Raad Marougi v. Auto Club Insurance Association ( 2015 )

STATE OF MICHIGAN
COURT OF APPEALS
RAAD MAROUGI, UNPUBLISHED
October 22, 2015
Plaintiff-Appellant,
and
DETROIT ANESTHESIA GROUP, PLLC, and
MICHIGAN CRNA’S STAFFING, LLC,
Intervening Plaintiffs,
v No. 322120
Wayne Circuit Court
AUTO CLUB INSURANCE ASSOCIATION, LC No. 12-005878-NF
Defendant-Appellee.
Before: FORT HOOD, P.J., and CAVANAGH and K. F. KELLY, JJ.
PER CURIAM.
Plaintiff appeals as of right an order granting defendant’s motion for summary
disposition. We reverse.1
This case arises from injuries sustained by plaintiff as the result of a truck accident.
Plaintiff worked as a truck driver with a company called Express-1, Inc. (Express-1), the same
1
In its brief on appeal, defendant argues that this Court lacks jurisdiction because plaintiff
appealed from the trial court’s amended order denying plaintiff’s motion for relief from the
court’s order granting defendant’s motion for summary disposition, entered on May 23, 2014,
and did not properly appeal from the original May 13, 2014 order denying the requested relief.
In response, plaintiff contends that the Michigan Court Rules allow him to appeal within 21 days
a trial court’s entry of an order deciding a motion for a new trial, a motion for rehearing or
reconsideration, or a motion for other relief, and that he had filed this appeal within 21 days of
the trial court’s amended order. We hold that plaintiff’s appeal was timely because the amended
order constituted a substantive change from the trial court’s earlier order, not just a clerical
mistake or rearranging of words.
-1-
company from whom he leased the truck. Plaintiff did not carry no-fault insurance on the truck,
but Express-1 had a no-fault policy on the vehicle through Great West Casualty Company (Great
West). Plaintiff insured at least one of his personal vehicles through defendant.
Plaintiff contends that the trial court erred in granting defendant’s motion for summary
disposition because he was an independent contractor and because there was a valid no-fault
insurance policy on the truck, thereby entitling him to claim benefits from defendant, his
personal no-fault insurance provider. We agree that the trial court erred in granting the motion,
but not for the reasons advanced by plaintiff on appeal.
“This Court reviews de novo a trial court’s decision on a motion for summary
disposition.” Gorman v American Honda Motor Co, Inc, 302 Mich. App. 113, 115; 839 NW2d
223 (2013). While the trial judge did not identify the specific legal grounds on which he granted
defendant’s motion for summary disposition, his comments regarding plaintiff’s status as an
independent contractor or employee, along with his reliance on facts gleaned from plaintiff’s
deposition, suggest that he considered documentation beyond the pleadings in reaching his
decision. Accordingly, review under the standards of MCR 2.116(C)(10) is appropriate in this
case. See Besic v Citizens Ins Co of the Midwest, 290 Mich. App. 19, 23; 800 NW2d 93 (2010).
A motion for summary disposition pursuant to MCR 2.116(C)(10) challenges whether a
plaintiff provided sufficient factual support for the claims in his complaint. Stone v Auto-Owners
Ins Co, 307 Mich. App. 169, 173; 858 NW2d 765 (2014). 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.” Id. (citation and quotation marks omitted).
Under the no-fault automobile insurance act, MCL 500.3101 et seq., “insurance
companies are required to provide first-party insurance benefits, referred to as personal
protection insurance (PIP) benefits, for certain expenses and losses.” Johnson v Recca, 492
Mich. 169, 173; 821 NW2d 520 (2012); see MCL 500.3107 and MCL 500.3108. However, the
no-fault act precludes a person who sustains injuries in a vehicle accident from claiming PIP
benefits if the person’s vehicle was uninsured at the time of the accident. MCL 500.3101(1);
MCL 500.3113(b). This Court has held that there may be more than one statutory owner of a
vehicle for no-fault purposes, Integral Ins Co v Maersk Container Serv Co, Inc, 206 Mich. App.
