Arthur Booker v. Hartford Casualty Insurance Company ( 2020 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
ARTHUR BOOKER, UNPUBLISHED
July 16, 2020
Plaintiff,
and
MICHIGAN INSTITUTE OF PAIN &
HEADACHE, PC, doing business as METRO PAIN
CLINIC,
Intervening Plaintiff-Appellant,
v No. 348491
Oakland Circuit Court
HARTFORD CASUALTY INSURANCE LC No. 2018-165514-NF
COMPANY, HOME-OWNERS INSURANCE
COMPANY,
Defendants-Appellees,
and
JOSEPH JONES-OLBRYS, JR., LINDA
BEYDOUN, SAFEWAY INSURANCE AGENCY,
and GRAND GENERAL INSURANCE AGENCY,
Defendants.
ARTHUR BOOKER,
Plaintiff-Appellant,
and
MICHIGAN INSTITUTE OF PAIN &
HEADACHE, PC, doing business as METRO PAIN
CLINIC,
-1-
Intervening Plaintiff,
v No. 348522
Oakland Circuit Court
HARTFORD CASUALTY INSURANCE LC No. 2018-165514-NF
COMPANY, HOME-OWNERS INSURANCE
COMPANY, LINDA BEYDOUN, SAFEWAY
INSURANCE AGENCY, and GRAND GENERAL
INSURANCE AGENCY,
Defendants-Appellees,
and
JOSEPH JONES-OLBRYS, JR.,
Defendant.
Before: RIORDAN, P.J., and SHAPIRO and RONAYNE KRAUSE, JJ.
PER CURIAM.
In these consolidated appeals,1 plaintiff Arthur Booker and intervening plaintiff Michigan
Institute of Pain & Headache PC, doing business as Metro Pain Clinic, appeal the grant of summary
disposition in favor of defendants Home-Owners Insurance Company and Hartford Casualty
Insurance Company. Booker additionally argues that the trial court erred by granting summary
disposition in favor of defendants Linda Beydoun and Safeway Insurance Agency. For the reasons
stated in this opinion, we reverse the trial court’s dismissal of Booker’s and Metro Pain Clinic’s
claims against Home-Owners and Hartford and remand for further proceedings. Because we
conclude that Booker is entitled to personal protection insurance (PIP) benefits from one of the
insurers, his claims against Beydoun, Safeway and defendant Grand General Insurance Company
are moot for a lack of damages. Therefore, we affirm summary disposition in favor of those
defendants.
1
Booker v Hartford Cas Ins Co, unpublished order of the Court of Appeals, entered April 24, 2019
(Docket Nos. 348491, 348522)
-2-
I. FACTS AND PROCEDURAL HISTORY
On May 4, 2017, Booker and Joseph Jones-Olbrys were involved in a motor-vehicle
accident.2 Booker suffered numerous injuries and incurred a significant amount of medical bills,
expenses for attendant care and replacement services, and lost wages.
At the time of the accident, Booker was driving a 2004 Chevrolet Cavalier. He was the
registered owner of that vehicle, which he purchased in December 2014. When he sought no-fault
insurance for the vehicle, he told his insurance agent, Beydoun, that he had a handyman business.
After learning that Booker used the vehicle for his business, Beydoun informed him that he was
eligible for a commercial policy. Booker’s application for a commercial policy was approved. He
subsequently incorporated his business as Arthur Booker Handyman Services, Inc., and renewals
of the policy were issued to that entity.
After the accident, Hartford denied Booker’s claim for coverage. He brought suit seeking
PIP benefits against Hartford or alternatively from Home-Owners, the no-fault insurer of Booker’s
sister, with whom he lived. In addition, Booker brought a negligence claim against Beydoun, the
insurance agent who sold him the commercial policy; negligence and vicarious-liability claims
against Safeway, the insurance agency that Beydoun worked for; and a negligence claim against
Grand General, the wholesale insurance broker that assisted in processing the policy.
In its intervening complaint, Metro Pain Clinic brought a claim for PIP benefits against
Hartford and Home-Owners based on the healthcare services Metro Pain Clinic had provided to
Booker. Metro Pain Clinic’s claims relied on an assignment of benefits executed by Booker.
