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Turner v. Farmers Insurance Exchange

Court of Appeals of Michigan

April 16, 2019

MAEGAN TURNER, by WALTER SAKOWSKI, Conservator, Plaintiff,
v.
FARMERS INSURANCE EXCHANGE, Defendant/Cross-Plaintiff/Cross-Defendant-Appellant, and RIVERVIEW MACOMB HOME & ATTENDANT CARE, LLC, Intervening Plaintiff, and ENTERPRISE LEASING CORPORATION OF DETROIT, LLC, and EAN HOLDINGS, LLC, Defendants/Cross-Defendants-Appellees, and ESTATE OF JASON PUCKETT, by GARY DUANE RUPP, Personal Representative, Defendant/Cross-Plaintiff, and PATSY VILLNEFF and TAMERA HARPER, Defendants/Cross-Defendants. JONTE EVERSON, Plaintiff,
v.
FARMERS INSURANCE EXCHANGE, Defendant/Third-Party Plaintiff-Appellant, and ENTERPRISE LEASING COMPANY, Third-Party Defendant-Appellee.

          Wayne Circuit Court LC Nos. 16-002031-NF, 16-000359-NF

          Before: Cavanagh, P.J., and Borrello and Redford, JJ.

          BORRELLO, J.

         These consolidated appeals[1] arise from insurer priority disputes under the Michigan no-fault act, MCL 500.3101 et seq. In Docket No. 339624, Farmers Insurance Exchange appeals as of right the Wayne Circuit Court's order granting summary disposition of its cross-complaint in favor of Enterprise Leasing Corporation of Detroit, LLC, and EAN Holdings, LLC. In Docket No. 339815, Farmers appeals as of right the Washtenaw Circuit Court's order granting summary disposition on its third-party complaint in favor of Enterprise Leasing Company. For the reasons set forth in this opinion, we reverse and remand for further proceedings.

         I. BACKGROUND

         A. DOCKET NO. 339624

         In Docket No. 339624, Maegan Turner was injured in a motor vehicle accident while riding as a passenger in car driven by Tamera Harper and which Harper had rented from Enterprise Leasing Corporation of Detroit, LLC. The car was registered in Maryland and owned by EAN Holdings, LLC, which had obtained a certificate of self-insurance that permitted it to operate as a Michigan automobile self-insured entity pursuant to MCL 500.3101d(1). For purposes of the instant appeal, there appears to be no substantial difference between Enterprise and EAN Holdings.[2]

         Following the accident, Enterprise denied a request to pay personal protection insurance (PIP) benefits stemming from Turner's injuries. Enterprise concluded that it was not financially responsible for Turner's PIP benefits, asserting that the Michigan no-fault act was inapplicable because the rental car that Harper was driving was registered in Maryland and had not been operated in Michigan for more than 30 days at the time of the accident. Turner's claim for benefits was assigned to Farmers by the Michigan Automobile Insurance Placement Facility.

         Turner subsequently initiated this lawsuit. During the course of the proceedings, Farmers filed a cross-claim seeking to have Enterprise declared the highest priority insurer such that Enterprise would be required to pay Turner's PIP benefits and reimburse Farmers for any benefits and expenses paid or incurred by Farmers in connection with Turner's claim for no-fault benefits. Farmers alleged that Enterprise was the insurer of the owner of the car that was involved in the motor vehicle accident and that the no-fault priority provision in MCL 500.3114(4)(a) required a person who was injured while he or she was an occupant in a motor vehicle to claim PIP benefits from the insurer of the owner or registrant of the vehicle occupied. Thus, Farmers asserted, because Enterprise was an applicable source of PIP benefits for Turner under MCL 500.3114(4)(a), Enterprise was higher in priority than Farmers as the assigned claims plan insurer.

         Reiterating its argument that it was not required to pay PIP benefits under the no-fault act for its out-of-state vehicle, Enterprise moved under MCR 2.116(C)(8) and (10) for summary disposition. Enterprise argued that the car in which Turner had been riding was not required to have been registered in Michigan and therefore Enterprise did not have to maintain the security for payment of PIP benefits that is otherwise required by MCL 500.3101(1). Enterprise further argued that, as a nonresident corporation, it also was not required to maintain security on the car under MCL 500.3102(1) because the car was not registered in Michigan and had not been operated in Michigan for an aggregate of more than 30 days within the relevant calendar year.

