Full opinion text
OPINION and ORDER PAUL L. MALONEY, Chief Judge. Granting in Part & Denying in Part Amerisure’s Motion for Summary Judgment; Granting in Part & Denying in Part Carey Transport’s Motion for Summary Judgment; Granting Adriatic’s Motion for Summary Judgment on Carey’s Third-Party Complaint; Terminating the Case This is a diversity insurance coverage dispute governed by Michigan state law. Plaintiff Amerisure Mutual Insurance Company (“Amerisure”) issued a commercial trucker’s insurance policy to defendant Carey Transportation, Inc. (“Carey”). Non-party February Fourteen, Inc. (“FFI”) hired Carey to transport goods to Florida. Carey did so in May 2005, using its own tractor to pull an attached trailer owned by FFI. A fire broke out which damaged Carey’s tractor, FFI’s attached trailer, and cargo inside the trailer. Defendant Great West Casualty Company (“Great West”) provided coverage to FFI. In early 2006, Great West (as subrogee of FFI) sued Carey in this court, Civil Case No. l:2006-ev-106 (“the underlying action”). Great West asserted claims for breach of contract, negligence, and strict liability under the federal statutory provision known as the Carmack Amendment. In early 2006, Amerisure sent a letter to Carey entitled “Reservation of Rights”, advising that it believed that policy exclusion number 6 precluded coverage, that it reserved its right and defenses, and that it would investigate further. Exclusion 6 (hereinafter the “care, custody or control” exclusion) excludes coverage for “‘property damage’ to or ‘covered pollution cost or expense’ involving property owned or transported by the ‘insured’ or in the ‘insured’s’ care, custody or control.” In November 2006, Amerisure sent a second letter to Carey entitled “Reservation of Rights”, this time advising that it believed policy exclusion number 2 and policy exclusion number 6 precluded coverage, and again reserving its rights and defenses and promising further investigation. Exclusion 2 (hereinafter “the contractual liability exclusion”) excludes coverage for liabilities “assumed in a contract or agreement that is an ‘insured contract’ [as defined elsewhere in the policy,] provided that the ‘bodily injury’ or ‘property damage’ occurs subsequent to the execution of the contract or agreement.” Exclusion 2 states that it admits two exceptions, which will be discussed below. About that same time, in late 2006, about six months after Great West v. Carey was instituted, Amerisure assumed Carey’s defense. That action was stayed pending resolution of the instant action. In this action, Amerisure asserts claims for declaratory relief under the federal Declaratory Judgment Act, and for restitution and unjust enrichment under Michigan common law. Amerisure seeks a declaration that it has no duty to indemnify Carey or Great West because the Amer-isure-Carey policy’s exclusions 2 and 6 each eliminate coverage for all types of damages sought in the underlying action. Amerisure also seeks a declaration that it has no duty to defend Carey in the underlying action, and that it is therefore entitled to recoup the expenses it has incurred defending Carey in the underlying action. Amerisure and Carey have cross-moved for summary judgment on the entire amended complaint. For the reasons that follow, the court will grant summary judgment to Amerisure. Carey first contends that Amerisure’s March 2006 letter to Carey, although entitled “Reservation of Rights”, constituted a final denial of coverage, and Carey was obbgated to raise all potential grounds for denial of coverage at that time. Therefore, Carey contends, Amerisure waived or is estopped from invoking Exclusion 2, because its March 2006 letter failed to mention it as a basis for denying coverage. The court rejects Carey’s arguments on this score: the court determines that Am-erisure’s March 2006 letter was not a final or conclusive denial of coverage and could not reasonably have been perceived as such. Therefore, Amerisure’s invocation of Exclusion 2 in its November 2006 letter was sufficient to permit Amerisure to rely on Exclusion 2 now as a basis for denying coverage. As a matter of law, the court also holds that, under these circumstances, the Michigan Supreme Court would adhere to the general rule announced in Ruddock (Mich.1920) that waiver or estoppel will not operate against an insurer where doing so would require coverage that is not-provided by the policy or is expressly excluded by the policy. Based on the Michigan Court of Appeals decisions in Lee (1995) and Smit (1995) and the decisions discussed therein, the Michigan Supreme Court might recognize the Lee-Smit exceptions to the Ruddock rule, but the exceptions would not apply here. As for Exclusion 6, the court determines that it is not so broad or ambiguous as to violate federal or Michigan public policy as suggested by Carey. Nor is exclusion 6’s phrase “care, custody or control” ambiguous so as to require a jury to decide, as a matter of fact, what Amerisure and Carey intended those words to mean. Rather, exclusion 6 is sufficiently clear that its interpretation is a question of law for the court, aided greatly by Arrigo’s (Mieh.App.l974)’s detailed explanation of what the phrase means and when it should be found to apply. The court then determines that Exclusion 6 applies and excludes coverage for all the damages at issue. The facts of this case satisfy both independent criteria for application of Exclusion 6. First, the tractor, the attached trailer, and the cargo were all being “transported” by the insured (Carey); the tractor is doubly excluded under the first part of Exclusion 6 because it was “owned” by the insured (Carey). Second, the tractor, the attached trailer, and the cargo were all within “the care, custody, or control” of the insured (Carey). The court next considers Exclusion 2, which excludes coverage for “liability assumed by the insured [(Carey) ] under any contract or agreement.” Exception “a” provides that Exclusion 2 does not apply to liability for damages that the insured (Carey) “[ajssumed in a contract or agreement that is an ‘insured contract’ [as defined elsewhere in the policy,] provided that the ‘bodily injury’ or ‘property damage’ occurs subsequent to the execution of the contract or agreement.” Exception “b” provides that Exclusion 2 does not apply to liability for damages “[t]hat the ‘insured’ would have in the absence of the contract or agreement.” The court determines that Exception 2 applies, as Great West’s complaint in the underlying action seeks to impose liability on Carey independent of any contract or agreement, namely liability for negligence under Michigan common law (count one in the underlying action) and strict liability under federal statute (count two in the underlying action). Because Exception “b” applies, Exclusion 2 does not apply. There is no need to determine whether Exception “a” might also apply. Finally, Carey contends that Amerisure has a duty to defend it in the underlying action. Following Michigan authority that the duty to defend is broader than the duty to indemnify, the court holds that Amerisure does have a duty to defend Carey in the underlying action. Background The Amerisure-Carey Policy and Carey’s Loss Amerisure issued a commercial automobile insurance policy # CA-1307-5620-30004, to Carey effective July 20, 2004 through July 20, 2005. See Am Comp ¶ 8 and Ex. G; Carey Ans ¶ 8; Great West Ans ¶ 8. In May 2005, FFI hired Carey to transport goods from Michigan to three Walgreen’s retail stores in Florida. Carey made the first two deliveries without incident. While Carey was transporting the remaining goods to the third and final destination, the vehicle’s front steer bearings failed, causing a fire that spread and destroyed Carey’s tractor (referred to in the policy as a “power unit”), FFI’s attached trailer, and FFI’s cargo were destroyed. Deposition of Carey truck driver Derek Fowler (“Fowler Dep”), P’s MSJ Ex D 74:20-25 and 75:1-10. Great West paid FFI $74,392.63 (the value of the entire cargo minus FFI’s deductible). See Amerisure MSJ, Ex (Deposition of Steven Carey (“Carey Dep”)) 86:2-7. (Carey has filed a third-party complaint contending that the cargo loss is covered by its policy with Adriatic, but Adriatic refuses coverage and has moved for summary judgment on the third-party complaint.) The Underlying Action: Great West (subrogee of FFI) v. Carey (Amerisure’s Insured) Great West, as subrogee of FFI, sued Carey in this court, alleging that the fire was caused by Carey’s negligent failure to maintain its tractor. See Am Comp., Ex. F (Great West’s Comp, filed Feb. 10, 2006 in underlying action) ¶¶ 7-15. Amerisure first learned of the underlying action — Great West v. Carey Transportation, No. 1:2006-cv-106 (W.D.Mich.) — on February 15, 2006, when it received a copy of the complaint from Great West. On March 10, 2006, Amerisure received another copy of the complaint in the underlying action, this time from its insured, Carey. On March 22, 2006, Amerisure received a letter advising that Great West had effected service on Carey in the underlying action. Amerisure’s First Letter to Carey Entitled “Reservation of Rights ”, March 2006 On March 22, 2006, Amerisure sent Carey a letter entitled “Reservation of Rights.” Amerisure’s letter read, in pertinent part, [Page 1, ¶ 3] Because information available to us at this point is limited, we will proceed to investigate this claim subject to a full reservation of all of our rights and defenses. [Page 1, ¶ 4] Amerisure’s conduct in handling this matter is subject to all of the terms, provisions and conditions of its policy. Your attention is specifically drawn to the following, which precludes coverage of this claim. [Page 3] B. Exclusions This insurance does not apply to any of the following: 6. Care, Custody Or Control “Property damage” to or “covered pollution cost or expense” involving property owned or transported by the “insured” or in the “insured’s” care, custody or control. But this exclusion does not apply to liability assumed under a sidetrack agreement. [Page 4] * * * The Plaintiff [Great Westj’s complaint alleges that the trailer owned by February Fourteen, Inc. [FFI] and its cargo was under the care, custody and control of Carey Transportation, Inc. Similarly, our investigation also has shown that the trailer and cargo were in Carey Transportation, Inc.’s care, custody and control. Therefore because of the above cited exclusion, there may not be coverage for this loss. We will complete our coverage review process!,] and should it be determined that the Amerisure policy provides coverage on any part or all of this complaint, Carey Transportation, Inc. will be reimbursed for any legal costs that are reasonable and necessary. [Page 5] Amerisure Insurance Company specifically reserves all rights and defenses under the policy and applicable law. Additionally, if information is subsequently discovered that would support additional defenses to coverage, Ameri-sure Insurance Company expressly reserves the right to supplement its coverage defenses. Amerisure’s Opp to Carey’s MSJ, Ex C (Letter of Mar. 22, 2006 from Amerisure counsel to Carey) at 1, 3, 4 and 5 (boldface in original, italics added). The court finds that this letter serves as an effective, timely reservation of rights, but not as a denial of coverage. The letter is not a clear, definitive, or final “denial” of coverage, and Carey could not reasonably perceive it as such. The letter is arguably internally inconsistent as to whether it is warning of the possible application of an exclusion or stating a firm position that an exclusion applies. Amerisure’s letter first says unequivocally that 'Tour attention is specifically drawn to the following, which precludes coverage of this claim,” see Page 1 ¶ 4 (emphasis added), going on to quote Exclusion 6, see Page 3. But then Ameri-sure backtracks, telling Carey on page 4, “[BJecause of the above cited exclusion, there may not be coverage for this loss.” Emphasis added. Amerisure’s March 22, 2006 reservation-of-rights letter also “strongly recommend[ed] that Carey Transportation, Inc. secure their own defense counsel at this time to provide a defense for Carey Transportation, Inc. in this lawsuit.” Ameri-sure’s Opp to Carey’s MSJ, Ex C (Letter of Mar. 22, 2006 from Amerisure counsel to Carey) at 4. Amerisure’s Second Letter to Carey Entitled “Reservation of Rights”, November 2006 Over half a year later, on November 13, 2006, Amerisure sent a second letter to Carey entitled Reservation of Rights. This letter for the first time called Carey’s attention to Exclusion 2 (certain liabilities contractually assumed by the insured), stating that it precludes coverage — a provision that Amerisure had not mentioned in the first reservation-of-rights letter. See Amerisure’s Opp to Carey’s MSJ, Ex D (Letter of Nov. 13, 2006 from Amerisure counsel to Carey) at 1 & 3. Amerisure’s November 2006 letter again called Carey’s attention to Exclusion 6 (property owned or transported by the Insured or in the “care, custody or control” of the Insured). This time, however, Amerisure stated only that its investigation found that the trailer was in Carey’s “care, custody, or control” — not, as stated in the first letter, “the trailer and cargo.” Contrast Amerisure’s Opp to Carey’s MSJ, Ex C at 4 with id., Ex D at 4. Amerisure agreed to defend Carey, but explained its revised position regarding coverage: [T]he cargo may not be covered because it was being “transported by” the insured when it was damaged. We will provide a defense for the entire action, however the only area where there is potential for indemnity is for the Cargo inside the [FFI] Trailer. It is our position that there is no coverage for the trailer owned by February Fourteen, Inc. because it was within your driver’s care, custody and control at the time of the loss. Finally, the breach of contract claims are not covered by the policy because they are excluded by the contractual exclusion. The allegations by [FFI] are not for tort claims, but for Carey Transportation’s failure to maintain its equipment. This does not fall within the definition of an insured contract and therefore, the contractual exclusion [Exclusion 2] applies. Amerisure’s Opp to Carey’s MSJ, Ex D (Nov. 13, 2006 letter from Amerisure to Carey) at 4. Amerisure Files this Declaratory Judgment Action Against Its Insured, Carey Amerisure filed the instant action in December 2006, seeking, inter alia, a declaration that it does not have a duty to defend or indemnify Carey in the underlying coverage action (count one). In counts two and three, Amerisure asserts Michigan common-law claims for restitution and relief from unjust enrichment. Amerisure alleges that any attorney fees and other defense costs that it has paid in the underlying coverage action have benefitted and