Richard Finch Jr v. Russell Keith Gewin ( 2023 )

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
RICHARD FINCH, JR., UNPUBLISHED
October 5, 2023
Plaintiff-Appellee,
v No. 360189
Wayne Circuit Court
RUSSELL KEITH GEWIN, LANDSTAR LC No. 20-016580-NI
RANGER, INC., LLOYD’S UNDERWRITERS AT
LONDON SPONSORING SYNDICATES,
CERTAIN UNDERWRITERS LLOYD’S LONDON
SUBSCRIBING TO CERTIFIED NO.
NAGN04404018-12, OLD REPUBLIC
INSURANCE COMPANY, MICHIGAN
ASSIGNED CLAIMS PLAN, and MICHIGAN
AUTOMOBILE INSURANCE PLACEMENT
FACILITY,
Defendants-Appellees,
and
DEPARTMENT OF LABOR AND ECONOMIC
OPPORTUNITY/UNEMPLOYMENT
INSURANCE AGENCY,
Appellant.
RICHARD FINCH, JR.,
Plaintiff-Appellant,
v No. 362466
Wayne Circuit Court
RUSSELL KEITH GEWIN, LANDSTAR LC No. 20-016580-NI
RANGER, INC., LLOYD’S UNDERWRITERS AT
-1-
LONDON SPONSORING SYNDICATES,
CERTAIN UNDERWRITERS LLOYD’S LONDON
SUBSCRIBING TO CERTIFIED NO.
NAGN04404018-12, OLD REPUBLIC GENERAL
INSURANCE COMPANY CORPORATION, OLD
REPUBLIC INSURANCE COMPANY,
MICHIGAN ASSIGNED CLAIMS PLAN, and
MICHIGAN AUTOMOBILE INSURANCE
PLACEMENT FACILITY,
Defendants-Appellees.
Before: SHAPIRO, P.J., and M.J. KELLY and CAMERON, JJ.
PER CURIAM.
In these consolidated appeals1 involving disputes related to the no-fault act, MCL 500.3101
et seq., and the Michigan Employment Security Act (MESA), MCL 421.1 et seq., in Docket
No. 360189, appellant, the Department of Labor and Economic Opportunity/Unemployment
Insurance Agency (UIA), appeals by leave granted2 the trial court’s order compelling the UIA to
provide discovery in the present case. In Docket No. 362466, plaintiff, Richard Finch, Jr., appeals
as of right the trial court’s orders granting summary disposition in favor of the Lloyd’s of London
defendants,3 third-party defendants, Russell Keith Gewin and Landstar Ranger, Inc., and
defendants, the Michigan Assigned Claims Plan (MACP) and the Michigan Automobile Insurance
Placement Facility (MAIPF). For the reasons stated in this opinion, we affirm the trial court’s
order compelling the UIA to provide discovery and the grant of summary disposition to MACP
and MAIPF. However, we reverse the trial court’s decision to grant summary disposition to
Lloyd’s of London, Gewin, and Landstar.
I. BACKGROUND
This case arose out of a dispute regarding insurance coverage after plaintiff alleged he was
injured while unloading a 2003 Chevrolet Express Passenger Van on December 27, 2019.
Plaintiff’s fiancée, Jennifer Madole, was the titled owner of the van, but plaintiff testified that he
was the only person who actually used it and that he never used it as a personal vehicle. Plaintiff
drove the van to deliver packages for Flexible Workforce, the company for which he worked under
1
Finch v Gewin, unpublished order of the Court of Appeals, entered October 25, 2022 (Docket
Nos. 360189 and 362466).
2
Finch v Gewin, unpublished order of the Court of Appeals, entered July 1, 2022 (Docket
No. 360189).
3
We will we refer to Lloyd’s Underwriters at London Sponsoring Syndicates and Certain
Underwriters Lloyd’s Subscribing to Certified No. NAGN04404018-12 collectively as “Lloyd’s
of London.”
-2-
an independent contractor agreement. Lloyd’s of London offered commercial liability insurance
coverage to independent contractors working for Flexible Workforce. The policy provided in-
service liability coverage, uninsured/underinsured coverage, and “minimum statutory Personal
Injury Protection benefits the ‘insured’ is legally entitled to recover as provided by applicable state
law.” The application for coverage stated that the independent contractor “must continue to
maintain their personal policy for vehicle registration purposes and physical damage coverage.”
Plaintiff applied for and obtained a policy from Lloyd’s of London in September 2019, which
listed plaintiff as the insured and the van as a covered vehicle. Neither plaintiff nor Madole
maintained a personal no-fault policy.
