Negligence & misrepresentation claims against an insurance agency; Causation; Ray v Swager; Skinner v Square D Co; Distinguishing “duty to defend” cases; Distinction between fraud or misrepresentation & a broken promise; Reasonable reliance; Ottawa Kent Insurance Agency (OKIA)

The court held that plaintiff-Hoekstra’s negligence claim against defendant-insurance agency (OKIA) failed for lack of adequate evidence as to causation and that his misrepresentation claim failed as a matter of law. Thus, it affirmed summary disposition for OKIA. The case arose from OKIA’s “alleged failure to follow Hoekstra’s directive to procure an insurance policy covering, along with a condominium in Michigan, a mobile home located in Florida. OKIA, an independent insurance agency, did secure a homeowner’s policy for Hoekstra on the” condo but did not make sure it “also included liability coverage on the Florida property.” After Hoekstra’s sister-in-law (J) fell and broke her hip during a stay at the Florida property, she obtained a default judgment against him (he intentionally did not file an answer to her complaint). He “then filed this action against OKIA to recover monies that he owed under the default judgment[.]” The court concluded “that in the context of the particular circumstances of this case and the damages claimed by Hoekstra, factual or ‘but for’ causation required proof of an actual substantive determination that [he] was liable in the premises liability suit or, arguably, evidence that demonstrated more likely than not that [J] would have succeeded in her suit had it gone to trial.” The court noted that “there was no actual or true substantive determination of liability. Hoekstra was not free to simply do nothing and allow the default judgment to enter just because his brother told him to do so and then turn around and try to recover the amount of the judgment from OKIA on the basis that OKIA’s negligence caused the entry of the default judgment and Hoekstra’s damages.” Further, to the extent the court had to “speculate to properly resolve this case, we find as a matter of law that [J’s] lawsuit was untenable and would likely have failed had a defense been presented.” Specifically, it concluded “summary disposition would have been justified in [J’s] action on the basis of the open and obvious danger doctrine, as it existed at the time of the lawsuit, and the fact that [she] had actual knowledge of the alleged hazard[.]” As to misrepresentation, the court’s “ruling on causation relative to the negligence claim” equally applied to this claim. The court added that this “was not a case of fraud; at most, Hoekstra merely showed a broken promise.”