CCC's Renewed Motion for Summary Judgment
In Continental Cas. II, this court denied CCC's motion for summary judgment on Counts 3-4 of its Second Amended Complaint. While CCC was able to make out a prima facie case that Great American breached its insurance contract with Levy, and that CCC could recover for breach of contract as Levy's subrogee, the court determined that Great American had raised a genuine issue of material fact as to whether CCC had waived its contractual claims under Michigan law. The court pointed out, however, that in order for Great American to establish estoppel of CCC by waiver, Great American would have to show detrimental reliance on CCC's conduct. The court ordered Great American to submit evidence showing such detrimental reliance. See Continental Cas. II, 732 F. Supp. at 933 & n. 2.
Before turning to the evidence which Great American has submitted in support of its estoppel argument, the court must acknowledge error in its characterization of Great American's remaining defenses against CCC. Great American has not asserted "estoppel by waiver"; rather, Great American has asserted separate defenses of waiver and estoppel. The defenses are distinct under Michigan law. See Commercial Union Ins. v. Medical Protective, 136 Mich.App. 412, 356 N.W.2d 648, 652-53 (1984) (treating defenses separately), aff'd in pertinent part, 426 Mich. 109, 393 N.W.2d 479 (1986). See also 28 Am.Jur.2d Estoppel and Waiver § 30 (1966) (discussing distinction). To establish waiver of a right, one must demonstrate that the person alleged to have done so has intentionally and knowingly relinquished it. See Medical Protective, 356 N.W.2d at 653. The party which claims waiver need not show that it relied on the waiver to its detriment. See 28 Am.Jur.2d Estoppel and Waiver § 30. By contrast, "to justify the application of estoppel, one must establish that there has been a false representation or concealment of material fact, coupled with an expectation that the other party will rely upon this conduct, and knowledge of the actual facts on the part of the representing or concealing party." Lothian v. City of Detroit, 414 Mich. 160, 324 N.W.2d 9, 18 (1982). The party claiming estoppel also must show that he or she lacked knowledge of the truth or means of learning it, and actually relied on the other party's conduct to his or her detriment. See Cudahy Bros. Co. v. West Michigan Dock & Market Corp., 285 Mich. 18, 280 N.W. 93 (1938); National Bank of Rochester v. Meadowbrook Heights, Inc., 80 Mich. App. 777, 265 N.W.2d 43 (1978); Starboard Tack Corp. v. Meister, 103 Mich. App. 557, 303 N.W.2d 38 (1981); see generally 28 Am.Jur.2d Estoppel and Waiver § 35.
Applying this law to this case, it is clear that regardless of its ability to show detrimental reliance, Great American has raised a valid defense of waiver that must be tried. The court thus must deny CCC's renewed motion for summary judgment on Counts 3-4 of its Second Amended Complaint.
Since this case will go to trial, the court believes that it is proper to consider whether Great American also has raised a valid defense of estoppel under Michigan law. In accordance with the court's direction, Great American has submitted an affidavit from its Corporate Claims Counsel, James Danehy, that CCC never advised Great American before 1986 of its claim that Great American owed Levy two coverages instead of one. Danehy swears further that had CCC so advised Great American of the double coverages, Great American would have settled Ford Motor Company's suit against Levy sooner, and avoided the present litigation altogether. Great American also has tendered an affidavit from Joseph P. Aubin, formerly a regional claims manager for Great American. Aubin testifies that he set Great American's reserves in mid-1984 at $ 750,000, presumably in reliance on CCC's failure to put Great American's liability to Levy at an amount higher than $ 1 million. Aubin also states that prior to February 1984, he could not get CCC to describe its position in the Ford v. Levy lawsuit.
These facts do not make out a defense of estoppel under Michigan law.
First, Great American has put forth no evidence that CCC misled Great American about facts. At worst, CCC reinterpreted Great American's insurance contract, but an interpretation of a contract is an opinion, not a fact. Second, even if an interpretation were a fact, during the time when CCC manifested a different interpretation of Great American's policy than it has now, Great American had the means of interpreting its own policy. It is undisputed that Great American drafted its policy and had lawyers who were able to interpret that language. While Great American may have a right to have counted on CCC's waiver of its right to assert a different interpretation of Great American's policy, Great American may not assert that it justifiably relied on the prior interpretation itself.
The court denies Great American's motion to reconsider its order of April 27, 1989. The court denies CCC's renewed motion for summary judgment on Counts 3-4 of the Second Amended Complaint.