On December 27, 2019, plaintiff was delivering a package to the MGM Grand Casino in
Detroit, Michigan. Plaintiff alleged that Gewin, who was leaving the loading dock of the MGM
Grand after delivering goods from his Mack semi-truck, negligently struck the open door of
plaintiff’s van. Plaintiff stated that he was reaching for the package to deliver to the MGM Grand,
which was between the two front seats of the van, when he was pinned by the front driver-side
door of the van when it was struck by Gewin’s semi-truck. Plaintiff asserted that he was injured
and taken to the hospital by ambulance after he was freed from the door. Plaintiff submitted claims
for no-fault benefits, including coverage for loss of wages and replacement services, to Lloyd’s of
London. Plaintiff claims that he has been unable to work because of his injuries.
Initially, Lloyd’s of London paid plaintiff’s benefits, but eventually stopped after a
coverage dispute arose in December 2020. Concerned that this might occur, plaintiff applied for
coverage with the MACP and MAIPF in November 2020. In his application, plaintiff stated he
was unable to work because of injuries he suffered during the accident. Before the MACP and
MAIPF completed their investigation into potentially covering plaintiff, plaintiff filed the instant
lawsuit. In Counts I through III of the complaint, plaintiff brought third-party negligence claims
against Gewin and Landstar. More specifically, plaintiff accused Gewin of negligently driving his
semi-truck; asserted Landstar was liable for Gewin’s negligence under theories of owners’ or
vicarious liability; and claimed Landstar negligently hired, retained, and supervised Gewin.
Plaintiff sought first-party no-fault benefits from Lloyd’s of London, asserting he was injured
while unloading a vehicle covered by Lloyd’s of London. Plaintiff alleged Lloyd’s of London
unreasonably failed to pay for benefits arising out of his injuries, including wage loss, replacement
services, and medical care. Plaintiff alternatively asserted that the MACP and MAIPF should
provide coverage because there was no other identifiable no-fault insurance provider involved.4
During the discovery process, plaintiff participated in a deposition, during which he
testified he applied for and received unemployment benefits in 2020 and 2021. This testimony led
to Lloyd’s of London submitting a subpoena to the UIA for production of documents it had with
respect to plaintiff’s application for, and receipt of, unemployment benefits. Lloyd’s of London
obtained a signed release from plaintiff, who agreed he was waiving any protections he had under
4
Plaintiff also sued Old Republic General Insurance Company Corporation and Old Republic
Insurance Company, which he alleged provided insurance coverage for Gewin’s semi-truck. The
Old Republic defendants were dismissed from the litigation early in the proceedings, and plaintiff
has not challenged that order in this appeal.
-3-
statute to the confidentiality of the documents. The UIA declined to provide the documentation,
citing MCL 421.11(b)(1)(iii), which did not permit it to provide discovery in a case in which the
UIA was not a party. Lloyd’s of London moved the trial court to compel the UIA to produce the
requested documents, primarily relying on MCL 421.11a, which codified an exception to MCL
421.11(b)(1)(iii), when a claimant testifies voluntarily in separate litigation about representations
they made to the UIA. Lloyd’s of London also relied on plaintiff’s signed waiver of his statutory
rights. The trial court ultimately agreed with Lloyd’s of London and entered an order compelling
the UIA to produce the requested documents. The UIA applied for leave to appeal that decision
of the trial court, which we granted.
Lloyd’s of London moved for summary disposition under MCR 2.116(C)(10), arguing that
the commercial policy provided to plaintiff was not a no-fault policy and should not be read as one
because the application required plaintiff to maintain his own personal coverage, which he failed
to do. Because the policy was not a no-fault policy, it was to be applied as would any other
contract, and plaintiff was not covered under the policy because it only covered an individual
“while driving,” and plaintiff was not driving the van at the time of the accident. Rather, the van
was parked and plaintiff was outside.
Gewin and Landstar filed a concurrence with Lloyd’s of London’s motion for summary
disposition, which included a claim that, if the trial court agreed with Lloyd’s of London’s position
regarding a lack of no-fault coverage, then plaintiff was barred from obtaining third-party damages
under the exclusion in MCL 500.3135(2)(c). Gewin and Landstar argued summary disposition
was warranted in their favor under MCR 2.116(I)(1). Similarly, the MACP and MAIPF filed a
response to Lloyd’s of London’s motion for summary disposition, arguing that, regardless of
whether the trial court concluded the policy provided by Lloyd’s of London was a no-fault policy,
the MACP and MAIPF were entitled to summary disposition. This was because plaintiff was
barred from coverage either as a result of a higher priority no-fault insurer or because he failed to
maintain the appropriate securities under the no-fault act. The MACP and MAIPF also moved for
summary disposition on the basis that plaintiff committed a fraudulent insurance act in his
application for benefits.