325, 332; 520 NW2d 656 (1994), and that MCL 500.3113(b) does not preclude payment of PIP
benefits to one owner if another owner provides the required no-fault coverage, Iqbal v Bristol
West Ins Group, 278 Mich. App. 31, 45; 748 NW2d 574 (2008). MCL 500.3101 defines an
“owner,” in relevant part, as a person “having the use of a motor vehicle, under a lease or
otherwise, for a period that is greater than 30 days” and “[a] person that holds the legal title to a
motor vehicle . . . other than a person engaged in the business of leasing motor vehicles[.]” MCL
500.3101(2)(k)(i) and (iii).
Assuming that the no-fault act does not preclude an injured person from claiming PIP
benefits for the foregoing reasons, the person generally looks to his or her own no-fault insurance
carrier for PIP coverage, “even if the injured party’s vehicle was not involved in the accident.”
Corwin v DaimlerChrysler Ins Co, 296 Mich. App. 242, 262; 819 NW2d 68 (2012); see MCL
500.3114(1). MCL 500.3114(3) constitutes an exception to this general rule, providing that
-2-
“[a]n employee . . . who suffers accidental bodily injury while an occupant of a motor vehicle
owned or registered by the employer, shall receive personal protection insurance benefits to
which the employee is entitled from the insurer of the furnished vehicle.”
“For the purposes of MCL 500.3114(3), whether an injured party was an ‘employee’ is
determined by applying the ‘economic reality test.’ ” Adanalic v Harco Nat Ins Co, 309 Mich
App 173, 190-191; ___ NW2d ___ (2015). “By this test, factors to be considered include: (a)
control of the worker’s duties, (b) payment of wages, (c) right to hire, fire and discipline, and (d)
the performance of the duties as an integral part of the employer’s business towards the
accomplishment of a common goal.” Id. at 191 (citation and quotation marks omitted). The list
of factors in the economic reality test is nonexclusive, and no one factor is dispositive. Buckley v
Prof Plaza Clinic Corp, 281 Mich. App. 224, 235; 761 NW2d 284 (2008). “The test takes into
account the totality of the circumstances around the work performed[.]” Id. at 234.
Under the no-fault act, an independent contractor is not considered an employee.
Adanalic, 309 Mich. App. at 191. “An independent contractor is defined as one who, carrying on
an independent business, contracts to do work without being subject to the right of control by the
employer as to the method of work but only as to the result to be accomplished.” Candelaria v
BC Gen Contractors, Inc, 236 Mich. App. 67, 73; 600 NW2d 348 (1999) (citation and quotation
marks omitted). However, in a business-vehicle accident involving injuries to a self-employed
sole proprietor, the Michigan Supreme Court has further held that the vehicle’s no-fault insurer,
rather than the sole proprietor’s personal insurer, bears the highest priority of payment. See
Celina Mut Ins Co v Lake States Ins Co, 452 Mich. 84, 89; 549 NW2d 834 (1996); see also Besic,
290 Mich. App. at 31-32.
In this case, the basic facts are not in dispute: plaintiff leased his truck from Express-1
but did not carry no-fault insurance on the vehicle, Express-1 did provide no-fault insurance on
the truck, and plaintiff had a no-fault policy through defendant on at least one of his personal
vehicles. Both plaintiff and Express-1 were owners of the truck for purposes of the no-fault act
because plaintiff had use of the truck for more than 30 days under a lease, Express-1 held the
title to the truck, and there was no evidence that Express-1 was engaged in the business of
leasing motor vehicles. See MCL 500.3101(2)(k)(i) and (iii). Further, the no-fault act did not
preclude plaintiff from claiming PIP benefits because Express-1 had a valid no-fault insurance
policy on the truck. See MCL 500.3113; Iqbal, 278 Mich. App. at 45.