unjustly enriched Carey, and thus that Carey should disgorge said amounts to Amerisure. See Comp. ¶¶ 15-21. Defendants Carey and Great West timely filed answers in March 2007. Carey’s answer counterclaimed for a declaration that Amerisure has a duty to defend and indemnify Carey in the underlying coverage action, and an order requiring Ameri-sure to pay Carey both the costs it has incurred in this action and the costs it has incurred in the underlying coverage action. See Carey Ans at 3-5. Great West’s answer sought a declaration that Amerisure has a duty to indemnify it for the damages sought by Great West in the underlying coverage action. See Great West Ans. at 4. In May 2007, with leave granted by Magistrate Judge Carmody, defendant Carey filed a third-party complaint against Adriatic Insurance Company, Inc. (“Adriatic”), which timely answered that same month. Between July and November 2007, three parties — plaintiff Amerisure, defendant Carey, and third-party-defendant Adriatic — filed motions for summary judgment [document numbers 36, 56 and 58]. However, the court determined that Amerisure had not satisfied its burden of pleading facts sufficient to establish federal jurisdiction. Accordingly, by order issued October 29, 2007, the court dismissed the complaint without prejudice and authorized Amerisure to file an amended complaint to correct the deficiency within a certain period of time. The order denied the pending motions without prejudice. On November 6, 2007, Amerisure timely filed an amended complaint. According to the amended complaint, plaintiff Ameri-sure is incorporated in Michigan and maintains its principal place of business in Michigan; defendant Carey is both incorporated in Florida and maintains its principal place of business there; and defendant Great West is both incorporated in Nebraska and maintains its principal place of business there. See Am, Comp, ¶¶ 4-6 (citing Exs. A-E). The defendants have either “admitted” or “not contested” Am-erisure’s revised citizenship allegations, see Carey’s Ans, to Am. Comp. ¶¶ 4-6 and Great West’s Ans, to Am, Comp. ¶¶4-6, and the court determines that Amerisure has met its burden of establishing complete diversity of citizenship. In November 2007, plaintiff Amerisure and defendant Carey cross-moved for summary judgment on the amended complaint [documents # 73 and # 75]. Defendants Great West and Carey filed separate opposition briefs [documents # 80 and # 83/84]; and Amerisure filed an opposition brief [document # 79] and two reply briefs [document # 82 and # 85]. Also in November 2007, third-party defendant Adriatic moved for summary judgment on Carey’s third-party complaint [document #70], which involves a cargo-insurance policy that Adriatic issued to Carey. Third-party plaintiffs Carey and Great West filed opposition briefs [documents # 72 and # 77], but Adriatric did not file a reply brief. Diversity Jurisdiction When sitting in diversity jurisdiction, this court must apply the choice-of-law rules and, if applicable, the substantive law of the forum State, Michigan. CenTra, Inc. v. Estrin, 538 F.3d 402, 409-10 (6th Cir.2008) (citing Himmel v. Ford Motor Co., 342 F.3d 593, 598 (6th Cir.2003)); see also Savedoff v. Access Group, Inc., 524 F.3d 754, 762 (6th Cir.2008) (“We generally apply the substantive law of the forum state to actions brought pursuant to our diversity jurisdiction.”) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). This rule applies in insurance-coverage actions brought in diversity. See Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 563 (6th Cir.2008) (citing Talley v. State Farm Fire & Cas. Co., 223 F.3d 323, 326 (6th Cir.2000)). When interpreting contracts in a diversity action, the federal courts also “generally enforce the parties’ contractual choice of governing law.” Savedoff, 524 F.3d at 762 (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 596, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991) and M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972)). As the parties do not dispute that the Amerisure-Carey policy is governed by Michigan substantive law, the court applies Michigan law to this dispute. See Savedoff, 524 F.3d at 762 (“As the parties do not dispute that the student loan contracts at issue are governed by Ohio law, we apply Ohio law to the parties’ contractual dispute.”). A Federal Court’s Application op State Law “ ‘In applying state law, we anticipate how the relevant state’s highest court would rule in the case and are bound by controlling decisions of that court.’ ” Appalachian Railcar Servs. v. Boatright Enters., Inc., 2008 WL 828112, *14 (W.D.Mich.2008) (Paul L. Maloney, J.) (“ARS ”) (quoting NUFIC of Pittsburgh, Pa. v. Alticor, Inc., 472 F.3d 436, 438 (6th Cir.2007) (Richard Allen Griffin, J.) (citation omitted)). If the state supreme court has not conclusively decided the issue, a federal court presumptively looks to the decisions of the state’s appellate courts: “In anticipating how the state supreme court would rule, ‘we look to the decisions of the state’s intermediate courts unless we are convinced that the state supreme court would decide the issue differently.’ ” ARS, 2008 WL 828112, at *14 (citing U.S. v. Lancaster, 501 F.3d 673, 679 n. 3 (6th Cir.2007) (Griffin, J.) (citation omitted)). In determining what is the controlling law of the State, a federal court also “may give weight” to the decisions of the State’s trial courts, Bradley v. GMC, 512 F.2d 602, 605 (6th Cir.1975) (citing Royal Indem. Co. v. Clingan, 364 F.2d 154 (6th Cir.1966)), especially when the trial court’s decision is consistent with state appellate decisions, Bradley, 512 F.2d at 605. Precedential Value op Michigan Decisions A federal court must accord the same precedential value to a state-court decision as it would be accorded by that state’s courts. See ARS, 2008 WL 828112, at *14 (citing Mutuelle Generate Francaise Vie v. Life Ass. Co. of Pa., 688 F.Supp. 386, 397 n. 15 (N.D.Ill.1988) (“[Ojne Supreme Court decision (Fidelity Union Trust Co. v. Field, 311 U.S. 169, 61 S.Ct. 176, 85 L.Ed. 109 ... (1940)) ... required a federal court to ascribe the same precedential force to a New Jersey trial court decision that such a decision would receive in that state’s court system under the peculiarities of New Jersey law.”)). If a state court would not be bound by a particular state-court decision, then neither is this court. ARS, 2008 WL 828112, at *14 (citing King v. Order of United Commercial Travelers of Am., 333 U.S. 153, 161, 68 S.Ct. 488, 92 L.Ed. 608 (1948) (“a federal court adjudicating a matter of state law in a diversity suit is, in effect, only another court of the State; it would be incongruous indeed to hold the federal court bound by a decision which would not be binding on any state court.”) (citation omitted)). MiCH. Ct. R. 7.215(C)(2) states that “[a] published decision of the Court of Appeals has precedential value under the rule of stare decisis.” This subsection makes no distinction based on when the decision was issued. ARS, 2008 WL 828112, at *14. However, Mica. Ct. R. 7.215(J)(1) provides that “[a] panel of the Court of Appeals must follow the rule of law established by a prior published decision of the Court of Appeals issued on or after November 1, 1990, that has not been reversed or modified by the Supreme Court or by a Special Panel of the Court of Appeals as provided in this rule.”