In response, plaintiff argued that Michigan law and public policy required his insurance
policy with Lloyd’s of London to either be read in accordance with, or reformed to comply with,
the no-fault act. Upon doing so, the language in the policy that would result in plaintiff’s injuries
lacking coverage would no longer be applicable. Pertinently, the no-fault act does not permit an
automobile insurance policy to provide personal protection insurance (PIP) benefits only when a
vehicle is being driven.
The trial court considered the various motions for summary disposition, and ultimately
concluded summary disposition was warranted in favor of Lloyd’s of London, Gewin, Landstar,
the MACP, and the MAIPF. The trial court entered written orders memorializing those decisions,
and the appeal in Docket No. 362466 followed.
-4-
II. DOCKET NO. 360189
The UIA argues that the trial court abused its discretion by granting Lloyd’s of London’s
motion to compel production of documents held by the UIA. We disagree.5
“Michigan follows an open, broad discovery policy that permits liberal discovery . . . .”
Micheli v Mich Auto Ins Placement Facility, 340 Mich App 360, 367; 986 NW2d 451 (2022)
(quotation marks and citation omitted; alteration in original). “[A] party is permitted to obtain
discovery regarding any matter, not privileged, which is relevant to the subject matter involved in
the pending action[.]” Sarkar v Doe, 318 Mich App 156, 175; 897 NW2d 207 (2016) (quotation
marks, citation, second alteration in original), citing MCR 2.302(B)(1). There is no dispute in this
case that the requested evidence was relevant and generally discoverable if no statutory privilege
existed.
There are instances when a statute bars discovery of certain documents, which must be
enforced absent an exception. Johnson v Detroit Med Ctr, 291 Mich App 165, 168-169; 804
NW2d 754 (2010). MCL 421.11(b)(1) provides in relevant part:
(b)(1) Information obtained from an employing unit or individual pursuant
to the administration of this act and determinations as to the benefit rights of any
individual are confidential . . . . However, all of the following apply:
* * *
(iii) Except as provided in this act, the information and determinations must
not be used in any action or proceeding before any court or administrative tribunal
unless the unemployment agency is a party to or a complainant in the action or
proceeding, or unless used for the prosecution of fraud, civil proceeding, or other
5
“This Court reviews for an abuse of discretion a trial court’s decision on a motion to compel
discovery.” In re Estate of Seybert, 340 Mich App 207, 210; 985 NW2d 874 (2022). “A trial
court abuses its discretion when its decision falls outside the range of principled outcomes.”
Micheli v Mich Auto Ins Placement Facility, 340 Mich App 360, 367; 986 NW2d 451 (2022)
(quotation marks and citation omitted). “However, whether production of requested documents is
barred by statute is a question of law that we review de novo.” Johnson v Detroit Med Ctr, 291
Mich App 165, 166-167; 804 NW2d 754 (2010). “A trial court necessarily abuses its discretion
when it makes an error of law.” Micheli, 340 Mich App at 367 (quotation marks and citation
omitted).
Questions of statutory interpretation are reviewed de novo. Saugatuck Dunes Coastal
Alliance v Saugatuck Twp, 509 Mich 561, 577; 983 NW2d 798 (2022). The goal when interpreting
statutes is to discern the Legislature’s intent, the most reliable indicator of which is the statute’s
language. Baurer v Saginaw Co, 332 Mich App 174, 192; 955 NW2d 553 (2020). “Statutes must
be construed reasonably, keeping in mind the purpose of the act, and to avoid absurd results.” Id.
at 193.
-5-
legal proceeding in the programs indicated in subdivision (2).[6] [MCL
421.11(b)(1)(iii).]
In Storey v Meijer, Inc, 431 Mich 368, 376; 429 NW2d 169 (1988), the Supreme Court concluded
that MCL 421.11(b)(1) “clearly and unambiguously prohibits the use of [UIA] information and
determinations in subsequent civil proceedings unless the [UIA] is a party or complainant in the
action.”
