One Court of Justice

In Tienda v Integon National Insurance Co, the Michigan Court of Appeals held that a migrant worker was a Michigan resident for the purpose of the No Fault Act because the migrant worker maintained no other residence when he lived in Michigan, and he took all his worldly possessions with him when he traveled from state to state.  In this case, the migrant worker lived in three different states where he picked fruit on a seasonal basis.  At the time of the accident, the migrant worker was living and working in Michigan, and did not have any other state which he called home.  The mere fact that the worker spent a longer period of time in Florida each year, due to the length of the picking seasons, did not make Florida his domicile.  The Court reasoned that a person does not need to maintain a residence for any particular length of time in order to establish domicile.

In McPherson v. McPherson, the Michigan Supreme Court reversed the Court of Appeals and held that injuries suffered in a car accident after the driver suffered a seizure did not, for the purpose of Michigan’s no-fault insurance act, “arise out of” a prior accident that had caused the driver’s seizure disorder.  Therefore, the insurance company was not liable for injuries resulting from the second accident on the basis of the first accident. Read more »

In Michigan Head & Spine Institute, PC v. State Farm Mutual Automobile Insurance Co., the Court of Appeals concluded that an insured’s release of all claims “by or on behalf of” the insured barred future first-party medical claims asserted by the insured’s healthcare providers.  Motorist Pellumbesha Biba, an insured of Defendant State Farm, was injured in an automobile accident.  In exchange for $35,000, she executed a release of all claims including those asserted on her behalf.  After executing the release, Ms. Biba began treatment with Michigan Head & Spine Institute.  Michigan Head & Spine sought reimbursement from State Farm, which denied payment based on the release.  The district and circuit courts held that Michigan Head & Spine had a separate cause of action.  The Court of Appeals disagreed, relying on the broad language in the release.  The Court noted that Michigan Head & Spine had a cause of action against Ms. Biba, and that upholding the lower court decisions would have a chilling effect on future no-fault settlements of claims.

An individual injured in an automobile accident, which left him unable to drive, hired a transportation service to take him to medical appointments and to take him on personal errands.  The fees associated with this transportation service included wait time charges and minimum mileage charges (i.e. a charge for 20 miles for a round trip, even if the round trip was less than 20 miles).  In ZCD Transportation Inc. v. State Farm Mut. Auto. Ins. Co., the Court of Appeals held that the transportation charges for personal trips were not an allowable expense under the No-Fault Act as they were related to maintaining the injured individual’s quality of life and were not necessary for that person’s care, recovery or rehabilitation.   Additionally, the court concluded that while actual mileage charges and wait time charges associated with transportation to the individual’s medical appointments were recoverable under that standard, the portion of the “minimum” mileage fee associated with miles that were not actually driven were not recoverable, as it sought payment for services that were not actually rendered.

In Hannay v Department of Transportation, an employee of the Department of Transportation failed to obey a stop sign and hit Heather Lynn Hannay.  Hannay was seriously injured and sued the Department.  Hannay sought damages for lost wages and service expenses allowed by the No-Fault Act. The Department argued that the Government Tort Liability Act (“GTLA”) barred Hannay from recovering such damages, because the GTLA only permits plaintiffs to recover damages for “bodily injury” or “property damage.”  The Court of Appeals disagreed and affirmed the trial court’s ruling that such damages were allowed. The Court held that the lost-wages and service damages that Hannay sought were a species of damages recoverable because of bodily injury, and so were permitted by the GTLA.  The Court also upheld the trial court’s factual finding regarding the amount of Hannay’s lost wages.

 In Gray v Chrostowski, the Michigan Court of Appeals held that a motorist’s failure to carry no-fault insurance does not prevent him from seeking non-economic damages arising out of an intentional tort.  There, the uninsured plaintiff alleged that the defendant swerved into her vehicle in a fit of road rage, and she filed intentional-tort claims against the defendant for non-economic damages.  The court held that the plain language of MCL 500.3135(3)(a) provides a clear exception to the No-Fault Acts general abrogation of tort law for intentional-tort claims.  It states, “Notwithstanding any other provision of law, tort liability . . . is abolished except as to: (a) intentionally caused harm to persons and property . . . .”  