. ARS, 2008 WL 828112, at *14 (emphasis added). Synthesizing Mioh. Ct. RR. 7.215(C)(2) and 7.215(J)(1), the Michigan Court of Appeals accords precedential value to all of its prior published decisions, regardless of when they were issued. ARS, 2008 WL 828112, at *14. When a post-November 1, 1990 published Court of Appeals decision conflicts with a pre-No-vember 1, 1990 published Court of Appeals decision, however, the posí-November 1, 1990 decision prevails. Id. When there is a conflict between two published decisions of the Court of Appeals that were both issued after November 1, 1990, Michigan courts follow the first opinion that addressed the matter. ARS, 2008 WL 828112, at *15 (citing Novak v. Nationwide Mut. Ins. Co., 235 Mich.App. 675, 599 N.W.2d 546, 554 (1999) (citation omitted)). By contrast, Michigan Court of Appeals panels are not bound by un published decisions of that same court, regardless of when they were issued. ARS, 2008 WL 828112, at *15 (citing Iqbal v. Bristol West Ins. Group, 278 Mich.App. 31, 748 N.W.2d 574, 582 n. 5 (2008) (citing Mich. Ct. R. 7.215(J)(1))). Nonetheless, this court may consider and follow unpublished state-court decisions, so long as they do not contradict published decisions of the Michigan Supreme Court or Michigan Court of Appeals. See Republic-Franklin Ins. Co. v. Bosse, 1996 WL 301722, *5 n. 4 (6th Cir. June 4, 1996) (although unpublished decisions are not generally controlling under Ohio law, “[w]e cite them, nevertheless, due to our sensitivity to state law in deciding diversity cases.”) (citing Royal Indem. Co., 364 F.2d at 154 (“Although we are not bound in a diversity case by an unreported decision of a State court of original jurisdiction, we may give weight to this [unreported] decision of the chancery [court] in determining what is the controlling [state] law.”)). Finally, a federal court’s interpretation of state law is not binding. ARS, 2008 WL 828112, at *14 (citing Leavitt v. Jane L., 518 U.S. 137, 146, 116 S.Ct. 2068, 135 L.Ed.2d 443 (1996) (Stevens, J., dissenting o.g., joined by Souter, Ginsburg, & Breyer, JJ.) (“[T]he decision of a federal court (even this Court) on a question of state law is not binding on state tribunals. ...”)). Accordingly, this court will seriously consider our Circuit’s interpretation of Michigan law but is not bound by it. See ARS, 2008 WL 828112, at *15. AMERISURE’S DUTY TO INDEMNIFY Interpretation of Insurance Policies under Michigan Law. “An insurance policy is much the same as any other contract. It is an agreement between the parties in which a court will determined what the agreement was and effectuate the intent of the parties.” Auto-Owners Ins. Co. v. Churchman, 440 Mich. 560, 489 N.W.2d 431, 433-34 (1992) (citing Eghotz v. Creech, 365 Mich. 527, 113 N.W.2d 815, 818 (1962)). Michigan courts read an insurance contract as a whole, giving meaning to all terms. Helsel v. Farm Bureau Gen. Ins. Co., 2008 WL 2357546, *2 (Mich.App. June 10, 2008) (p.c.) (citing Churchman, 489 N.W.2d at 434 (citing Fresard v. Michigan Millers Mut. Ins. Co., 414 Mich. 686, 327 N.W.2d 286, 288 (1982))). Any insurance policy clause is valid as long as it is clear, unambiguous, and not in contravention of public policy. Churchman, 489 N.W.2d at 434 (quoting Raska v. Farm Bureau Mut. Ins. Co. of Mich., 412 Mich. 355, 314 N.W.2d 440 (1982)). This rule stems from the fact that “freedom of contract is a much- and long-revered doctrine in American jurisprudence.” Fresard, 327 N.W.2d at 288. “The general rule is that competent persons shall have the utmost liberty of contacting and that their agreements voluntarily and fairly made shall be held valid and enforced by the courts.” Wilkie v. Auto-Owners Ins. Co., 469 Mich. 41, 664 N.W.2d 776, 787-87 (2003) (emphasis added) (citing Terrien v. Zwit, 467 Mich. 56, 648 N.W.2d 602, 611 (2002) (citing Twin City Pipe Line Co. v. Harding Glass Co., 283 U.S. 353, 356, 51 S.Ct. 476, 75 L.Ed. 1112 (1931) (Butler, J, for a unanimous Court))). Under this principle, parties are generally free to agree to whatever they like, and, in most circumstances, it is beyond the authority of the courts to interfere with their agreement. Wilkie v. Auto-Owners Ins. Co., 469 Mich. 41, 664 N.W.2d 776, 787 (2003) (citing St. Clair Intermed. Sch. Dist. v. Intermed. Ed. Ass’n, 458 Mich. 540, 581 N.W.2d 707 (1998)). If the contract’s language is clear, its interpretation is a question of law to be decided by the court. Helsel, 2008 WL 2357546 at *2 (citing Taylor v. Blue Cross & Blue Shield, 205 Mich.App. 644, 517 N.W.2d 864, 868 (1994)). The court cannot create ambiguity where none exists. Churchman, 489 N.W.2d at 434 (citing Edgar’s Warehouse, Inc. v. USF & G Co., 375 Mich. 598, 134 N.W.2d 746 (1965)). An insurance contract is clear and unambiguous if, “however inartfully worded or clumsily arranged, [it] fairly admits of but one interpretation.” Helsel, 2008 WL 2357546 at *2 (citing Farm Bureau Mut. Ins. Co. v. Nikkel, 460 Mich. 558, 596 N.W.2d 915, 919 (1999)). By contrast, an insurance contract is ambiguous “ ‘if, after reading the entire contract, its language reasonably could be understood in differing ways.’ ” Helsel, 2008 WL 2357546 at *2 (quoting Taylor, 517 N.W.2d at 868). If contractual language, such as Exclusion 6’s “custody, care, or control of the insured”, were ambiguous, the meaning of the ambiguous language would be a question of fact for the jury. GMC v. Auto. Servs., 2008 WL 3155965, *4 (Mich.App. Aug.7, 2008) (citing Klapp v. United Ins. Group Agency, Inc., 468 Mich. 459, 663 N.W.2d 447, 453-54 (2003) (citing Hewett Grocery Co. v. Biddle Purch. Co., 289 Mich. 225, 286 N.W. 221, 225 (1939))). As the Michigan Supreme Court has explained, Where a contract is to be construed by its terms alone, it is the duty of the court to interpret it; but where its meaning is obscure and its construction depends upon other and extrinsic facts in connection with what is written, the question of interpretation should be submitted to the jury, under proper instructions. Klapp, 668 N.W.2d at 454 (quoting O’Connor v. March Automatic Irrig. Co., 242 Mich. 204, 218 N.W. 784 (1928)). The jury would ascertain what the parties intended by interpreting the contract’s terms in light of the apparent purpose of the contract as a whole, the rules of construction, and extrinsic evidence of intent and meaning. Klapp, 663 N.W.2d at 454 (citing 11 WlLLISTON ON CONTRACTS (4th ed.) § 30:7, pp. 87-91). The jury would be allowed to consider extrinsic evidence as to the parties’ contemporaneous understanding of the agreement and its terms, including “the parties’ conduct, the statements of its representatives, and past practice to aid in interpretation.” Klapp, 663 N.W.2d at 454 (citing Penzien v. Dielectric Prods. Eng. Co., 374 Mich. 444, 132 N.W.2d 130, 132 (1965)). Michigan courts construe ambiguities against the insurer, Allstate Ins. Co. v. Vaughan, 2006 WL 3077514, *2 (Mich.App. Oct.31, 2006) (citing State Farm Mut. Auto. Ins. Co. v. Enterprise Leasing Co., 452 Mich. 25, 549 N.W.2d 345, 351 (1996)), app. denied, 480 Mich. 910, 739 N.W.2d 624 (2007), which means that [i]f a fair reading of the entire contract of insurance leads one to understand that there is coveragé under particular circumstances and another fair reading of it leads one to understand [that] there is no coverage under the same circumstances[,] the contract is ambiguous and should be construed against its drafter to provide coverage. Enterprise Leasing, 549 N.W.2d at 351 (quoting Raska, 314 N.W.2d at 440). Nonetheless, the Supreme Court cautions that “[t]he rule of contra proferentum is a rule of last resort because ‘[t]he primary-goal in the construction or interpretation of any contract is to honor the intent of the parties.’ ” Klapp, 663 N.W.2d at 456 (quoting Rasheed v. Chrysler Corp., 445 Mich. 109, 517 N.W.2d 19, 29 n. 28 (1994)) (citing, inter alia, Stine v. Continental Cas. Co., 419 Mich. 89, 349 N.W.2d 127, 137 (1984)). Moreover, Michigan courts strictly construe exclusions in favor of the insured. Vaughan, 2006 WL 3077514 at *2 (citing McKusick v. Travelers Indem. Co., 246 Mich.App. 329, 632 N.W.2d 525, 528 (2001)) (citing, inter alia, Fire Ins. Exchange v. Diehl, 450 Mich. 678, 545 N.W.2d 602, 606 (1996)). Nonetheless, the court must give effect to clear and specific exclusionary clauses, McKusick, 632 N.W.2d at 528, because “an insurer cannot be held liable for risks it did not contract to assume.” Farm Bureau Gen. Ins. Co. v. Duncan, 2008 WL 3540203, *1 (Mich.App. Aug.14, 2008) (p.c.) (P.J. Davis, JJ. Wilder & Borrello) (citing Klapp v. United Ins. Group Agency, Inc., 468 Mich. 459, 663 N.W.2d 447 (2003) and So. Macomb Disposal Auth. v. Am. Ins. Co., 225 Mich.App. 635, 572 N.W.2d 686, 695 (1997)). This comports with the general principle that “[rjespect for freedom entails that we enforce only those obligations actually assented to by the parties.” Coates v. Bastian Bros., Inc., 276 Mich.App. 498, 741 N.W.2d 539, 547 n. 7 (2007) (citing Evans v. Norris, 6 Mich. 369, 372 (Mich.1859)), app. denied, 480 Mich. 1193, 747 N.W.2d 545 (2008). At least one Court of Appeals panel called this “[pjerhaps the most fundamental rule of Michigan insurance jurisprudence ... that an insurer can never be held liable for a risk it did not assume and for which it did not charge or receive any premium.” Dunn v. Detroit Auto. Inter-Ins. Exchange, 254 Mich.App. 256, 657 N.W.2d 153, 159 (2002) (citing, inter alia, Ruddock v. Detroit Life Ins. Co., 209 Mich. 638, 177 N.W. 242, 248 (1920)). See, e.g., Matich v. Modern Research Corp., 430 Mich. 1, 420 N.W.2d 67, 75 (1988) (Robert P. Griffin, J.) (in context of prejudgment interest following judgment for the insured, “the insurer should be liable only for the interest that accrues on the amount of risk it has assumed. Otherwise, it would be paying interest on a risk it did not assume and for which it did not charge premiums.”) (citing Cosby v. Pool, 36 Mich.App. 571, 194 N.W.2d 142, 146 (1971)). Amerisure Concedes that there is Coverage, Before Considering the Exclusions To determine whether Amerisure is obligated to indemnify Carey or Great West, the court engages in a two-step analysis. First, the court must decide if the occurrence section of the Amerisure-Carey policy includes the particular occurrence; if so, the court must then decide if coverage is denied under one of the policy’s exclusions. Fire Ins. Exch. v. Diehl, 450 Mich. 678, 545 N.W.2d 602, 605 (1996) (citing Heniser v. Frankenmuth Mut. Ins., 449 Mich. 155, 534 N.W.2d 502, 510 (1995)). As the insured, it is Carey’s burden to show that the occurrence falls within the terms of the policy. Heniser, 534 N.W.2d at 510 (citing, inter alia, Arco Indus. Corp. v. Am. Motorists Ins. Co., 448 Mich. 395, 531 N.W.2d 168 (1995)). Exclusions do not come into play until and unless the insured first shows coverage under the policy’s more-general terms. See Heniser, 534 N.W.2d at 510 (“Policy exclusions are based on the assumption that the insured already has established that the policy covers the property in question.”). Here, Carey’s burden of proving pre-exelusion coverage is satisfied, because Amerisure concedes that the policy covers the loss if no exclusions apply. The main liability coverage provision of the Ameri-sure-Carey policy reads as follows, in pertinent part, SECTION II — LIABILITY COVERAGE A. Coverage We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of a covered “auto.” Amerisure’s MSJ Ex B. The court is obligated to follow the policy’s definitions, see Am. Axle & Mfg. Holdings, Inc. v. NUFIC of Pittsburgh, Pa., 2007 WL 4245408, *4 (Mich.App. Dec.4, 2007) (citing Cavalier Mfg. Co. v. Employers Ins. of Wausau, 222 Mich.App. 89, 564 N.W.2d 68, 70-71 (1997) (citing Allstate Ins. Co. v. Freeman, 432 Mich. 656, 443 N.W.2d 734, 739 (1989) (C.J. Riley, joined by J. Robert P. Griffin))), app. denied, 481 Mich. 868, 748 N.W.2d 568 (2008), and the policy defines the relevant terms as follows: A. “Accident” includes continuous or repeated exposure to the same conditions resulting in “bodily injury” or “property damage.” B. “Auto” means a land motor vehicle, “trailer” or semitrailer designed for travel on public roads but does not include “mobile equipment.” F. “Insured” means any person or organization qualifying as an insured the Who Is An Insured provision of the applicable coverage. Except with respect to the Limit of Insurance, the coverage afforded applies separately to each insured who is seeking coverage or against whom a claim or “suit” is brought. M. “Property damage” means damage to or loss of use of tangible property- 0.. “Trailer” includes [a] semitrailer or a dolly used to convert a semitrailer into a trailer. But for Trailer Interchange Coverage only, “trailer” also includes a container. Amerisure’s MSJ Ex B. Amerisure concedes that both the tractor and the attached trailer qualify as covered autos, see Amerisure’s MSJ at 7-8 with nn. 22 & 23 (citing Ex B’s Commercial Auto Coverage Part Truckers Coverage Form Declarations and Schedule of Autos), and Ameri-sure is silent as to whether the other conditions of coverage are met (prior to exclusions). Amerisure raises no question that Carey was an “Insured”; that the incident in which Carey sustained the loss was an “accident”; that the loss sustained by Carey (and paid for by Great West) in that accident constitutes “property damage.” The court determines that presumptive coverage is established, subject to the potential application of Exclusion 2 and/or Exclusion 6. Waiver & Estoppel Do Not Apply on the Ground of Inadequate Reservation of Rights: Amerisure Adequately Reserved Its Rights More Than Once, Giving Carey Notice of Potential Grounds for Denial of Coverage There are two grounds on which a Michigan court might consider estopping Amer-isure from denying coverage under these circumstances. First, M.C.L. § 500.2122(1) provides, in pertinent part, that “[a]n insurer or agent, upon making a declination of insurance, shall inform the applicant of each specific reason for the declination.” Applying this provision, Michigan courts hold that generally, once a company has denied coverage to an insured and stated its defenses, the insurance company has waived or is es-topped from asserting new defenses. Kirschner v. Process Design Assocs., Inc., 459 Mich. 587, 592 N.W.2d 707, 709 (1999) (citing, inter alia, Johnson v. Yorkshire Ins. Co., 224 Mich. 493, 195 N.W. 45, 46 (1923)). See, e.g., Blundy v. Secura Ins., 2008 WL 2596603, *2 (Mich.App. July 1, 2008) (“Defendant finally argues that Ja son was barred from obtaining no-fault benefits under MCL 500.3101 and 500.3113(b) because he failed to obtain a separate insurance policy. This issue has been waived because defendant’s correspondence attempting to void the policy did not set forth this reason.”) (citing Kirschner, 592 N.W.2d at 709). Carey contends that