However, MCL 421.11a, which was added to MESA by 2012 PA 422, “sets forth an
exception” to MCL 421.11(b)(1) and the rule announced in Storey. Bodnar v St John Providence,
Inc, 327 Mich App 203, 232; 933 NW2d 363 (2019). MCL 421.11a states: “An individual who
testifies voluntarily before another body concerning representations the individual made to the
unemployment agency pursuant to the administration of this act waives any privilege under [MCL
421.11] otherwise applying to the individual’s representations to the unemployment agency.” In
Bodnar, we held that, for purposes of MCL 421.11a, an affidavit submitted by the defendant’s
human resource manager in support of its motion for summary disposition constituted “voluntary
testimony submitted before a judicial body” that waived the privilege under MCL 421.11(b)(1)
with respect to documents relied on by the plaintiffs concerning unemployment proceedings before
the UIA. See Bodnar, 327 Mich App at 232-233.
The parties dispute whether MCL 421.11a applies in this case, and thus whether plaintiff
waived any protections he might have had under MCL 421.11(1)(b)(iii). Lloyd’s of London
primarily argues that plaintiff’s deposition testimony concerning his representations to the UIA
qualified as testimony “voluntarily” offered before another body because plaintiff is the party who
initiated this action, not a defendant who was obliged to participate and testify against his will.
Relying on a legislator’s memorandum to several other legislators, the UIA contends that the
Legislature intended for MCL 421.11a to operate only in “subsequent proceedings between an
employee and employer”—i.e., the parties to the original UIA proceedings. However, given the
text of MCL 421.11a, we see no basis to consult legislative history,7 and even if we were so
inclined, a single memorandum offers little guidance and we remain skeptical that the UIA’s view
of the statute is correct. Having said that, it is clear that we need not decide this issue because we
agree with Lloyd’s of London’s alternative argument that plaintiff explicitly waived any privilege
concerning the subpoenaed records by executing the release form that Lloyd’s of London had
submitted to the UIA with the subpoena.
As explained by this Court, “[a] waiver is the intentional and voluntary relinquishment of
a known right.” Home-Owners Ins Co v Perkins, 328 Mich App 570, 585; 939 NW2d 705 (2019)
(quotation marks and citation omitted). “[A] valid waiver may be shown by express declarations
or by declarations that manifest the parties’ intent and purpose, or be an implied waiver, evidenced
6
This is a reference to MCL 421.11(b)(2), which is a list of public-benefits programs, both state
and federal.
7
“[T]he legislative history of a statute is relevant to the statute’s meaning only where the statute
is ambiguous.” Rouch World, LLC v Dep’t of Civil Rights, 510 Mich 398, 430; 987 NW2d 501(2022). .
-6-
by a party’s decisive, unequivocal conduct reasonably inferring the intent to waive.” Id. (quotation
marks and citation omitted; alteration in original). The person or entity to whom a privilege
belongs can waive the privilege. Landin v Healthsource Saginaw, Inc, 305 Mich App 519, 535;
854 NW2d 152 (2014).
The parties dispute whether the protections afforded by MCL 421.11(b)(1) are meant to
protect the claimant or the UIA. But when reading MCL 421.11(b)(1)(iii) together with MCL
421.11a, it becomes clear that, in situations like the present case, the statute was meant to protect
claimants, not the UIA.8 See People v Anderson, 330 Mich App 189, 197; 946 NW2d 825 (2019)
(“Statutes that address the same subject or share a common purpose are in pari materia and must
be read together as a whole.”) (quotation marks and citation omitted). Under MCL 421.11a, under
certain circumstances, a claimant automatically waives any privilege he had under MCL 421.11.
By contrast, the relevant statutes make no reference to a waiver of privilege by the UIA. Simply
put, if MCL 421.11(b)(1)(iii) was meant to protect the UIA in any manner, the statutory exception
to the rule would not permit waiver of those protections by a unilateral action of the claimant.
In this case, regardless of whether MCL 421.11a applies, it is entirely undisputed that
plaintiff voluntarily chose to waive any protections he had under MCL 421.11(b)(1)(iii) by signing
an authorization for the UIA to produce documents requested by Lloyd’s of London. The release
indicated plaintiff was aware the documents would be going to Lloyd’s of London’s attorney, and
cited the purpose for the release as “discovery in a civil lawsuit.” Plaintiff indicated the UIA
should release “[a]ll information on file from Q4 2019 to Q3 2021,” and he signed the document
on August 31, 2021. Further, when the UIA and Lloyd’s of London were litigating this issue,
plaintiff did not make any attempt to assert his privilege under MCL 421.11(b)(1)(iii).