Metro Pain Clinic also attached a patient report that reflected a $70,560 outstanding balance for
services provided to Booker.
Eventually, all defendants filed motions for summary disposition. Home-Owners argued
that Hartford, as Booker’s personal insurer, was the highest priority insurer. Home-Owners
alternatively argued that, if it was determined that Booker did not maintain his own automobile
insurer as the owner of the vehicle involved in the accident, then he would be precluded from
obtaining PIP benefits. The trial court agreed on both counts and granted Home-Owners summary
disposition.
Hartford then sought summary disposition on the grounds that Booker was precluded from
receiving PIP benefits by MCL 500.3113(b) because he failed to “maintain security” on the vehicle
he owned as required by MCL 500.3101(1). In granting Hartford’s motion, the trial court
determined that Booker was the sole owner and registrant of the vehicle involved in the accident
and that Booker Handyman Services was the sole named insured under the Hartford policy.
Because Booker Handyman Services was not an owner or registrant of the vehicle, the trial court
held that the business did not have an insurable interest in the vehicle. The court likewise
concluded that because Booker owned and registered but did not personally insure the vehicle, he
2
Booker does not challenge the trial court’s order dismissing his claim against Joseph Jones-
Olbrys, Jr. for failure to serve him and diligently pursue the claim.
-3-
and Metro Pain Clinic, as his assignee, were precluded from recovering PIP benefits under MCL
500.3113(b).
The trial court granted Beydoun and Safeway’s joint motion for summary disposition partly
on the grounds that they did not have a “special relationship” with Booker that required them to
advise him regarding the adequacy of the commercial policy’s coverage. The trial court also
granted summary disposition to Grand Central after finding that no agency relationship existed
between Grand Central and Beydoun and Safeway and no special relationship existed between
Grand General and Booker.
II. ANALYSIS
Booker’s position, both below and on appeal, is relatively simple: he maintains that he is
entitled to PIP benefits from some entity. Primarily, he contends that he is entitled to PIP benefits
from Hartford because it insured the vehicle he owned and was driving when he was involved in
the accident. Alternatively, he argues that he is entitled to PIP benefits from Home-Owners
because he lived with his sister who had a Home-Owners automobile-insurance policy. Metro
Pain Clinic generally agrees with Booker’s position. Conversely, both insurers argue that Booker
is precluded from recovering PIP benefits because his company, Booker Handyman Services, was
the only “named insured” for the vehicle he owned and was driving at the time of the accident.
They also argue Booker Handyman Services did not have an insurable interest in that vehicle, and,
therefore, that the Hartford policy is void. The trial court agreed with the insurers’ arguments. We
do not.3
A. DUTY TO MAINTAIN NO-FAULT SECURITY
We will first address the trial court’s ruling that Booker, and by extension Metro Pain
Clinic, were precluded from obtaining PIP benefits because Booker did not personally maintain
security for the vehicle involved in the accident.
3
We review de novo a trial court’s decision to grant or deny a motion for summary disposition.
See Maiden v Rozwood, 461 Mich. 109, 118; 597 NW2d 817 (1999). Although some of the
defendants cited both MCR 2.116(C)(8) and (C)(10) in their motions, all of the parties, and
presumably the trial court, relied on evidence beyond the pleadings. Consequently, we will treat
the motions as having been granted under subrule (C)(10). See Krass v Tri-Co Security, Inc, 233
Mich. App. 661, 664-665; 593 NW2d 578 (1999). Summary disposition should be granted under
MCR 2.116(C)(10) if, except as to the amount of damages, there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law. Babula v Robertson, 212
Mich. App. 45, 48; 536 NW2d 834 (1995). A court must consider the pleadings, affidavits,
depositions, admissions, and any other documentary evidence submitted by the parties, and view
that evidence in the light most favorable to the nonmoving party to determine if a genuine issue of
material fact exists. MCR 2.116(G)(5); Maiden, 461 Mich. at 118-120.
