, a no-fault claim arises from an insurer’s
failure to perform a contractual or statutory obligation to pay benefits to which insureds are
entitled. See Cooper v Auto Club Ins Ass’n, 481 Mich 399, 409; 751 NW2d 443 (2008). Thus,
any claim for insurance benefits under a breach-of-contract theory still falls squarely within the
parameters of the no-fault act and is subject to the statute of limitations in MCL 500.3145. See
Auto-Owners Ins Co v Compass Healthcare PLC, 326 Mich App 595, 611-613; 928 NW2d 726
(2018) and Bohlinger v Detroit Auto Inter-Ins Exch, 120 Mich App 269, 272; 327 NW2d 466
(1982). In short, even assuming plaintiffs could pursue a breach-of-contract claim for property
protection benefits under the Fremont policy, that claim is time-barred by MCL 500.3145.
In any event, the trial court correctly determined that plaintiffs are not intended third-party
beneficiaries of the contract, and as such, they cannot sue Fremont on a breach-of-contract theory.
Under MCL 600.1405, a nonparty to a contract may sue to enforce a contract only if he or she
qualifies as an intended third-party beneficiary. Farm Bureau Ins Co v TNT Equip, Inc, 328 Mich
App 667, 674; 939 NW2d 738 (2019). “A person is a third-party beneficiary of a contract only if
the contract establishes that a promisor has undertaken a promise directly to or for that person.”
Id. See also MCL 600.1405(1). In contrast to intended beneficiaries, incidental third-party
beneficiaries may not sue to enforce a contract. Schmalfeldt v North Pointe Ins, Co, 469 Mich
422, 429; 670 NW2d 651 (2003). The contract itself determines whether a party is an intended
third-party beneficiary within the meaning of MCL 600.1405(1). Id. at 428.
There is nothing in the contract—and plaintiffs do not even attempt to identify any
language in the contract—that would evince a promise directly for plaintiffs’ benefit. Instead,
plaintiffs are, at most, part of a broad class that may incidentally benefit from the existence of the
property protection insurance coverage if certain circumstances exist. See id. at 428-429; Farm
Bureau Ins Co, 328 Mich App at 681-682. As incidental beneficiaries, plaintiffs may not maintain
a breach-of-contract action directly against Fremont. See Schmalfeldt, 469 Mich at 429; Farm
Bureau Ins Co, 328 Mich App at 681-682. The trial court properly dismissed plaintiffs’ breach-
of-contract claim.
11
We are not bound by the label of a party’s claim and will instead consider the gravamen of the
suit by reading the complaint as a whole. Stephens v Worden Ins Agency, LLC, 307 Mich App
220, 229; 859 NW2d 723 (2014).
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D. UNJUST ENRICHMENT
For similar reasons, the trial court also properly dismissed plaintiffs’ claim for unjust
enrichment. Again, regardless of the label for their claim, plaintiffs fundamentally seek payment
for property damage arising from the use of a truck as a motor vehicle. This claim falls squarely
within the no-fault act. Plaintiffs cannot simply relabel their no-fault claim as one for unjust
enrichment to avoid the applicable statute of limitations. Cf. Citizens Ins Co of Am v Univ
Physician Group, 319 Mich App 642, 651-652; 902 NW2d 896 (2017). In any event, on the merits,
plaintiffs’ unjust-enrichment claim also fails.
The elements of a claim for unjust enrichment are (1) receipt of a benefit by the
defendant from the plaintiff, and (2) an inequity resulting to plaintiff from
defendant’s retention of the benefit. In such instances, the law operates to imply a
contract in order to prevent unjust enrichment. However, a contract will be implied
only if there is no express contract covering the same subject matter. [Bellevue
Ventures, Inc v Morang-Kelly Inv, Inc, 302 Mich App 59, 64; 836 NW2d 898
(2013).]
Typically, the rule that an implied contract will not be found when an express contract exists
applies when there is an express contract between the same parties on the same subject matter.
Morris Pumps, 273 Mich App at 194-195. The remedy for unjust enrichment is restitution to
restore “a party who yielded excessive and unjust benefits to his or her rightful position.” Wright
v Genesee Co, 504 Mich 410, 419; 934 NW2d 805 (2019).
In granting summary disposition to Fremont, the trial court found that there was an express
insurance contract governing the availability of no-fault benefits. However, even assuming that
the trial court erred by relying on the existence of an express contract as a basis for denying
plaintiffs’ unjust-enrichment claim, the trial court correctly recognized that plaintiffs’ claim failed
because they did not confer any benefit on Fremont. That is, plaintiffs wholly fail to identify any
benefit that Fremont received through any action by plaintiffs. If Fremont received any benefit, it
was the insurance premiums for the policy, which were paid by the Hibbitts defendants, not
plaintiffs. Cf. Karaus v Bank of New York Mellon, 300 Mich App 9, 23; 831 NW2d 897 (2012).
Plaintiffs, in comparison, conferred no benefit whatsoever on Fremont. At most, plaintiffs
generally contend that Fremont’s failure to pay benefits results in some inequity, but courts cannot
“create substantive rights under the guise of doing equity, or confer rights where none exists.”
Henry v Dow Chem Co, 473 Mich 63, 97; 701 NW2d 684 (2005) (quotation marks and citation
omitted). Equity alone does not provide support for plaintiffs’ unjust-enrichment claim in the
absence of a showing that plaintiffs conferred a benefit on Fremont. The trial court properly
dismissed plaintiffs’ claim for unjust enrichment.
IV. FREMONT’S CROSS-APPEAL
As noted, Fremont filed a cross-appeal in this Court, challenging the trial court’s denial of
Fremont’s motion to compel discovery of plaintiffs’ tax returns as relevant to the question of
plaintiffs’ damages. Fremont concedes that this issue is only relevant if we reverse the trial court’s
grant of summary disposition to Fremont. Having concluded that the trial court properly granted
summary disposition to Fremont, we find it unnecessary to address Fremont’s cross-appeal.
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Affirmed.
/s/ Stephen L. Borrello
/s/ Kathleen Jansen
/s/ Christopher M. Murray
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