Although the MESA contains a specific provision regarding an implied waiver by a
claimant, i.e., MCL 421.11a, the parties have not identified a similar statutory subsection regarding
an express waiver. Nevertheless, the Legislature’s acknowledgment in MCL 421.11a that a
claimant can impliedly waive any and all of their privileges under MCL 421.11 necessarily means
a claimant can expressly waive those same rights. It would be absurd to allow a claimant’s
statements to be used in future litigation because of a potentially accidental disclosure in other
litigation but not when the claimant expressly approves of using those statements in the case at
issue. See Dep’t of Transp v Riverview-Trenton R Co, 332 Mich App 574, 609; 958 NW2d 246(2020) (“[T]his Court must . . . avoid interpreting such language in an absurd or illogical way.”).
Thus, with respect to the facts of this case, in which plaintiff undisputedly and expressly waived
any privileges under MCL 421.11, the UIA has not identified any legal grounds to object to the
8
We express no opinion whether the statute might protect others, such as other parties in the claims
for unemployment benefits, like an employer. However, for the purposes of this appeal, the only
relevant person is plaintiff, who was a claimant with the UIA.
-7-
subpoena. Consequently, the trial court did not abuse its discretion when it compelled the UIA to
produce the documents requested.9
III. DOCKET NO. 362466
Plaintiff challenges the trial court’s orders granting summary disposition in favor of
Lloyd’s of London, Gewin, Landstar, the MACP, and the MAIPF. We affirm the dismissal of the
MACP and MAIPF, but reverse the grant of summary disposition to Lloyd’s of London, Gewin,
and Landstar.
A. LLOYD’S OF LONDON
Plaintiff first argues that the trial court improperly granted summary disposition in favor
of Lloyd’s of London. The trial court relied on the policy language defining “insured” as “the
‘insured’ while driving a ‘scheduled vehicle,’ ” and concluded that plaintiff was disqualified from
receiving PIP benefits under the policy because he was parked and unloading the van rather than
driving at the time he was injured. Plaintiff contends that the trial court erred because, when an
insurer offers a policy providing PIP coverage in Michigan, the terms are governed by the no-fault
act, which does not limit recovery of PIP benefits to injuries suffered “while driving.” We agree.10
As an initial matter, Lloyd’s of London emphasizes that the commercial policy it provided
to plaintiff did not provide full no-fault insurance coverage. That is, the policy only provided PIP
coverage and not the full security required by MCL 500.3101(1). Lloyd’s of London maintains
that no statute or caselaw precludes it from offering only one of the mandatory no-fault coverages.
In Johnson v USA Underwriters, 328 Mich App 223, 239; 936 NW2d 834 (2019), this
Court determined that the sale of “optional coverages without mandatory no-fault coverages, such
9
Given this conclusion, the remaining arguments raised by Lloyd’s of London and the UIA have
been rendered moot, and we decline to consider them. See TM v MZ, 501 Mich 312, 317; 916
NW2d 473 (2018).
10
“This Court [] reviews de novo decisions on motions for summary disposition brought under
MCR 2.116(C)(10).” Pace v Edel-Harrelson, 499 Mich 1, 5; 878 NW2d 784 (2016). A motion
for summary disposition under MCR 2.116(C)(10) “tests the factual sufficiency of the complaint
. . . .” Joseph v Auto Club Ins Ass’n, 491 Mich 200, 206; 815 NW2d 412 (2012). “In evaluating
a motion for summary disposition brought under this subsection, a trial court considers affidavits,
pleadings, depositions, admissions, and other evidence submitted by the parties, MCR
2.116(G)(5), in the light most favorable to the party opposing the motion.” Maiden v Rozwood,
461 Mich 109, 120; 597 NW2d 817 (1999). Summary disposition is proper where there is no
“genuine issue regarding any material fact.” Id. “A genuine issue of material fact exists when
reasonable minds could differ on an issue after viewing the record in the light most favorable to
the nonmoving party.” Auto-Owners Ins Co v Campbell-Durocher Group Painting & Gen
Contracting, LLC, 322 Mich App 218, 224; 911 NW2d 493 (2017) (quotation marks and citation
omitted).
