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Gurski v. Motorists Mutual Insurance Co.

Court of Appeals of Michigan

October 17, 2017

DAVID GURSKI, Plaintiff-Appellee,

         Wayne Circuit Court LC No. 14-008077-NF

          Before: Saad, P.J., and Cavanagh and Cameron, JJ.

          SAAD, P.J.

         In this no-fault priority case, defendant Farm Bureau Insurance Company (Farm Bureau) appeals the trial court's order that denied its motion for summary disposition. For the reasons provided below, we reverse and remand for entry of summary disposition in favor of Farm Bureau.


         This case arises from an accident involving a vehicle and plaintiff. Plaintiff was working outside the vehicle when the vehicle slipped into gear and injured him. Plaintiff thereafter sought the recovery of personal protection insurance (PIP) benefits under Michigan's no-fault act, MCL 500.3101 et seq. The resolution of this case depends on the proper interpretation of an insurance policy issued by Farm Bureau, who insured the vehicle for comprehensive coverage, and a portion of the no-fault act.

         The trial court ruled, incorrectly, that because plaintiff qualified as an "insured" under the policy and because the vehicle was a "covered auto" on the policy because it was listed on the policy for comprehensive coverage, plaintiff could recover PIP benefits from Farm Bureau. However, and most importantly, because the vehicle was not a "covered auto" for the purposes of PIP benefits, plaintiff cannot rely on the insurance policy to recover those benefits from Farm Bureau. In other words, the policy undoubtedly expanded on who typically is considered an "insured" to include plaintiff, but that specific expansion did not alter the actual coverage provided by the policy. Here, the policy clearly did not provide PIP coverage for the vehicle, which means that plaintiff cannot recover PIP benefits based on the terms of the policy that Farm Bureau issued.

         The trial court also ruled that MCL 500.3115(1) of the no-fault act requires Farm Bureau to provide PIP benefits to plaintiff regardless of the coverage listed in the policy. MCL 500.3115(1) can indeed require insurers to provide PIP benefits although they did not provide PIP coverage for the vehicle involved in the accident. However, in order to recover under this provision, the owner of the vehicle involved in the accident must have PIP coverage from some source. Here, the owner of the vehicle did not have PIP coverage (through Farm Bureau or otherwise). While Farm Bureau's policy provided PIP coverage to other vehicles, it cannot be said that the owner was covered. The named insured on the policy was a company, and the owner was named as a "designated insured" in Farm Bureau's policy solely for purposes of liability insurance, not PIP coverage. Therefore, Farm Bureau is not a PIP insurer of the owner of the vehicle that was involved in the accident. Consequently, MCL 500.3115(1) does not allow plaintiff to recover PIP benefits from Farm Bureau.

         Accordingly, the trial court erred when it ruled that Farm Bureau was liable to pay PIP benefits to plaintiff. We reverse and instruct the court to grant summary disposition in favor of Farm Bureau.

         II. BASIC FACTS

         The underlying facts are undisputed. Plaintiff is the owner of Gurski Auto Repair Shop and Services. On June 24, 2013, plaintiff was injured while working on a 1993 Jeep Wrangler at his shop. When plaintiff tried to jump-start the Jeep's battery, the Jeep somehow slid into gear and ran over his leg.

         The owner of the Jeep is Andy Frazier (Mr. Frazier). Mr. Frazier's business, Frazier Construction, LLC, had an insurance policy with Farm Bureau. On that policy, it listed Frazier Construction as the "named insured." However, elsewhere in the policy, it listed Mr. Frazier as a "designated insured." The endorsement related to the "designated insured" provides, in pertinent part:

Each person or organization shown in the Additional Interest Schedule as a Designated Insured is an "insured" for LIABILITY COVERAGE, but only to the extent that person or organization qualifies as an "insured" under the WHO IS AN INSURED provision contained in Section II of the Coverage Form.
We will pay the damages for which the Designated Insured becomes legally liable only if the damages arise out of the negligence of the Named Insured.

         The policy listed three different vehicles: a 2011 trailer, the 1993 Jeep that was involved with the accident, and a 2004 Ford F250 truck. However, while the Ford F250 and trailer had personal injury protection (PIP) coverage, the Jeep did not.[1] Under the "Michigan Personal Injury Protection" section of the policy, it states in pertinent part:

We will pay personal injury protection benefits to or for an "insured" who sustains "bodily injury" caused by an "accident" and resulting from the ownership, maintenance, or use of an "auto" as an "auto."

         And under "WHO IS AN INSURED, " the policy states:

1. You or any "family member".
2. Anyone else who sustains "bodily injury":
c. While not occupying any "auto" as a result of an "accident" involving a covered "auto".

         The policy also included a section, titled "Elimination of Mandatory Coverage, " which states:

In accordance with the named Insured's request, coverages mandatory under Michigan's No-Fault Auto Insurance Law have been eliminated from a vehicle(s) covered by the policy. The company shall not be liable for loss, damage, and/or liability caused while such a vehicle(s) is moved or operated.

         Plaintiff attempted to recover PIP benefits through all three defendants. Defendant Motorists Mutual, who had issued a no-fault policy to plaintiff's business, denied the claim because plaintiff was not a named insurer under its policy. Defendant Farm Bureau denied coverage because the policy does not provide PIP benefits for the Jeep. And defendant Michigan Automobile Insurance Placement Facility (MAIPF) refused to assign plaintiff's claim to an insurer because it determined that Farm Bureau was liable for providing coverage. Plaintiff thereafter filed suit.

         MAIPF filed a motion for summary disposition and argued that it should be dismissed from the case because coverage is available under the Farm Bureau policy. Farm Bureau argued that it cannot be liable for PIP benefits because it is not an insurer of the owner of the Jeep for purposes of no-fault benefits.

         After receiving competing motions for summary disposition from the various parties, the trial court issued its order, which denied Farm Bureau's motion and partially granted plaintiff's and motion.[2] The court found that Farm Bureau ...

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