Amerisure’s March 2006 letter, denominated “reservation of rights”, was actually a denial of coverage, such that Amerisure could not later invoke any exclusion that- it did not mention in that letter. The court will reject Carey’s argument on this score below. Second, when a carrier undertakes the defense of its insured, it has a duty to give reasonable notice to the insured that it is proceeding under a reservation of rights, or it will be estopped from denying its liability. Kirschner, 592 N.W.2d at 709 (citing Meirthew v. Last, 376 Mich. 33, 135 N.W.2d 353, 356 (1965)) (footnote 3 omitted). The court finds that Amerisure’s March 2006 letter to Carey entitled “Reservation of Rights” — sent less than three months into Great West v. Carey, shortly after Amerisure was informed that Carey had been served in that action — constituted an adequate reservation of rights in terms of its substance. The court also finds that Amerisure sent the letter early enough, in relation to the underlying action, to avoid estoppel on this ground. “Since Meirthew [ (Mich.1965) ], this Court has held that a delay of four months between the initiation of the underlying action and the date that [the] insurer-sends the reservation-of-rights letter is, ‘as a matter of law, not an unreasonable length of time.’ ” Dale Osburn, Inc. v. Auto Owners Ins. Co., 2003 WL 22718194, *3 (Mich.App. Nov.18, 2003) (P.J. Whitbeck, JJ. Zahra & Donofrio) (“Auto Owners issued its reservation-of-rights letter ... less than four months after Dennis Claffey filed his lawsuit.... Thus, we conclude the letter was timely.”) (citing Fire Ins. Exch. v. Fox, 167 Mich.App. 710, 423 N.W.2d 325 (1988)); see also Allstate Ins. Co. v. Harris, 2001 WL 672596, *2 (Mich.App. Apr.24, 2001) (p.c.) (P.J. Smolenski, JJ. Holbrook & Gage) (reservation-of-rights letter sent “about five months after the complaint was filed in the underlying tort action” was timely); contrast Multi-States Transp., Inc. v. Michigan Mut. Ins. Co., 154 Mich.App. 549, 398 N.W.2d 462 (1986) (reservation-of-rights letter sent two years after start of underlying lawsuit was not timely). The court also finds that Amerisure’s November 2006 letter to Carey, likewise entitled “Reservation of Rights”, also independently serves as a timely and substantively-adequate reservation of rights sufficient to avoid estoppel on this ground. That, letter made clear that notwithstanding Amerisure’s offer to defend Carey, it was proceeding with its rights reserved, including the right to invoke Exclusions 2 and 6. See Kreindler v. Waldman, 2006 WL 859447, *2 (Mich.App.2006) (p.c.) (P.J. Owens, JJ. Kelly & Fort Hood) (“Although defendant initially agreed to defend Gold-stone, it did so under an explicit reservation of rights. Because defendant timely notified Goldstone that it was proceeding under a reservation of rights, it is not estopped from denying coverage.”) (citing Kirschner, 592 N.W.2d at 709). In any event, even if Amerisure’s March and November 2006 letters were not adequate reservations of its rights, its filing of the instant action in December 2006 was certainly an adequate reservation of rights. “A declaratory judgment action is a suitable alternative to sending the insured a reservation of rights letter.” Auto. Club Group Ins. Co. v. Rush, 2006 WL 171494, *5 (Mich.App. Jan.24, 2006) (citing Multi-States Transp., Inc. v. Michigan Mut. Ins. Co., 154 Mich.App. 549, 398 N.W.2d 462 (1986) (citing Security Ins. Co. of Hartford v. Daniels, 70 Mich.App. 100, 245 N.W.2d 418 (1976))). The fact that the underlying action was pending for some months before Ameri-sure filed this action does not establish undue prejudice to Carey, as would be required for a finding that the action came too late to serve as a reservation of rights in fairness to Carey. When Amerisure filed this action, the underlying action had not progressed far: Judge Enslen had not yet held the initial Case Management and Scheduling Conference, and no party had filed a dispositive motion, let alone started preparing for trial. Moreover, Judge En-slen stayed the action pending resolution of this action. Thus, before Carey has to decide whether to file a dispositive motion, settle, or go to trial in the underlying action, it will know the grounds on which Amerisure denied coverage, and it will know (due to the instant decision) whether Amerisure has a duty to indemnify and/or defend it. The Michigan Court of Appeals recently endorsed an insurer’s declaratory-judgment action as an adequate and timely reservation of rights in a similar situation. In Auto. Club Group Ins. Co. v. Rush, 2006 WL 171494 (Mich.App. Jan.24, 2006) (p.e.), the insured argued that he was unfairly prejudiced, and the insurer should be estopped from denying coverage, because the delay in filing a reservation of rights denied [the insured] Rush a fair and timely opportunity to settle with Leach and to conduct discovery in the underlying suit to avoid application of the exclusion and support a finding of coverage. Rush, 2006 WL 171494 at *4. The panel, P.J. Cavanagh and JJ. Hoekstra & Markey, rejected the insured’s argument, writing: In Meirthew [v. Last, 376 Mich. 33, 135 N.W.2d 353 (1965) ], the insurance company defended its insured; it did not give notice of an exclusion on which it intended to rely until it lost the principal lawsuit. [Meirthew, 135 N.W.2d at 354-55.] Our Supreme Court held that the insurance company’s failure to give reasonable notice of the exclusionary clause prejudiced the insured. [Meirthew, 135 N.W.2d at 356.] Unlike Meirthew, here, plaintiff brought its declaratory judgment action against Rush and defendant Leach before a trial in the [underlying] wrongful death suit, giving clear notice that it intended to deny coverage on the basis of the “recreational land motor vehicle” provision. * * * Thus, Meirthew is inapposite. Moreover, there is no evidence that the timing of plaintiff’s declaratory judgment action prejudiced either Rush or defendant Leach. The trial court repeatedly adjourned trial in the wrongful death suit during the pendency of this declaratory judgment action. The court also stayed indefinitely trial in the wrongful death suit pending the outcome of this appeal. Thus, Rush has been given ample time to negotiate an independent, pretrial settlement with defendant Leach. We find no basis to create [by estopping the insurer from denying coverage] a liability plaintiff never assumed in its contract with Rush. Rush, 2006 WL 171494 at *4-5 (emphasis and some paragraph breaks added). While not bound to follow this unpublished decision, the court finds it persuasive. Even if the Elements of Waiver/Estoppel Were Otherwise Present, Those Doctrines Cannot Prevent the Insurer from Invoking Exclusions 2 and 6 Under These Circumstances “The application of waiver and es-toppel is limited, and usually, the doctrines will not be applied to broaden the coverage of a policy to protect the insured against risks that were not included in the policy or that were expressly excluded from the policy.” Kirschner, 592 N.W.2d at 709-10 (citing Ruddock v. Detroit Life Ins. Co., 209 Mich. 638, 177 N.W. 242, 248 (1920); Lee v. Evergreen Regency Coop., 151 Mich.App. 281, 390 N.W.2d 183 (1986)). As Michigan’s Supreme Court explained long ago, The cases where the doctrine of waiver, or estoppel, has been applied have largely been cases where the insurance companies have relied on a forfeiture of the