-8-
as personal protection insurance, property protection insurance, and residual-liability insurance,”
does not violate the no-fault act or public policy. In reaching that conclusion with respect to
collision and comprehensive coverage insurance policies, this Court found analogous the sale of
bobtail policies11 and relied on the decision in Integral Ins Co v Maersk Container Service, Co,
Inc, 206 Mich App 325; 520 NW2d 656 (1994), which held that the insured in that case had
properly obtained full coverage through multiple policies consistent with MCL 257.520(j), which
“allows insureds to meet the requirements for motor vehicle liability coverage through more than
one insurance carrier[.]” See Johnson, 328 Mich App at 244-245. In Johnson, we found that
reasoning applicable to optional insurance coverages, id. at 245, and ultimately held that the trial
court erred by reforming the insurance policy in that case to include the mandatory no-fault
coverages. See id. at 232, 247.
In light of Johnson, we decline plaintiff’s request to reform the commercial policy at issue
so as to provide all the coverages mandated by the no-fault act in addition to PIP. However, this
does not alter the statutory requirement that an insurer who sells PIP coverage, even one limited
to certain types of use, e.g., commercial, personal, or bobtail, must still comply with the statutory
requirement that within the relevant use, it must provide benefits for any “accidental bodily injury
arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle.”
MCL 500.3105(1).12 Here, Lloyd’s of London sold a PIP policy applicable to the use of the van
while under commercial dispatch, but rather than providing coverage in that setting based on the
“arising out of” standard, as mandated by statute, it only provided coverage “while driving,” which
explicitly violates the no-fault act. Lloyd’s of London has not cited any caselaw to support its
position that an insurer may contractually negate the statutory “arising out of” standard. The no-
fault act “is the ‘rule book’ for deciding the issues involved in questions regarding awarding [PIP]
benefits.” Meemic Ins Co v Fortson, 506 Mich 287, 302; 954 NW2d 115 (2020), quoting Rohlman
v Hawkeye-Security Ins Co, 442 Mich 520, 524-525; 502 NW2d 310 (1993). Accordingly, the no-
fault act controls when there is a conflict between the language of the policy at issue and the statute.
See Andary v USAA Cas Ins Co, ___ Mich ___, ___; ___ NW2d ___ (2023) (Docket No. 164772);
slip op at 22. See also Memberselect Ins Co v Hartford Accident & Indemnity Co, ___ Mich App
___, ___ (2022) (Docket No. 355326); slip op at 2 (holding that an insurer could not avoid the
statutory PIP requirement that it must pay PIP benefits to the person named in the policy “by
labeling a no-fault policy as ‘commercial[.]’ ”).
To be clear, whether the insured must claim benefits under a commercial PIP policy, a
personal PIP policy, or a bobtail PIP policy, the policy must afford coverage for any injury that
“arises out of” the vehicle’s commercial, personal, or bobtail use, respectively. Because a policy
providing PIP coverage must be read in accordance with the PIP provisions of the no-fault act, the
trial court erred by granting summary disposition on the basis of the “while driving” language in
Lloyd’s of London’s policy.
11
A bobtail policy is a policy covering a tractor when it was not hauling a load under dispatch.
12
Plaintiff argued before the trial court that he was entitled to recover PIP benefits under the
parked-vehicle exception, MCL 500.3106(1), which Lloyd’s of London has yet to dispute. We
need not reach this issue because the parties do not raise it on appeal.
-9-
Lloyd’s of London also relies on the statement in the application for coverage that the
insured “must continue to maintain their personal policy for vehicle registration purposes and
physical damage coverage.” “An insurance policy is much the same as any other contract,” and
the application is considered part of the contract. See Dancey v Travelers Prop Cas Co of America,
288 Mich App 1, 8; 792 NW2d 372 (2010) (quotation marks and citation omitted). However,
although Lloyd’s of London emphasizes plaintiff’s failure to maintain a personal policy, it does
not argue that this constituted a substantial breach of the insurance contract such that it could
rescind the contract or otherwise cease performance of its contractual obligations. See Meemic Ins
Co, 506 Mich at 307 (“At common law, a contract might also be rescinded because of a party’s
failure to perform a substantial part of the contract or one of its essential items[.]”) (quotation
marks and citation omitted; alteration in original). Indeed, plaintiff likely would not have been
covered under a personal no-fault policy given the business-use exclusion found in most policies,
see MCL 500.2118(2)(f); Husted v Dobbs, 459 Mich 500, 506; 591 NW2d 642 (1999), and
therefore the failure to maintain a personal policy cannot be deemed substantial or material.
