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Bronson Health Care Group, Inc. v. State Auto Property and Casualty Insurance Co.

Court of Appeals of Michigan

November 7, 2019

BRONSON HEALTH CARE GROUP, INC., Plaintiff-Appellant,
v.
STATE AUTO PROPERTY AND CASUALTY INSURANCE COMPANY and STATE AUTOMOBILE MUTUAL INSURANCE COMPANY, Defendants-Appellees.

          Kalamazoo Circuit Court LC No. 2017-000582-NF

          Before: Markey, P.J., and Borrello and Boonstra, JJ.

          Boonstra, J.

         Plaintiff appeals by right the trial court's order granting summary disposition in favor of defendants under MCR 2.116(C)(10). We affirm.

         I. PERTINENT FACTS AND PROCEDURAL HISTORY

         Victor Caballero (Victor) was involved in an automobile accident while driving a motor vehicle insured under a Personal Auto Policy (the Policy) issued by State Auto[1] to Maria Caballero (Maria), Victor's wife. Victor sustained injuries and was treated by plaintiff; he assigned to plaintiff his right to seek payment of personal injury protection (PIP) benefits under the Michigan no-fault insurance act (the no-fault act);[2] plaintiff in turn sought to recover them from State Auto. State Auto denied coverage on the ground that Victor was an excluded operator under the Policy. Plaintiff brought suit, asserting that Victor had a statutory right to receive PIP benefits and that plaintiff, by assignment, had a right to recover those benefits for the services it provided to Victor. State Auto moved for summary disposition under MCR 2.116(C)(10), contending that, as an excluded operator, Victor (and therefore plaintiff by assignment) was not entitled to recover PIP benefits from State Auto. Plaintiff argued that it was entitled to recover PIP benefits from State Auto because the Policy's applicable Named Driver Exclusion Endorsement (the Endorsement) did not specify that PIP benefits would not apply (if Victor operated a covered motor vehicle); it instead only stated that certain other types of benefits would not apply. The trial court concluded that the language of the Policy as a whole reflected an intent to exclude PIP benefits when Victor, an excluded driver, was driving a covered vehicle. It therefore granted State Auto's motion. This appeal followed.

         II. STANDARD OF REVIEW

         This Court reviews de novo a trial court's ruling on a motion for summary disposition. Zaher v Miotke, 300 Mich.App. 132, 139; 832 N.W.2d 266 (2013).

A motion under MCR 2.116(C)(10) tests the factual support of a plaintiff's claim. Summary disposition is appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law. In reviewing a motion under MCR 2.116(C)(10), this Court considers the pleadings, admissions, affidavits, and other relevant documentary evidence of record in the light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists to warrant a trial. 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. [Id. at 139-140 (quotation marks and citations omitted).]

         We review de novo as a question of law the interpretation of statutes. McCormick v Carrier, 487 Mich. 180, 233; 795 N.W.2d 517 (2010). We also review de novo the construction and interpretation of an insurance contract. Lewis v Farmers Ins Exch, 315 Mich.App. 202, 209; 888 N.W.2d 916 (2016).

         III. ANALYSIS

         Plaintiff argues that the trial court erred by granting summary disposition in favor of State Auto because, based on the plain and unambiguous language of the Endorsement, it did not apply to PIP benefits. However, we disagree with plaintiff's framing of the issue. Moreover, we conclude, after appropriately framing the issue, that the trial court properly granted summary disposition in favor of State Auto, although our reasoning differs somewhat from that of the trial court.[3]

         Although plaintiff argues that the issue before us is purely one of contract interpretation, we conclude that where, as here, the benefits in question are mandated by statute, the issue is actually one of statutory interpretation. "The no-fault act mandates certain minimal coverage," although "a policy of insurance may provide broader coverage than that mandated under the statute or may provide supplemental coverage for benefits not required by the no-fault act." See Rednour v Hasting Mut Ins Co, 245 Mich.App. 419, 422; 628 N.W.2d 116 (2001), rev'd on other grounds 468 Mich. 241 (2003). For non-mandated coverage," it is the insurance policy as a contractual agreement between the parties that governs the coverage, rather than the statutory provisions of the no-fault act." Id. However, for mandated coverage, it is the no-fault act itself that governs the coverage. Id. See also, Cruz v State Farm Mut Auto Ins Co, 241 Mich.App. 159, 164-167; 614 N.W.2d 689 (2000).

         PIP benefits are mandated by the no-fault act, and a claimant's entitlement to PIP benefits is therefore based in statute, not in contract. See, e.g., MCL 500.3105(2) ("[p]ersonal protection benefits are due under this chapter without regard to fault"); MCL 500.3105(1) ("[u]nder personal protection insurance an insurer is liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle"); Cruz, 241 Mich.App. at 164-167 ("The no-fault act mandates that insurers 'pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle.' ") (quoting MCL 500.3105(1)). "Because [PIP] benefits are mandated by the no-fault statute, the statute is the 'rule-book' for deciding the issues in questions regarding awarding those benefits." Id., (citation omitted). Therefore, "our task is to interpret the statute and not the policy. Where insurance policy coverage is directed by the no-fault act and the language in the policy is intended to be consistent with that ...


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