         In making this argument, Enterprise relied on our Supreme Court's decision in Parks v Detroit Auto Inter-Ins Exch, 426 Mich. 191, 195-196; 393 N.W.2d 833 (1986). Parks involved an insurer priority dispute stemming from an accident involving an employee who was injured while occupying a vehicle owned by the employee's self-insured employer. Enterprise argues that Parks stands for, in relevant part, the proposition that "an out-of-state vehicle not required to be registered in Michigan and not operated in this state for more than thirty days is not subject to the security provisions" of the no-fault act. Accordingly, Enterprise argues, the priority provisions in MCL 500.3114 were therefore inapplicable to the instant case.

         In response, Farmers argued that as the assigned claims insurer, it was merely the PIP provider of last resort when no other PIP coverage was available and that Enterprise was the entity actually obligated to provide Turner's PIP benefits. Farmers specifically argued that pursuant to MCL 500.3114(4)(a), Enterprise was first in priority because it owned the vehicle at issue and was self-insured, thus making it the insurer of the "owner or registrant of the vehicle occupied." Farmers maintained that under MCL 500.3114(4)(a), it was irrelevant whether Enterprise was required to register the vehicle at issue in Michigan or maintain security on that particular vehicle because § 3114(4)(a) was only concerned with the insurer "of the owner or registrant" of the vehicle and not with whether the particular vehicle involved in the accident was itself actually insured by the security required under the Michigan no-fault act.

         In a written opinion, the trial court granted Enterprise's motion for summary disposition under MCR 2.116(C)(8) and (10) and ruled that Enterprise was not required to reimburse Farmers for benefits it paid to Turner. Relying on Parks,[3] the trial court concluded that the priority statute was inapplicable to the instant case because the vehicle involved in the accident was registered in Maryland and was not driven in Michigan for more than 30 days or required to have been registered in Michigan, thus making the vehicle at issue not subject to the security requirements of the no-fault act. These appeals then ensued.

         B. DOCKET NO. 339815

         In Docket No. 339815, Jonte Everson was involved in a motor vehicle accident while driving a car that he had rented from Enterprise. The car was registered in Pennsylvania and owned by EAN Holdings. As in Docket No. 339624, evidence was submitted into the record that EAN Holdings had obtained a certificate of self-insurance for purposes of Michigan's no-fault act. Additionally, the car had not been operated in Michigan for an aggregate of more than 30 days during the relevant calendar year. Everson made a claim for benefits through the Michigan Assigned Claims Plan, and his claim was assigned to Farmers.

         After Everson initiated this lawsuit against Farmers, Farmers filed a third-party complaint against Enterprise in which Farmers sought a declaration that Enterprise was higher in priority and was liable to pay any no-fault benefits owed to Everson, including reimbursement to Farmers for any no-fault benefits it was required to pay to or for the benefit of Everson. As in Docket No. 339624, the sole matter requiring resolution at this juncture in Docket No. 339815 is the priority dispute between Farmers and Enterprise.

         Enterprise moved for summary disposition pursuant to MCR 2.116(C)(8) and (10), making essentially the same argument that it made in Docket No. 339624. Farmers opposed the motion, also making essentially the same argument that it made in Docket No. 339624.

         The trial court granted summary disposition in favor of Enterprise under MCR 2.116(C)(10). Relying on Parks, [4] the trial court ruled that Enterprise was entitled to summary disposition because there was no genuine issue of material fact that the car that Everson was driving had not been operated in Michigan for an aggregate of more than 30 days during the calendar year. The trial court reasoned that a "vehicle that is exempt from registration in Michigan cannot and does not trigger application of the statutory order of priority under no-fault law."

         II. STANDARD OF REVIEW

         A trial court's summary disposition ruling is reviewed de novo to determine whether the moving party is entitled to judgment as a matter of law. Maiden v Rozwood, 461 Mich. 109, 118; 597 N.W.2d 817 (1999). Because it is necessary in these consolidated cases to consider material outside the pleadings, we review the summary disposition rulings of the respective trial courts as having been granted under MCR 2.116(C)(10). See Hughes v Region VII Area Agency on Aging, 277 Mich.App. 268, 273; 744 N.W.2d 10 (2007). In doing so, a court must consider "affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties in the light most favorable to the party opposing the motion." Maiden, 461 Mich. at 120 (citation omitted). "A trial court may grant a motion for summary disposition under MCR 2.116(C)(10) if the affidavits or other documentary evidence show that there is no genuine issue in respect to any material fact, and the moving party is entitled to judgment as a matter of law." Quinto v Cross & Peters Co, 451 Mich. 358, 362; 547 N.W.2d 314 (1996). "A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ." West v Gen Motors Corp, 469 Mich. 177, 183; 665 N.W.2d 468 (2003). Additionally, issues of statutory interpretation are reviewed de novo. In re Bradley Estate, 494 Mich. 367, 377; 835 N.W.2d 545 (2013).