Accordingly, Lloyd’s of London does not identify a legal basis to conclude that plaintiff’s failure
to maintain a personal policy precludes him from recovering under the Lloyd’s policy while
driving under dispatch.13
As an alternative ground for affirmance, Lloyd’s of London relies on the wrongful-conduct
rule. “The wrongful-conduct rule provides that when a plaintiff’s action is based, in whole or in
part, on his own illegal conduct, his claim is generally barred.” Hashem v Les Stanford
Oldsmobile, Inc, 266 Mich App 61, 89; 697 NW2d 558 (2005) (quotation marks and citation
omitted). Lloyd’s of London argues that plaintiff committed wrongful conduct by seeking wage-
loss coverage from Lloyd’s of London while receiving unemployment benefits and weekly income
from Flexible Workforce. Lloyd’s of London also asserts plaintiff engaged in wrongful conduct
by fraudulently receiving a Paycheck Protection Program (PPP) loan during the COVID-19
pandemic. Both of these arguments fail for the same reason—Lloyd’s of London has failed to
identify a causal nexus between plaintiff’s alleged illegal behavior and his damages. Orzel v Scott
Drug Co, 449 Mich 550, 564; 537 NW2d 208 (1995) (“For the wrongful-conduct rule to apply, a
sufficient causal nexus must exist between the plaintiff’s illegal conduct and the plaintiff’s asserted
damages.”). In this case, plaintiff’s damages were caused by Gewin driving his semi-truck into
the door of the van behind which plaintiff was standing, causing plaintiff to be pinned by the door.
Plaintiff’s alleged “wrongful conduct” occurred later, and thus, could not be a cause of plaintiff’s
damages. Id. The wrongful-conduct rule only applies when the illegal activities are a cause of
damages, which is not the case here. Instead, Lloyd’s of London contends the alleged fraud was
a specific reason plaintiff was not entitled to damages at all, not the cause of the damages he
sought. Additionally, Lloyd’s of London has not identified a penal statute plaintiff violated by
obtaining the PPP loan, which is a necessary component for the wrongful-conduct rule to apply.
Id. at 561. Consequently, these alternative arguments for affirmance lack merit.
13
At no time has Lloyd’s of London argued, as an alternative basis for summary disposition, that
MCL 500.3113(b) applies such that plaintiff should be precluded from recovering PIP benefits
under the policy for not maintaining the security required by MCL 500.3101(1). Because this
issue has not been raised or briefed by Lloyd’s of London, we decline to address it.
-10-
B. MACP & MAIPF
Because we conclude that plaintiff is entitled to receive PIP benefits from Lloyd’s of
London in accordance with the no-fault act, his claims against the MACP and MAIPF are moot,
and we need not address whether the trial court erred by granting summary disposition in their
favor. See TM v MZ, 501 Mich 312, 317; 916 NW2d 473 (2018).
C. GEWIN AND LANDSTAR
Plaintiff lastly argues that the trial court erred by granting summary disposition to Gewin
and Landstar on the basis of MCL 500.3135(2)(c). We agree with plaintiff that this statute does
not apply in this case because he was not “operating” the vehicle at the time of the accident.14
While “Michigan’s no-fault act generally abolishes tort liability arising from the
ownership, maintenance, or use of a motor vehicle,” Grange Ins Co of Mich v Lawrence, 494 Mich
475, 490; 835 NW2d 363 (2013), “[a] person remains subject to tort liability for noneconomic loss
caused by his or her ownership, maintenance, or use of a motor vehicle” where “the injured person
has suffered death, serious impairment of body function, or permanent serious disfigurement,”
MCL 500.3135(1). However, under MCL 500.3135(2)(c), “[d]amages must not be assessed in
favor of a party who was operating his or her own vehicle at the time the injury occurred and did
not have in effect for that motor vehicle the security required by section 3101(1) at the time of the
injury occurred.”
14
The trial court granted summary disposition to Gewin and Landstar under MCR 2.116(I)(1), a
decision we review de novo. Wilcox v Wheatley, ___ Mich App ___, ___; ___ NW2d ___ (2022)
(Docket No. 358630); slip op at 2.
[W]hen a court reviews a motion for summary disposition, MCR 2.116(I)(1)
provides that “[i]f the pleadings show that a party is entitled to judgment as a matter
of law, or if the affidavits or other proofs show that there is no genuine issue of
material fact, the court shall render judgment without delay.” [Al-Maliki v Grant,
286 Mich App 483, 485; 781 NW2d 853 (2009).]
This issue turns on a question of statutory interpretation, which we review de novo. Saugatuck
Dunes Coastal Alliance, 509 Mich at 577.
Plaintiff did not properly preserve the “operating” issue by raising it before the trial court.
