Citizens Ins. Co. of Am. v. Livingston Cnty. Road
Comm'n
No. 164951, --- N.W.3d ---, 2024 WL 1979983 (Mich. May 3, 2024)
The Michigan Supreme Court reversed the Michigan Court of Appeals and held that the parties did not have a binding settlement agreement for a pollution coverage dispute.
The Livingston County Road Commission (Road Commission) was involved in an insurance coverage dispute with three of its insurers, Citizens Insurance Company of America, Amerisure Mutual Insurance Company and Auto-Owners Insurance Company (Insurers). The parties attended a pre-suit mediation to try to avoid litigation over the insurers' refusal to defend the Road Commission in an environmental contamination lawsuit. The parties reached an agreement but that agreement required approval by a county commission. The Insurers sued the Road Commission in an attempt to enforce the parties' pre-suit settlement or in the alternative to allow further discovery on the issue.
The Insurers argued that the settlement agreement was binding because the Road Commission gave its lawyer pre-approval to settle the matter in a closed-door meeting in advance of the mediation. The Road Commission, on the other hand, argued that the series of emails that the Insurers relied upon did not establish that the Road Commission had unequivocally accepted the settlement agreement because the emails established that the settlement had to be presented to the Road Commission board for approval and signature. The Road Commission also argued that, as a public body, it is subject to the Michigan Open Meetings Act, and therefore, it could not approve the settlement agreement in a closed-door meeting.
The Michigan Supreme Court held that the parties did not have an enforceable settlement agreement. The Supreme Court noted that while it was clear that the parties reached a deal, their deal was conditional on the Road Commission board's approval and the board never ratified the settlement in a public meeting. As noted by one Justice, "[t]he board's decisions are not binding when made behind closed doors." The matter was remanded to the trial court for entry of an order granting the Road Commission's dispositive motion.
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