         III. ANALYSIS

         On appeal, Farmers argues as it did below, that Enterprise is higher in priority because Enterprise was self-insured and owned the vehicles involved in each of the accidents, and MCL 500.3114(4)(a) provides that PIP benefits must be paid by the "insurer of the owner or registrant of the vehicle occupied" regardless of whether the particular vehicle involved in the accident was actually insured or required to be insured. (Emphasis added.) Enterprise, also arguing consistently with its position at the trial court level, maintains that under Parks, 426 Mich. at 203-207, the priority provisions in MCL 500.3114 are completely inapplicable and Enterprise cannot be considered the "insurer of the owner or registrant of the vehicle occupied" for purposes of § 3114(4)(a) because Enterprise was not required to maintain no-fault security on the vehicles.

         In opposition, Enterprise argues that as a nonresident corporation, it was exempt from the security mandates of §§ 3101(1)[5] and 3102(1)[6] of the no-fault act because the vehicles at issue were not required to have been registered in Michigan and were not operated in Michigan for an aggregate of more than 30 days in the calendar year at issue. Enterprise thus argues that because it was not required to maintain no-fault security on the specific vehicles involved in each of the accidents, the priority provisions of the no-fault act do not apply and it cannot be liable for paying PIP benefits based on the accidents involving those specific vehicles.

         The issue before us concerns the construction of various provisions of the no-fault act. "When interpreting statutes, our primary goal is to ascertain and give effect to the intent of the Legislature." Averill v Dauterman, 284 Mich.App. 18, 22; 772 N.W.2d 797 (2009). We first consider the "fair and natural import of the terms employed" in the statutory language, in light of the subject matter of the law. Id. If the plain and ordinary meaning of the statute is clear, then it is enforced as written and judicial construction is "normally neither necessary nor permitted." Id.

         We begin our analysis with the no-fault act priority provisions contained in MCL 500.3114. Under MCL 500.3114(1), a person seeking no-fault benefits must generally look first to his or her own insurer, [7] unless one of the exceptions in MCL 500.3114(2), (3), or (5) applies. Farmers Ins Exch v Farm Bureau Ins Co, 272 Mich.App. 106, 111; 724 N.W.2d 485');">724 N.W.2d 485 (2006). In the instant case, it is undisputed that none of these exceptions apply, and there is also no dispute between the parties that neither Turner nor Everson had an applicable policy of no-fault insurance under § 3114(1). In such a case, when Subsection (1) applies but there is no available insurer, we next look to Subsection (4) because these two subsections "together establish the general order of priority." Titan Ins Co v American Country Ins Co, 312 Mich.App. 291, 301; 876 N.W.2d 853 (2015) (quotation marks and citation omitted). MCL 500.3114(4) provides in pertinent part as follows:

[A] person suffering accidental bodily injury arising from a motor vehicle accident while an occupant of a motor vehicle shall claim personal protection insurance benefits from insurers in the following order of priority:
(a)The insurer of the owner or registrant of the vehicle occupied.
(b)The insurer of the operator of the vehicle occupied. [Emphasis added.]

         Finally, under "certain limited circumstances, a person may also claim benefits through the Assigned Claims Facility under MCL 500.3172(1)." Farmers Ins Exch, 272 Mich.App. at 112. Section 3172(1) provides in as follows:

A person entitled to claim because of accidental bodily injury arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle in this state may obtain personal protection insurance benefits through the assigned claims plan if no personal protection insurance is applicable to the injury, no personal protection insurance applicable to the injury can be identified, the personal protection insurance applicable to the injury cannot be ascertained because of a dispute between 2 or more automobile insurers concerning their obligation to provide coverage or the equitable distribution of the loss, or the only identifiable personal protection insurance applicable to the injury is, because of financial inability of 1 or more insurers to fulfill their obligations, inadequate to provide benefits up to the maximum prescribed. In that case, unpaid benefits due or coming due may be collected under the assigned claims plan and the insurer to which the claim is assigned is entitled to reimbursement from the defaulting insurers to the extent of their financial responsibility.

         "Under the no-fault act, the Assigned Claims Facility represents the insurer of last priority." Spencer v Citizens Ins Co, 239 ...


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