However, this Court has discretion to overlook the lack of preservation and address an unpreserved
issue when “failure to consider the issue would result in manifest injustice, if consideration is
necessary for a proper determination of the case, or if the issue involves a question of law and the
facts necessary for its resolution have been presented.” Tolas Oil & Gas Exploration Co v Bach
Servs & Mfg, LLC, ___ Mich App ___, ____; ___ NW2d ___ (2023) (Docket No. 359090); slip
op at 3. As noted, this issue turns on statutory interpretation (i.e., a question of law), for which the
necessary facts have been presented. Accordingly, we exercise our discretion to address it.
-11-
Plaintiff contends that MCL 500.3135(2)(c) does not apply to him because he was not
operating the van at the time he was injured.15 The no-fault act does not appear to define the term
“operating,” and the parties have not identified any caselaw interpreting the word as related to the
no-fault act. For their part, Gewin and Landstar attempt to draw a comparison to MCL
500.3113(b), which precludes payment of PIP benefits to a person who “was the owner or
registrant of a motor vehicle or motorcycle involved in the accident with respect to which the
security required by [MCL 500.3101] was not in effect.” Focusing on this statute then permits
Gewin and Landstar to look to MCL 500.3101(1), which states the proper insurance “is only
required to be in effect during the period the motor vehicle is driven or moved on a highway.” A
temporary stop during the course of a delivery, Gewin and Landstar note, does not fall outside of
the “period the motor vehicle is driven or moved on a highway,” as that phrase was defined by this
Court in Shinn v Mich Assigned Claims Facility, 314 Mich App 765, 774-775; 887 NW2d 635(2016).
This argument, of course, ignores the issue presented by plaintiff, which was whether he
was “operating” the van at the time he was injured, as required for the preclusion under MCL
500.3135(2)(c). Indeed, analysis of MCL 500.3101(1) relates to whether a vehicle is required to
have no-fault coverage, while plaintiff insists his argument is entirely independent of that question.
Pertinently, plaintiff contends MCL 500.3135(2)(c) does not bar his claim for third-party damages
from Gewin and Landstar even if his van was required to be properly insured and was not, so long
as he was not operating it when he was injured. We agree with plaintiff’s reading of the statute.
Plaintiff encourages us to turn to the Michigan Vehicle Code, MCL 257.1 et seq., to define
the term “operating,”16 and also refers to dictionary definitions. Under any of these definitions,
and considering the evidence in the light most favorable to plaintiff, plaintiff was not “operating”
the van at the time he was injured. Instead, plaintiff was standing outside of the van and reaching
15
Plaintiff also argues that MCL 500.3135(2)(c) does not apply to him because he was not an
owner of the van. Rather than addressing the specific definitions of an “owner” under the no-fault
act, plaintiff merely claims Madole was the owner because she held the title to the van. While
Madole certainly was an owner of the van, Michigan caselaw is clear there can be more than one
owner of a given vehicle. Abraham v State Farm Mut Auto Ins Co, ___ Mich App ___, ___; ___
NW2d ___ (2022) (Docket No. 356748); slip op at 7. Plaintiff simply does not address whether
he should be considered an owner under MCL 500.3101(3)(l)(i), which defines “owner as “[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.” There does not appear to be any dispute that plaintiff had
use of the subject van for more than 30 days. Indeed, plaintiff explicitly testified that he was the
only person who used the van, he used it whenever he worked, he never had to ask to use it, and
he had the keys to the van. Further, he had been using the van to perform delivery services for
Flexible Workforce for a period greater than 30 days. In short, plaintiff fails to establish a genuine
issue of material fact as to whether he was a constructive owner of the van.
16
Under MCL 257.35a, “ ‘[o]perate’ or ‘operating’ means” either “[b]eing in actual physical
control of a vehicle,” or “[c]ausing an automated motor vehicle to move under its own power in
automatic mode upon a highway or street regardless of whether the person is physically present in
that automated motor vehicle at that time.”
-12-
inside for a package. He was not “in actual physical control” of the van, MCL 257.35a(a), did not
cause the van to move under its own power, MCL 257.35a(b), and had not caused the van to
function. Consequently, according the unambiguous language of MCL 500.3135(2)(c), plaintiff
was not barred from recovering third-party damages. Accordingly, we reverse the trial court’s
order granting summary disposition in favor of Gewin and Landstar.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
/s/ Douglas B. Shapiro
/s/ Michael J. Kelly
/s/ Thomas C. Cameron
-13-