contract, upon breaches of the warranties and conditions to work such forfeitures; and in many such cases this court and other courts of last resort have held that if the companies have led the other party, to his prejudice, to his expense, to understand that such forfeitures, such breached of [sic] warranties and conditions, would not be insisted upon, then the companies would be estopped from asserting such defenses. But here defendant makes no claim of forfeiture of the contract; on the contrary, it is insisting on the contract itself, and insisting that by its terms it did not insure the deceased when engaged in military services in time of war. To apply the doctrine of estoppel and waiver here would make this contract of insurance cover a loss it never covered by its terms, to create a liability not created by the contract and never assumed by the defendant under the terms of the policy. In other words, by invoking the doctrine of estoppel and waiver it is sought to bring into existence a contract not made by the parties, to create a liability contrary to the express provisions of the contract they did make. We do not understand that the doctrine of waiver or estoppel goes that far. Af ter a loss accrues, an insurance company may, by its conduct, waive a forfeiture; or by some act before such loss it may induce the insured to do or not to do some act contrary to the stipulations of the policy, and thereby be estopped from setting up such violation as a forfeiture; but such conduct, though in conflict with the terms of the contract of insurance and with the knowledge of the insured and relied upon by him, will not have the effect to broaden out [sic] such contract so as to cover additional objects of insurance or causes of loss. Ruddock, 177 N.W. at 248 (internal citations omitted) (paragraph breaks added) (emphasis added). See, e.g., applying Ruddock to reject insured’s waiver/estoppel argument: City of Three Rivers, 292 Mich. 228, 290 N.W. 390, 391-92 (1940); Henne v. Glens Falls Ins. Co. of Glens Falls, NY, 245 Mich. 378, 222 N.W. 731 (1929); Wells v. Prudential Ins. Co. of America, 239 Mich. 92, 214 N.W. 308, 309 (1927) (citing Ruddock and Ames v. Auto Owners’ Ins. Co., 225 Mich. 44, 195 N.W. 686 (1923)). The Michigan Court of Appeals more recently explained the limited circumstances in which an insurer may be es-topped from invoking a contractual basis for denial of coverage: [Ejstoppel or waiver has been used in this state to defeat the insurer’s claim that the insured forfeited his policy for nonpayment of a premium. * * * Unlike Ruddock, this is not a case where the jury was being asked to create insurance where none existed or to extend the scope of the insurance coverage. Rather, this is a case dealing with: * * * the effect of the failure to pay the premium when due.... Allstate Ins. Co. v. Snarski, 174 Mich.App. 148, 435 N.W.2d 408, 411-12 (1988) (discussing Pastucha v. Roth, 290 Mich. 1, 287 N.W. 355 (1939) (citing, inter alia, Jones v. Preferred Bankers’ Life Ass. Co., 120 Mich. 211, 79 N.W. 204 (1899))). Nonetheless, some of Ruddock’s language can be read as holding, without qualification, that waiver and estoppel can never be applied against an insurer if the effect is to require coverage for a loss that was not covered or was subject to an exclusion. See Ruddock, 177 N.W. at 248 (stating unequivocally that conduct that ordinarily would give rise to waiver or estoppel against the insurer “will not have the effect to broaden out [sic] such contract so as to cover additional objects of insurance or causes of loss.”)- But a Michigan Supreme Court decision that cites Ruddock seems to leave the door open to the application of waiver or estoppel even where that would require the insurer to cover a loss that was expressly excluded by the .policy’s clear term: “usually, the doctrines will not be applied to broaden the coverage of a policy to protect the insured against risks that were not included in the policy or that were expressly excluded from the policy.” Kirschner, 592 N.W.2d at 709-10 (emphasis added) (citing Ruddock). Grosse Pointe Park (Michigan 2005) Revisits Ruddock (Michigan 1920) After Kirschner, an evenly split Michigan Supreme Court revisited the issue in City of Grosse Pointe Park v. Michigan Munic. Liab. & Prop. Pool, 473 Mich. 188, 702 N.W.2d 106, 117 n. 12 (2005) (“GPP ”), over 80 years after Ruddock. Because Justice Maura Corrigan did not participate, the seven-member Court had only six members voting. The opinion of the Court, delivered by Justice Cavanagh and joined by Justices Weaver & Kelly (“the Cavanagh opinion”), held that the insured failed to establish the elements needed to estop the insurer from invoking a particular exclusion. Then, in dictum, the Cav-anagh opinion went on to say that if the insured had established the elements of estoppel, the insurer might be estopped from invoking the exclusion, notwithstanding Ruddock's statement that estoppel can never be used to require (create) coverage which the policy excludes. First, this court notes the Cavanagh opinion’s explanation for its holding: The city maintains that the pool should be estopped from enforcing the pollution exclusion clause because of the pool’s practice of covering basement backup claims before, during, and after the underlying litigation in this case, without ever invoking the pollution exclusion clause. According to the city, the pool’s failure to enforce this clause, as well as the manner in which the pool conducted the defense, led the city to believe that the underlying litigation would be covered. The city maintains that were it not for this belief, it would have conducted discovery and settlement negotiations differently. Thus, the city contends that it was prejudiced by its reliance on its belief that coverage would be provided in the underlying suit. The Court of Appeals ... concludefd] that a question of fact remained [as to] whether the pool should be estopped from asserting the pollution exclusion clause. We disagree. Under the facts of this case, a reasonable trier of fact could not conclude that the city satisfied its burden. In this case, it cannot be said that the city’s reliance on the pool’s actions or representations was justified. At the beginning of the underlying litigation, the pool notified the city that it would provide a defense in the underlying litigation, “but will not pay any damages not covered by our contract. In legal terms, we are reserving our rights to restrict payments to those owed under the coverage contract.” The pool timely notified the city that if any judgment was entered against the city for the discharge of pollutants into Fox Creek, the pool was reserving the right to not indemnify, specifically quoting the pollution exclusion clause. We find the pool’s reservation of rights particularly damaging to the city’s estoppel theory. * * * [W]e fail to see how the city was justified in believing that indemnification would be provided in this particular case. “When an insurance company undertakes the defense of its insured, it has a duty to give reasonable notice to its insured that it is proceeding under a reservation of rights, or else the insurance company will be estopped from denying its liability.” Kirschner v. Process Design Assoc., Inc., 459 Mich.587, 592 N.W.2d 707 (1999). Here, the pool duly reserved its rights, and the city was aware of the reservation. Accordingly, the city was