-4-
Michigan’s no-fault act requires that “the owner or registrant of a motor vehicle required
to be registered in this state . . . maintain security for payment of benefits under personal protection
insurance and property protection insurance as required under this chapter, and residual liability
insurance.” MCL 500.3101(1). Per MCL 500.3113(b), if the owner or registrant of a vehicle
involved in the accident fails to maintain the required security, then he or she is barred from
recovery of PIP benefits. Home-Owners and Hartford argue that MCL 500.3113(b) applies in this
case because Booker, as the owner or registrant of the vehicle at issue, failed to personally maintain
security as required by MCL 500.3101(1).
The Michigan Supreme Court rejected this argument in Dye v Esurance Prop & Cas Ins
Co, 504 Mich. 167, 173; 934 NW2d 674 (2019),4 where it held that “an owner or registrant of a
motor vehicle involved in an accident is not excluded from receiving no-fault benefits when
someone other than that owner or registrant purchased no-fault insurance for that vehicle because
the owner or registrant of the vehicle may ‘maintain’ the insurance coverage required under the
no-fault act even if he or she did not purchase the insurance.” In other words, “an owner or
registrant of a motor vehicle is not required to personally purchase no-fault insurance for his or
her vehicle in order to avoid the statutory bar to PIP benefits,” so long as someone maintains no-
fault insurance for the vehicle. Id. at 172-173.
Thus, Booker was not required to personally insure the vehicle. He satisfied MCL
500.3101(1) by procuring insurance for the vehicle through Booker Handyman Services and was
therefore not precluded by MCL 500.3113(b) from recovering PIP benefits.
B. INSURABLE INTEREST
We next address the trial court’s determination that Booker Handyman Services did not
have an insurable interest in the vehicle.
“[U]nder Michigan law, an insured must have an insurable interest to support the existence
of a valid automobile liability insurance policy.” Morrison v Secura Ins, 286 Mich. App. 569, 572;
781 NW2d 151 (2009) (quotation marks and citation omitted). This requirement “arises out of the
venerable public policy against ‘wager policies’; which . . . are insurance policies in which the
insured has no interest, and they are held to be void because such policies present insureds with
unacceptable temptation to commit wrongful acts to obtain payment.” Id. (citation omitted).
Importantly, “an insurable interest need not be in the nature of ownership, but rather can be any
kind of benefit from the thing so insured or any kind of loss that would be suffered by its damage
or destruction.” Id. at 572-573 (quotation marks and citation omitted). Clearly, this language—
“any kind of benefit . . . or any kind of loss”—is broad. Id. (emphasis added).
4
Dye was decided after the trial court issued its opinions and orders granting summary disposition,
but Supreme Court decisions are generally “given full retroactive effect,” Bezeau v Palace Sports
& Entertainment, Inc, 487 Mich. 455, 462; 795 NW2d 797 (2010), and no parties argues against
the retroactive application of Dye in this case.
-5-
Here, the trial court held that Booker Handyman Services did not have an insurable interest
because Booker, not the business, owned the vehicle. Because ownership and insurable interest
are not synonymous concepts, the trial court’s analysis did not accurately reflect Michigan law.
AB Petro Mart, Inc v Ali T Beydoun Ins Agency, Inc, 317 Mich. App. 290, 299; 892 NW2d
460 (2016), is instructive and analogous to present circumstances. In that case, an automobile
crashed into a gas pump at a gas station owned by a sole proprietor through AB Petro Mart, Inc.
(collectively “the plaintiffs”). Id. at 293. Petro Metro maintained insurance for the gas pumps,
which were owned by the proprietor in his personal capacity. Id. The insurer denied coverage,
and the trial court dismissed the plaintiffs’ claim to enforce the policy, holding that Petro Mart did
not have an insurable interest in the gas pumps. Id. at 295. This Court reversed that ruling,
explaining that Petro Mart’s lack of ownership or leasehold interest in the gas pumps did not, by
itself, “preclude finding an insurable interest.” Id. at 299-300. We explained that “the salient
inquiry to answer when determining whether an insurable interest exists revolves around whether
the insured would suffer a direct, pecuniary loss from the property’s destruction.” Id. at 300. We
answered that question affirmatively in that case for the following reasons:
Clearly, Petro Mart would gain some advantage by the continuing existence of the
gas pumps and, conversely, would suffer some loss or disadvantage by the
destruction of the pumps. Importantly, this is not an instance where the loss Petro
Mart suffered was “indirect or sentimental”; instead, because Petro Mart generated
income from the sale of gasoline through the use of the pumps, the loss of one of
those gas pumps resulted in a “direct and actual” pecuniary loss. The fact that Petro
Mart was not financially responsible for repairing any damage to the pumps is not
controlling—it still had a pecuniary interest because of the commercial business it
operated. We note that while any lost business profits appear to not be recoverable
under the insurance policy, this fact is immaterial in determining whether Petro
Mart had an insurable interest in the gas pumps themselves. Therefore, because
Petro Mart had a clear, substantial, and direct pecuniary interest in the pumps, we
hold that it had an insurable interest in the damaged gas pump. . . . [Id. at 300-301.]