Thus, plaintiff’s status as an employee of Express-1, an independent contractor, or a self-
employed sole proprietor was a crucial issue because that status determined from which
company he was entitled to claim PIP benefits. If plaintiff was an employee, he was entitled to
claim benefits from Express-1, his employer. See MCL 500.3114(3). The same result would
occur if he was a self-employed sole proprietor, because Great West was the truck’s no-fault
insurer. See Celina Mut Ins Co, 452 Mich. at 89. If, instead, he was an independent contractor,
he was entitled to claim PIP benefits from defendant, his personal no-fault insurer, under the no-
fault act’s general priority rule. See MCL 500.3114(1); Corwin, 296 Mich. App. at 262.
Rather than correctly resolving this critical issue, however, the trial court failed to apply
the economic reality test, held that the issue was irrelevant because defendant was entitled to
summary disposition regardless of plaintiff’s employment status, and then stated in a later order
-3-
that “It does not matter if [p]laintiff was an independent contractor or employee[.]” Contrary to
the trial court’s reasoning, plaintiff’s employment status—very nearly on its own—would
resolve the issue of which insurer was liable for his PIP benefits. Accordingly, the trial court
erred in granting defendant’s motion for summary disposition because a genuine issue of fact
existed regarding plaintiff’s status, resolution of that issue was material to the case, and
defendant was not entitled to judgment as a matter of law. See Stone, 307 Mich. App. at 173.
Moreover, this genuine issue of material fact still exists in spite of the trial court’s
subsequent repeated statements that plaintiff was an independent contractor, defendant’s
assertion on appeal that plaintiff was self-employed, and the parties’ ever-shifting
characterizations of plaintiff’s status throughout the case. In support of a finding that plaintiff
was an employee of Express-1, plaintiff testified during his deposition that he “worked for”
Express-1, Express-1 was his current employer, he leased the truck from his employer, and he
told the ambulance staff that he worked at Express-1. Express-1 also provided plaintiff’s
medical benefits, trained him at a two-day orientation to ensure that he followed the company’s
rules effectively, and called him numerous times to check on him after the accident. Great West,
Express-1’s insurance provider, was also the only company to pay plaintiff any PIP benefits, and
plaintiff listed Express-1 as his present employer on his Great West application for benefits.
Plaintiff also listed Express-1 as his employer on his application for benefits from defendant.
On the other hand, in support of plaintiff’s status as an independent contractor, Express-1
apparently provided little to no supervision of plaintiff, simply supplying him with an address
and leaving him to his own devices regarding his deliveries. He had no supervisor at the
company and regularly dealt only with dispatchers who relayed load information to him.
Plaintiff also received a 1099-Misc tax form from Express-1, and the form listed his income as
“nonemployee compensation” and showed that Express-1 did not withhold federal or state taxes
from his pay. See Adanalic, 309 Mich. App. at 193 (listing a 1099 form as one factor weighing
toward a determination that a worker was an independent contractor). An Express-1 DOT
checklist classifies plaintiff as an “owner/operator” rather than an employee. Plaintiff also
classified himself as an “owner/operator” in his TransGuard insurance application through the
National Association of Independent Truckers, and the contract language in the application
specifically refers to plaintiff as an independent contractor. Accordingly, application of the
economic reality test fails to establish plaintiff’s status as a matter of law. See id. at 191.
Instead, particularly when viewed in a light most favorable to plaintiff, sufficient evidence
existed to create a genuine issue of material fact and preclude summary disposition in favor of
defendant. See Gorman, 302 Mich. App. at 115; Stone, 307 Mich. App. at 173.
Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction. Plaintiff, the prevailing party, may tax costs. MCR 7.219.
/s/ Karen M. Fort Hood
/s/ Mark J. Cavanagh
/s/ Kirsten Frank Kelly
-4-