on notice that the pool might not indemnify it. Moreover, by the city’s own account, the pool had never before reserved its right to contest coverage under the auspices of the pollution exclusion clause. Yet the city claims that it was justified in believing that the pool would indemnity it [after taking the unprecedented step of reserving its right to refuse such coverage]. We believe, however, that these facts, [even] when viewed in the light most favorable to the city, weigh against a finding of estoppel. GPP, 702 N.W.2d at 116-117 (J. Cavanagh, joined by JJ. Weaver & Kelly) (last ¶ break added). The Cavanagh opinion went on to state that Ruddock could be read to permit es-toppel of an insurer in certain circumstances where the effect would be to require coverage contrary to the express terms of the policy: We disagree with Justice Young’s expansive reading of Kirschner [(Mich. 1999) ]. Relying on that decision, Justice Young posits that even if Grosse Pointe Park [the insured] could prove all the elements for the application of estoppel, the city would still be unprotected because estoppel can never be applied to extend coverage, period. In our view, Justice Young misreads Kirschner. Kirschner does not set forth the inflexible rule that Justice Young prefers. Indeed ... Kirschner ... was careful to avoid making sweeping generalizations or extending Ruddock ... beyond its intended bounds. Further, Kirschner ... prudently observed that in some instances, courts have applied the doctrine of estoppel to bring within coverage risks not covered by the policy. Kirschner then provided a few examples — examples that we believe are not exhaustive nor could reasonably be inferred to be exhaustive. Justice Young further laments that we do not give credence to the “prominent language” from Kirschner that emphasizes that “[t]he application of ... estop-pel is limited.” Post [702 N.W.2d at 126 n. 35], quoting Kirschner .... We respectfully disagree. Rather, we believe that our evenhanded reading of Kir-schner considers all of the opinion’s “prominent language.” For example, this Court observed that the “application of waiver and estoppel is limited, and, usually, the doctrines will not be applied to broaden the coverages of a policy....” Kirschner ... (emphasis added). GPP, 702 N.W.2d at 117 n. 12 (J. Cav-anagh for the Court, joined by JJ. Weaver & Kelly). Grosse Pointe Park (Michigan 2005) Lacks Precedential Force The Cavanagh opinion also made clear, however, that its interpretations of Kirschner (Mich.1999) and Ruddock (Mich.1920) on this issue were dictum: In any event, because [GPP]’s estoppel claim fails and the discharges fall under the purview of the pollution exclusion clause — as Justice Young likewise concludes — it is unnecessary to determine whether estoppel could be used to bring the discharges within coverage. In other words, because [GPP]’s estoppel claim fails, it is unnecessary to adopt Justice Young’s preferred rule, decide whether coverage in this case should be expanded, or depart from this Court’s prior precedent. GPP, 702 N.W.2d at 117 n. 12 (J. Cavanagh, joined by JJ. Weaver & Kelly). In Michigan, dictum issued by the lower courts is not binding. People v. Althoff, 280 Mich.App. 524, -N.W.2d-, 2008 WL 4057524 (2008) (“[Djictum is not binding on this court ....”) (citing Griswold Props., LLC v. Lexington Ins. Co., 276 Mich.App. 551, 741 N.W.2d 549, 553 (2007) (“[Statements concerning a principle of law not essential to the determination of the case are obiter dictum and lack the force of an adjudication.”) (citing, inter alia, Roberts v. Auto-Owners Ins. Co., 422 Mich. 594, 374 N.W.2d 905 (1985))). It appears that even dictum issued by the Michigan Supreme Court is not binding, where it consists merely of a passing remark or brief cursory discussion. See, e.g., Coppola v. Middlebelt Nursing Home, Inc., 2006 WL 2089150, *2 (Mich.App. July 27, 2006) (p.c.) (P.J. Hoekstra, JJ. Neff & Owens) (“Hence, the Supreme Court’s casual reference to the decedent’s date of death as the accrual date of the plaintiffs claim was merely dicta and was not binding.”) (citing Carr v. City of Lansing, 259 Mich.App. 376, 674 N.W.2d 168, 172 (2003)). Nonetheless, an ancient Michigan Supreme Court decision, still followed by the Court of Appeals, holds that when a court of last resort intentionally takes up, discusses and decides a question germane to, though not necessarily decisive of, the controversy, such decision is not a dictum but is a judicial act of the court which it will therefore recognize as a binding decision. Carr, 674 N.W.2d at 172 (quoting People v. Higuera, 244 Mich.App. 429, 625 N.W.2d 444, 449 (2001)) (quoting Detroit v. Michigan PUC, 288 Mich. 267, 286 N.W. 368, 379 (1939)). To put it another way, “[a] decision of the Supreme Court is authoritative with regard to any point decided if the Court’s opinion demonstrates ‘application of the judicial mind to the precise question adjudged, regardless of whether it was necessary to decide the question to decide the ease.’” Higuera, 625 N.W.2d at 449 (quoting People v. Bonoite, 112 Mich.App. 167, 315 N.W.2d 884, 886 (1982)) (emphasis added). The Cavanagh opinion in GPP certainly demonstrates “application of the judicial mind” to the interpretation of Ruddock (Mich.1920). Thus, if the Cavanagh opinion in GPP that opinion had garnered votes from four of the Court’s seven members, its detailed, considered treatment of Ruddock would probably be considered authoritative by Michigan’s lower courts. In any event, as noted in GPP itself, because the Cavanagh and Young opinions each garnered only three votes, with no opinion to break the tie, “neither establishes binding precedent.” GPP, 702 N.W.2d at 118 n. 1 (J. Young, joined by JJ. Taylor & Markman). “The clear rule in Michigan is that a majority of the Court must agree on a ground for decision in order to make that binding precedent for future cases. If there is merely a majority for a particular result ... the case is not authority beyond the immediate parties.” People v. Anderson, 389 Mich. 155, 205 N.W.2d 461, 466 (1973) (citing, inter alia, Kalamazoo v. Crawford, 154 Mich. 58, 117 N.W. 572 (1908)), overruled in part o.g. by People v. Hickman, 470 Mich. 602, 684 N.W.2d 267 (2004). This is a venerable proposition in Michigan. See People v. Regents of Univ. of Michigan, 18 Mich. 469, 1869 WL 3613, *8 (Mich. May 13, 1869) (“[W]e are disappointed by an equal division of opinion among the members of the Court. [T]his circumstance would deprive our opinion of all force as judicial authority....”). Accordingly, GPP is of limited assistance in predicting whether the Michigan Supreme Court would permit waiver or estoppel against an insurer to require coverage for an excluded item. This court must rely on that Court’s most-recent precedential statement on the subject, Kirschner (Mich.1999), and on published decisions of the Court of Appeals. Smit (Mich.App.1995) and Lee (Mich.App.1986) Explain When Post-Ruddock Cases Have Permitted Waiver/Estoppel to Require Coverage for an Excluded Loss In Smit v. State Farm Mut. Auto. Ins. Co., 207 Mich.App. 674, 525 N.W.2d 528 (1995) (P.J. Reilly, J. Taylor, and 14th Cir. J. Michael Kobza by designation), the Court of Appeals remarked, The limitation on the application of waiver and estoppel discussed in Ruddock has not been applied without exception. In Lee, this Court identified two classes of cases decided sin