In this case, although Booker Handyman Services was not the titled owner of the vehicle
involved in the accident, the business had a pecuniary interest in the vehicle. Booker testified at
deposition that he used the vehicle for “[c]arrying the tools around or the cleaning products in the
trunk of it” and used it for business purposes “[m]aybe four times a week.” His testimony was
very clear: “I used the Cavalier on all the jobs.” He also testified that “[i]t was purchased for me
and the business,” i.e., “[f]or business and personal use.” Given this testimony, it is apparent that
Booker Handyman Services stood to gain by the continued existence of the vehicle and,
conversely, would suffer some loss or disadvantage by its destruction. Moreover, Booker’s
decision to maintain insurance through a corporate entity does not implicate the concerns
associated with wager policies. Booker Handyman Services had no incentive to harm Booker or
the vehicle, and it is Booker rather than the business who will receive payment of PIP benefits
under the policy if Hartford is found to be the highest priority insurer.
The insurers take the position that this Court’s opinion in Corwin v DaimlerChrysler Ins
Co, 296 Mich. App. 242; 819 NW2d 68 (2012), requires the conclusion that Booker Handyman
Services lacked an insurable interest. In that case, the Corwins were injured while driving a motor
-6-
vehicle they leased from Chrysler LLC pursuant to an employee retirement program. Id. at 248-
250. The vehicle was insured by Chrysler Insurance and Chrysler LLC was listed as the named
insured. Id. at 248-249. The policy further provided “that Chrysler Insurance is not responsible
for PIP benefits if the Corwins are entitled to PIP benefits as the named insureds in another policy.”
Id. at 247. The Corwins had insurance policies covering a separate vehicle and motor home, but
neither insurer had paid PIP benefits when the Corwins brought suit against Chrysler. Id. at 250.
We held that reformation of the Chrysler policy to include the Corwins as named insureds
was required for two reasons. Following State Farm Mut Auto Ins Co v Enterprise Leasing Co,
452 Mich. 25; 549 NW2d 345 (1996), we determined that the Chrysler policy “violates the intent
of the no-fault act by shifting primary liability for no-fault coverage.” Corwin, 296 Mich. App. at
262. That is, the policy allowed Chrysler Insurance to avoid payment of benefits whenever the
insured was a named insured in a different no-fault policy. Id. at 262-263. We also held that
reformation was required because Chrysler LLC and its United States subsidiaries, the named
insureds in the policy, did not have an insurable interest in the leased vehicle. In reaching that
conclusion, we were primarily persuaded by the fact that Chrysler and its subsidiaries were not
owners or registrants of the vehicle at issue. Id. at 258. Specifically, they could not have been
“owners” or “registrants” as that term is statutorily defined in this context. See MCL
500.3101(2)(l)(iii) (“A person that holds the legal title to a motor vehicle or motorcycle, other than
a person engaged in the business of leasing motor vehicles or motorcycles that is the lessor of a
motor vehicle or motorcycle under a lease that provides for the use of the motor vehicle or
motorcycle by the lessee for a period that is greater than 30 days.”) (emphasis added). Because
they could not be owners or registrants of the leased vehicles, we concluded that “Chrysler LLC
and its United States subsidiaries do not have an insurable interest contingent upon ‘personal
pecuniary damage created by the no-fault statute itself.’ ” Id., quoting Clevenger v Allstate Ins
Co, 443 Mich. 646, 661; 505 NW2d 553 (1993). Corwin additionally emphasized that Chrysler
and its subsidiaries could not “suffer accidental bodily injury.” Id. at 259.
