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Citizens Insurance Co. v. Amerisure Insurance Co.11/29/2005
UNPUBLISHED
Before: Jansen, P.J., and Cavanagh and Fort Hood, JJ.
Plaintiff appeals by leave granted the trial court's order granting defendant's motion for summary disposition pursuant to MCR 2.116(C)(7). We affirm.
Defendant's insured, Scott Equipment Company (Scott), is a subsidiary of Elopak-Scott, L.L.C. (Elopak-Scott), which is a subsidiary of plaintiff's insured, Elopak, Inc. (Elopak). Elopak-Scott hired a controller who embezzled funds from Scott. Both Scott and Elopak filed claims of loss with their respective insurers. Defendant denied coverage on the ground that the controller was not Scott's employee within the meaning of its policy. Although plaintiff maintained that it was obligated to cover only a pro-rata share of the entire loss, it fully compensated Elopak for the loss, and then brought this action against defendant, as subrogee of Elopak, to recover defendant's alleged pro-rata share. Defendant moved for summary disposition, arguing that plaintiff's suit was filed after the expiration of the two-year contractual limitations period in defendant's policy. The trial court agreed and granted the motion.
This Court reviews de novo a trial court's decision on a motion for summary disposition. Veenstra v Washtenaw Country Club, 466 Mich 155, 159; 645 NW2d 643 (2002). Although the trial court granted summary disposition under MCR 2.116(C)(7), that subrule applies only to statutory limitation periods, not contractual limitation periods. Where a trial court grants summary disposition under the wrong subrule, this Court may review the issue under the correct subrule, in this case MCR 2.116(C)(10) (no genuine issue of material fact). Computer Network, Inc v AM General Corp, 265 Mich App 309, 313; 696 NW2d 49 (2005). A motion under MCR 2.116(C)(10) tests the factual sufficiency of the complaint. Kraft v Detroit Entertainment, LLC, 261 Mich App 534, 539; 683 NW2d 200 (2004). Summary disposition should be granted if there is no genuine issue of any material fact and the moving party is entitled to judgment or partial judgment as a matter of law. Id. at 540; MCR 2.116(C)(10) and (G)(4).
Plaintiff generally argues that its action states an independent claim against defendant for contribution or subrogation and, therefore, is governed by the six-year limitations period in MCL 600.5807(8), not the two-year contractual limitation period. Michigan law recognizes that contribution actions between insurers are predicated on the theory of equitable subrogation. Frankenmuth Mut Ins Co, Inc v Continental Ins Co, 450 Mich 429, 440 (Cavanagh, J., concurring), 446 (Levin, J., dissenting); 537 NW2d 879 (1995); Commercial Union Ins Co v. Medical Protective Co, 426 Mich 109, 119; 393 NW2d 479 (1986). The common-law doctrine of contribution enables an insurer who has paid an insured's entire loss to obtain another insurer's pro-rata share of the loss. Arco Industries Corp v American Motorists Ins Co, 232 Mich App 146, 160-161; 594 NW2d 61 (1998); Keene Corp v Ins Co of North America, 215 US App DC 156; 667 F2d 1034 (1981). In doing so, the paying insurer becomes subrogated to the insured's right to coverage from the non-paying insurer. Our Supreme Court has explained that
quitable subrogation is a legal fiction through which a person who pays a debt for which another is primarily responsible is substituted or subrogated to all the rights and remedies of the other. It is well-established that the subrogee acquires no greater rights than those possessed by the subrogor, and that the subrogee may not be a "mere volunteer." [Auto-Owners Ins Co v Amoco Production Co, 468 Mich 53, 59; 658 NW2d 460 (2003), quoting Commercial Union Ins Co, supra at 117 (opini
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