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Evans v. State Farm Mutual Automobile Insurance Co.

United States District Court, E.D. Michigan, Southern Division

October 19, 2016

JOHN EVANS, Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and AMERICAN TRUCKING & TRANSPORTATION RISK RETENTION GROUP, Defendants.

          MEMORANDUM AND ORDER GRANTING ATTIC'S MOTION FOR SUMMARY JUDGMENT (Doc. 58). GRANTING IN PART AND DENYING IN PART WITHOUT PREJUDICE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (Doc. 57). and DENYING IN PART WITH PREJUDICE AND DENYING IN PART WITHOUT PREJUDICE STATE FARM'S MOTION TO DISMISS (Doc. 56)

          AVERN COHN, UNITED STATES DISTRICT JUDGE.

         This is an insurance case. The case has two parts. The first deals with an insurer priority dispute. The second deals with proofs of benefits owed.

         I. PART ONE: Which Insurer Is Responsible

         A. INTRODUCTION

         1. The Case

         Plaintiff John Evans is a truck driver and Michigan resident. On Tuesday, May 27, 2014, Evans was involved in a motor vehicle accident in Cleveland, Ohio while hauling a load of steel from Michigan to New York.

         Evans was engaged to haul the load by a trucking company, T.S. Expediting Services, Inc. (TSE). TSE's liability insurer is Defendant American Trucking and Transportation Insurance Company (ATTIC), a Montana corporation.

         Evans was hospitalized for neck and back injuries and discharged the next day. In the year after, he received medical treatment and physical therapy, but did not work.

         Evans seeks payment of personal protection insurance (PIP) benefits, for work loss and replacement services under the Michigan No-Fault Automobile Insurance Act (No-Fault Act), M.C.L § 500.3101, et seq. Evans claims the PIP benefits as a spouse under an automobile insurance policy issued to his wife by Defendant State Farm Mutual Automobile Insurance Company (State Farm), an Illinois corporation.

         There is no dispute Evans is covered for PIP benefits under the No-Fault Act related to his accident. However, State Farm says ATTIC is the priority insurer under the No-Fault Act because TSE, ATTIC'S insured, was Evans's employer and furnished the truck he drove. ATTIC says State Farm is liable as Evans was not TSE's employee but an independent contractor.

         ATTIC removed the case from Oakland County Circuit Court based on diversity jurisdiction.

         2. Pending Motions

         State Farm moved to dismiss, (Doc. 56). Evans moved for summary judgment, (Doc. 57). ATTIC moved for summary judgment, (Doc. 58). The 3 motions concern in part which insurer-State Farm or ATTIC-is responsible to pay PIP benefits to Evans.

         As will be explained, State Farm-not ATTIC-is the responsible insurer for payment of PIP benefits to Evans under the No-Fault Act. To this extent, ATTIC's motion for summary judgment is GRANTED. ATTIC is terminated as a party.

         Evans is entitled to PIP benefits from State Farm as a spouse under his wife's policy. To this extent, Evans's motion for summary judgment is GRANTED IN PART and State Farm's motion to dismiss is DENIED IN PART WITH PREJUDICE.

         B. BACKGROUND

         1. Truck Operations

         a. Lisa Tucker's Arrangement with TSE

         Evans drove a truck for Lisa Tucker (Tucker). Tucker provided transportation services to TSE. Tucker leased a cab to TSE. TSE leased its semi-trailer to her. Tucker had exclusive use of the cab and semi-trailer. She could use the cab for any purpose, but the semi-trailer only for TSE business. Tucker engaged a driver to haul TSE-dispatched loads to specified locations using the cab and semi-trailer.

         Tucker's arrangement with TSE was governed by a "Motor Vehicle Lease and Independent Contractor Agreement." The agreement said "the relationship herein created is that of independent contractor, and NOT THAT OF EMPLOYER AND EMPLOYEE." (Doc. 58-3 at 8). Tucker was free to (1) accept or reject a load for any reason, (2) set her hours, and (3) select routes and stops within a delivery timetable. Tucker separately (1) paid income tax on her earnings, (2) filed tax report forms, (3) deducted income-tax withholdings from her earnings, and (4) paid the expenses of operation including compensation for drivers and maintenance costs of the cab.

         TSE provided PIP insurance "to the extent required by law" while the cab and semi-trailer were used in transportation services for TSE. Tucker paid for property and liability insurance for the cab when it was not used for TSE transportation services. Either Tucker or TSE could terminate the agreement at any time with 7 days' notice.

         b. Tucker's ...


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