Significantly, after determining that there was no insurable interest supporting the policy,
the Corwin Court did not simply void the policy, which is the result advocated by the insurers here.
Rather, the Court relied on the lack of an insurable interest as a reason to reform the policy: “The
Chrysler Insurance policy must be reformed to be compatible with public policy so that there is an
insurable interest belonging to the named insured.” Id. at 260. Thus, if the insurers are correct
that Booker Handyman Services did not have an insurable interest in the vehicle, Corwin would
support plaintiffs’ request for reformation of the policy, which will be discussed below.
In any event, we conclude that Corwin is sufficiently distinguishable from this case. The
relationship at issue in Corwin, i.e., the relationship between Chrysler, its subsidiaries and their
many lease-holding customers, is quite different from the relationship at issue here, i.e., a
relationship between an incorporated handyman-services business and its owner and sole
shareholder. Chrysler did not benefit from the use of its leased vehicles or its lease-holders’
“health and well-being,” id. at 259, nor suffer a loss from the damage to either. The same cannot
be said of Booker Handyman Services with respect to its sole owner and the vehicle it relied on
for “all the jobs.” Further, as discussed in relation to AB Petro, the business had a pecuniary
-7-
interest in the vehicle itself.5 Accordingly, Corwin does not compel the conclusion that Booker
Handyman Services lacked an insurable interest in the vehicle such that the policy must be voided
on public policy grounds. We believe that AB Petro is the more analogous decision and strongly
supports the conclusion that Booker’s business had a sufficient interest to uphold the policy.
In sum, because there was no-fault insurance covering the vehicle owned by Booker, and
because the purchaser of that coverage, Booker Handyman Services, had an insurable interest in
the vehicle, Booker was entitled to PIP benefits for the injuries he sustained. The trial court erred
by ruling otherwise and granting summary disposition on those grounds.
C. PRIORITY
Because Booker is entitled to PIP coverage, the question becomes which insurer—Home-
Owners or Hartford—is in priority to pay PIP benefits. See Dye, 504 Mich. at 190 n 61 (explaining
the difference between “coverage under the no-fault act [and] priority under the no-fault act.”).
“When determining the priority of insurers liable for no-fault PIP benefits, courts must
examine MCL 500.3114.” Corwin, 296 Mich. App. at 254. “Generally, pursuant to MCL
500.3114(1), a person must seek [PIP] benefits from his or her own insurer.” Titan Ins Co v
American Country Ins Co, 312 Mich. App. 291, 298; 876 NW2d 853 (2015). MCL 500.3114(1)
provides that “[e]xcept as provided in subsections (2), (3), and (5), a personal protection insurance
policy described in section 3101(1) applies to accidental bodily injury to the person named in the
policy, the person’s spouse, and a relative of either domiciled in the same household, if the injury
arises from a motor vehicle accident.”
The trial court granted Home-Owners summary disposition partly because it concluded
that Booker “must seek no-fault benefits from his own insurer, Defendant Hartford.” However, as
written, the Hartford policy as applied to Booker does not fall within MCL 500.3114(1). “The
phrase ‘the person named in the policy’ is synonymous with the term ‘the named insured,’ ”
Corwin, 296 Mich. App. at 255, which Booker undisputedly is not.
Plaintiffs argue that equitable reformation of the Hartford policy to include Booker as a
named insured is required because the business, a corporate entity, could never be injured in a
motor-vehicle accident, and so the policy coverage is illusory. This is similar to the argument that
prevailed in Corwin, 296 Mich. App. at 262-263. Like Chrysler Insurance, Hartford takes the
5
We also note that while Chrysler and its subsidiaries were precluded from being “owners” of the
vehicle pursuant to MCL 500.3101(2)(l)(iii), Beydoun and Safeway argue that Booker Handyman
Services satisfies the definition of owner provided in MCL 500.3101(2)(l)(i): “A person renting a
motor vehicle or having the use of a motor vehicle, under a lease or otherwise, for a period that is
greater than 30 days.” Home-Owners also suggests that the business was a constructive owner of
the vehicle under this definition for purposes of determining priority. We need not decide this issue
because we conclude that Corwin is distinguishable even if Booker Handyman Services was not
an owner of the vehicle. But the parties may raise this argument on remand when addressing
priority.
