During litigation, Morse died and her estate substituted as plaintiff. The matter proceeded to trial against Titan only, with the sole question submitted to the jury being when the insurance policy issued by Titan went into effect.

The jury determined the liability policy issued by Titan went into effect on Nov. 19, 2004. The trial court entered a judgment in favor of the plaintiff and against Titan, reforming the insurance contract nunc pro tunc to make Nov. 19, 2004, the effective coverage date. The parties agreed to waive jury trial on the issue of damages and allow the court to enter a final judgment based upon the plaintiff's offers of proof. The judgment was entered on April 2, 2012, in the plaintiff's favor for $1,154,244.43.

Michigan courts can reform a contract that does not express the true intent of the parties as a result of fraud, mistake, accident or surprise, but reformation will generally not be granted for a mistake of law. Reformation is only appropriate if the evidence of the mistake is so clear as to establish the fact beyond trivial objections. The burden of proof is upon the party seeking reformation.

The policy was between Titan and Morse. Titan had no contact with Morse, so would have no reason to intend that the policy become effective on any other date. There is thus no mutual mistake between the two parties named in the contract.

A duly authorized agent has the power to act and bind the principal as if the principal acted. To establish that a mutual mistake was possible, the plaintiff must first determine that Adrian was the agent of both the plaintiff (the insured) and the insurer (Titan).

The appellate court concluded Adrian was the agent for plaintiff, not Titan, in submitting the application for insurance. The judgment was reversed and Titan owed nothing. Adrian, the agent for the plaintiff, wisely settled to avoid trial on its alleged error to acquire insurance effective on the date the premium was paid.

Case Notes

During the course of the litigation, Charlotte Morse settled her claim with Adrian Ins. Agency, and summary disposition was granted in favor of Auto Owners based upon the trial court finding that because no insurance existed on the Taurus at the time of the accident, Morse was not entitled to personal injury protection benefits due to an exclusion in Auto Owner's policies and under relevant statutory provisions.