Statutory penalty interest; Distinguishing Hurt v Depositors Ins Co (Unpub); Griswold Props, LLC v Lexington Ins Co (Griswold I); MCL 500.2006(3) & (4); “Satisfactory proof of loss”; Withheld depreciation claim; Motion to amend a complaint; Futility

The court reversed the trial court’s decision granting plaintiff-MemberSelect’s summary disposition motion and ruling that it did not owe defendants-the Yonos “penalty interest on the basis of the Yonos’ failure to submit a satisfactory proof of loss, solely relying on” the court’s decision in Hurt, and remanded. It affirmed in all other respects. The court held that Hurt was distinguishable from this case. The Yonos contended “that, instead of relying upon Hurt, the trial court should have applied the reasoning of” the court’s published decision, Griswold. MemberSelect argued that Griswold was distinguishable. While the facts here “do not precisely mirror Griswold, this Court’s interpretation of the penalty interest statute in Griswold provides guidance in the present matter.” The issue was “whether a question of fact exists as to whether the proof of loss submitted by the Yonos was satisfactory, such that MemberSelect was required to issue payment within 60 days pursuant to MCL 500.2006(4), and what amount of penalty interest is owed, if any, pursuant to the statute.” The court held that there “are no exceptions contained in subpart (4) indicating situations in which such penalty interest is not owed, including the exception argued by MemberSelect.” It found that the “Yonos’ obligation to provide sworn proof of loss within the initial 60-day period was limited to the information requested in [¶] four of the policy. Although they may have been required to provide additional information to trigger payment of the claim under MCL 500.2006, the Yonos were not required to provide any additional information to comply with” ¶ four. MemberSelect’s claim also conflated “the requirements of ‘satisfactory proof of loss’ under MCL 500.2006” with ¶ four. The court concluded that considering the record, “the issue of whether the Yonos presented MemberSelect with satisfactory proof of loss, more than 60 days prior to the payments made by MemberSelect in 2022, pursuant to MCL 500.2006(4), is a question of fact. Likewise, in the event that the jury decides that question in the Yonos’ favor, then the amount of penalty interest owed by MemberSelect is also a question of fact to be decided by the jury.” But it held that the “trial court did not err by granting MemberSelect summary disposition of the Yonos’ claim for withheld depreciation after the Yonos acquired another house because the claim lacks a legal basis.” Finally, the “trial court did not abuse its discretion by declining to address the new argument regarding the counterclaim amendment because, by failing to raise the issue until moving for reconsideration, the Yonos did not properly present it to the court. Regardless any amendment to the complaint would be futile.”