Under Section 3107(1)(b) of the No-Fault Act, insurers are liable for benefits consisting of “the loss of income from work.”  In Brown v. Home Owners Insurance Company, the Michigan Court of Appeals held that the profits generated by an S corporation should be included when calculating the work loss benefits payable under that section, MCL § 500.3107(1)(b).

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In Bronson Methodist Hospital v Michigan Assigned Claims Facility, the Michigan Court of Appeals upheld a no-fault insurer’s denial of PIP coverage to an injured registered owner of a vehicle who was also an excluded driver under the insurance policy.  The court applied the plain language of the insurance policy’s “named driver exclusion endorsement” and the no-fault statute, and found that the excluded driver’s “act of driving the insured vehicle at the time of the accident rendered the vehicle uninsured.”  Relying on Iqbal v Bristol West Ins Group, Plaintiff argued that a vehicle owner is covered by a no-fault policy even when, as here, someone else insures the vehicle.  The Court of appeals distinguished Iqbal on grounds that the vehicle owner in that case was not an excluded driver.  The Court affirmed the trial court’s grant of summary disposition in favor of the insurer and the Michigan Assigned Claims Facility (MACF).

A friend gave permission to the plaintiff in Rambin v. Allstate Ins. Co., to drive a motorcycle, which the friend claimed he owned.  Unbeknownst to the plaintiff, the friend had stolen the motorcycle.  The plaintiff was injured in an accident while driving the motorcycle, and he sued for personal protection insurance benefits under the No-Fault Act.  The trial court granted summary disposition to the insurance companies, and the plaintiff appealed.  The Michigan Court of Appeals considered MCL 500.3113(a), which denies PIP benefits to a person who “was using a motor vehicle or motorcycle which he or she had taken unlawfully . . . .”  The court concluded, in light of recent Michigan Supreme Court precedent, that this clause required the person to have actually taken the vehicle in violation of the Michigan Penal Code.  Therefore, the plaintiff was not precluded from receiving benefits, because he did not take the motorcycle unlawfully.  The court reversed the trial court’s grant of summary disposition, but noted that whether the plaintiff is entitled to PIP benefits, and if so, from whom, remained issues for the trial court to decide.  Judge Krause concurred in the result, but dissented to note disagreement with the court’s lengthy analysis of prior case law, which she said is “unnecessary” and at best, “dicta.”

In a consolidated opinion, the Michigan Supreme Court held that drivers who are injured while driving a vehicle that they were explicitly forbidden to drive are deemed to have “taken [that vehicle] unlawfully” and thus are not entitled to PIP benefits under the plain language of the No Fault Act.  In reaching this decision, the Supreme Court decided that a person who violated the Michigan joyriding statute by taking a vehicle they have been forbidden to drive (by the owner) has taken that vehicle “unlawfully” even if there was no intent to steal.  The Court also held that the rule extends to family members of the vehicle’s owner.  In reaching these determinations, the Supreme Court overruled the application appellate court authority that had adopted a “chain of permissive use theory” that had allowed PIP benefits where a vehicle’s owner gave a third party permission to use the vehicle, and that third party in turn gave driving authority to the injured party.  The Court held that this doctrine is irrelevant to the key question of whether the claimant took the vehicle unlawfully – meaning without the owner’s permission.  The Supreme Court also overruled a 1992 plurality opinion from the Supreme Court (and its progeny) that found a “family joyriding” exception to the unlawful taking prohibition, as not having a basis in the statutory language. 

Justice Zahra authored the opinion, and was joined by Chief Justice Young, and Justices Markman and Mary Beth Kelly.  Justices Cavanaugh and Marilyn Kelly and Hathaway dissented.