-8-
position that its policy would never provide any coverage to Booker.6 Home-Owners, however,
argues that reformation is not necessary because the Hartford policy does cover Booker’s claim
pursuant to MCL 500.3114(3), which provides:
(3) An employee, his or her spouse, or a relative of either domiciled in the
same household, 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.
Home-Owners argues that MCL 500.3114(3) applies in this case because Booker was self-
employed. See Celina Mut Ins Co v Lake States Ins Co, 452 Mich. 84; 549 NW2d 834 (1996).
MCL 500.3114(3)’s applicability to this case was not raised or addressed in the trial court given
the court’s ruling that plaintiffs were precluded from recovering PIP benefits, and only Home-
Owners briefed this issue on appeal.
Although “we might exercise our discretion to review the issue as a question of law for
which the necessary facts have been presented, this Court should decline to do so when it would
require us to construct and evaluate our own arguments.” Aguirre v Dep’t of Corrections, 307
Mich. App. 315, 326; 859 NW2d 315 (2014). Accordingly, we remand this matter for additional
argument and a decision from the trial court. See id. Specifically, the parties should address and
the trial court should first determine whether Hartford has priority pursuant to MCL 500.3114(3).
If the court finds that this subsection applies, then the policy is not an illusory contract and
reformation would not be warranted. If the court concludes that MCL 500.3114(3) does not apply,
however, then it must consider whether reformation of the Hartford policy is equitable under the
circumstances of this case. Reformation of the policy to include Booker as a named insured would
result in Hartford being first in priority under MCL 500.3114(1). If the court declines to reform
the policy, then Home-Owners would have priority over Booker’s claim for PIP benefits because
it insured Booker’s resident relative at the time of the accident. See MCL 500.3114(1). Given
this possibility, the trial court erred in granting Home-Owners summary disposition on the grounds
that it could never be the highest priority insurer.
D. BEYDOUN, SAFEWAY AND GRAND GENERAL
Lastly, Booker argues that Beydoun and Safeway should not have been granted summary
disposition because they had a special relationship with Booker or Booker Handyman Services
6
Hartford maintains that the policy’s coverage is not illusory “because PIP coverage in the Policy
would have been available in certain circumstances had the insured, Arthur Booker Handyman
Services, Inc., been a viable corporation and actually ‘got[ten] off the ground.’ ” This statement
refers to Booker’s deposition testimony in which he agreed that his business did not “get off the
ground,” although his testimony makes clear that the business had customers. Hartford does not
elaborate on the “certain circumstances” in which there would be coverage. In any event, neither
the policy nor the no-fault act conditions coverage on the degree to which the business has proven
successful.
-9-
and a duty to correctly advise him regarding the coverage of Hartford’s commercial insurance
policy. We need not address this issue because Booker’s negligence claims against Beydoun and
Safeway are rendered moot by our ruling that he is entitled to PIP benefits from one of the insurers.
See New Freedom Mtg Corp v Glove Mtg Corp, 281 Mich. App. 63, 69-70; 761 NW2d 832 (2008),
overruled in part on other grounds Bank of America, NA v First American Title Ins Co, 499 Mich.
74; 878 NW2d 816 (2016) (“[I]f there are no damages, it is appropriate to grant summary
disposition on fraud, misrepresentation, breach of contract, and negligence claims.”). Further,
while Booker’s brief on appeal does not address the trial court’s decision to grant Grand General’s
motion for summary disposition, this claim is also moot in light of our rulings.
III. CONCLUSION
We reverse the trial court’s opinions and orders granting Home-Owners’ and Hartford’s
motions for summary disposition and remand this matter for further proceedings to determine
which of the two insurers is first in priority. We affirm the trial court’s grant of summary
disposition to Beydoun, Safeway and Grand General, but on the grounds of mootness, not on the
merits.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
/s/ Michael J. Riordan
/s/ Douglas B. Shapiro
/s/ Amy Ronayne Krause
-10-