Contract dispute; Contract interpretation; Latent ambiguity; City of Grosse Pointe Park v Michigan Mun Liab & Prop Pool; Use of extrinsic evidence to show that a latent ambiguity exists; Shay v Aldrich; Distinguishing Teachworth v Citizens Ins Co of Am (Unpub)

Holding that the insurance “contract in question does not obligate defendant[-insurer] to buy a new van that is modified to accommodate plaintiff’s wheelchair,” the court reversed and remanded “for entry of judgment in defendant’s favor.” Plaintiff was seriously injured in an auto accident in 1973, and has since driven a modified van. In 2018, defendant refused to purchase a third modified van for her. After her second van was stolen in 2021, she sued defendant claiming its failure to purchase the third van breached certain contracts, and that it unlawfully failed to pay certain PIP benefits. The trial court ruled in favor of plaintiff, finding the parties’ 2012 agreement required that it purchase another new van for her. On appeal, the court agreed with defendant that the trial court’s ruling was erroneous. First, its “framing of the purported ambiguity as ‘latent’ was error.” There was “no latent ambiguity in the contract, and the appropriate inquiry is whether the agreement is patently ambiguous, or ambiguous on its face.” It was not. “Viewing the provisions of the agreement as a whole, the parties contemplated that defendant, or even plaintiff, might buy another van. But nothing in the agreement could be read as obligating defendant to do so. Moreover, defendant disclaimed any liability to plaintiff.” Because the “contract terms are clear, we must enforce them as written.” In sum, “the trial court erred by finding an ambiguity in the contract, whether framed as latent or patent. The agreement by its plain terms is silent as to defendant’s obligation to buy another van, which means that it has no obligation under the agreement to do so.”