Colin Hoge v. Donald Pace ( 2024 )

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
COLIN HOGE, UNPUBLISHED
October 14, 2024
Plaintiff-Appellee, 9:50 AM
v No. 367523
Wayne Circuit Court
FARM BUREAU GENERAL INSURANCE LC No. 22-004882-NI
COMPANY OF MICHIGAN,
Defendant-Appellant,
CITIZENS INSURANCE COMPANY OF THE
MIDWEST, MICHIGAN ASSIGNED CLAIMS
PLAN, and MICHIGAN AUTOMOBILE
INSURANCE PLACEMENT FACILITY,
Defendants-Appellees,
and
DONALD PACE and KEVIN CAMPBELL,
Defendants.
Before: GADOLA, C.J., and O’BRIEN and MALDONADO, JJ.
PER CURIAM.
In this priority dispute between insurers, defendant-appellant, Farm Bureau General
Insurance Company of Michigan, appeals by leave granted1 the trial court’s order granting the
motion for summary disposition filed by defendant-appellee, Citizens Insurance Company of the
Midwest. In that order, the trial court held that Farm Bureau was the highest priority insurer to
1
Hoge v Pace, unpublished order of the Court of Appeals, issued September 20, 2023 (Docket
No. 367523).
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pay benefits to plaintiff, Colin Hoge, under the no-fault act, MCL 500.3101 et seq. pursuant to
MCL 500.3114(3). That statute provides in relevant part that an employee who is injured while
occupying a motor vehicle owned by the employee’s employer is entitled to personal protection
insurance (PIP) benefits from the insurer of the vehicle. MCL 500.3114(3). Plaintiff was injured
on October 16, 2021, while driving a vehicle owned by MJS Investing, LLC, and insured by Farm
Bureau. The trial court concluded that Farm Bureau was responsible for paying plaintiff’s benefits
under MCL 500.3114(3) because, despite that MJS terminated plaintiff’s employment in August
2021, plaintiff was still MJS’s employee at the time of the accident. While this conclusion was
error, the trial court reached the right result because, for the reasons explained in this opinion, the
requirements of MCL 500.3114(3) were nevertheless satisfied. We accordingly affirm the trial
court’s holding that Farm Bureau is the highest priority insurer for plaintiff’s no-fault benefits
pursuant to MCL 500.3114(3).
I. BACKGROUND
Plaintiff was injured in a multi-vehicle accident on October 16, 2021. Plaintiff was driving
a 2017 Dodge Ram truck owned by MJS. Plaintiff had previously worked as a technician for
Colonial Heating and Cooling, which was wholly owned by MJS. MJS terminated plaintiff’s
employment two months before the accident on August 22, 2021, but this was not the first time
that plaintiff’s employment with MJS was terminated. Since plaintiff started working for MJS in
2017, he had been fired (or placed on leave) and re-hired four times.
Plaintiff testified that, when he worked for MJS, the jobs he worked were assigned through
an app on his phone. He said that he did not get to choose which jobs he was assigned; rather,
MJS scheduled the jobs he was supposed to do. Joshua Pennington, the former owner and current
manager of Colonial Heating and Cooling,2 testified that, when plaintiff worked for MJS, “[h]e
was a W-2” employee, and W-2 forms submitted in the trial court confirm this.
Plaintiff testified that he did not own the Ram truck he was driving at the time of the
accident; plaintiff explained that it was owned by MJS, and that it was entrusted to him during the
course of his employment with MJS. He said “it was a truck that [he] had 24/7,” that it was “always
with” him, that he “was the only one that drove that truck,” and that he kept it at his house when
he was not working. Plaintiff also said that, despite the Ram truck being entrusted to him as part
of his employment with MJS, he used the truck for personal errands “all the time,” and that
Pennington knew about this “and absolutely never said a word to [plaintiff] about it.” Pennington
confirmed that, while plaintiff was working for MJS, Pennington allowed plaintiff to use the Ram
truck for personal errands, saying that he knew it was happening and “it was kind of an unspoken
thing.” Pennington added that plaintiff had an employee handbook, and the handbook said that
company vehicles were not to be used for personal errands, so the understanding was that plaintiff
was not supposed to use the vehicle for personal errands, but if it did, “it’s on [him].”
Pennington was not sure the exact date that plaintiff stopped working for MJS, but
confirmed that plaintiff did not work for MJS at all in September 2021 and October 2021.
Pennington said that plaintiff had “a lot of personal stuff that . . . require[d] him to take a lot of
2
Pennington sold the business in February 2022.
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time off work.” Pennington described how this would cause plaintiff to frequently take extended
periods off work, which made him “hard to keep track of.” Pennington said that the last time
plaintiff was rehired, Pennington wanted to “give him another shot,” but “[i]t didn’t work out”
because plaintiff “was really hard to rely on, as far as when he would show up and things like
that.” That “was kind of the last straw,” according to Pennington.
Plaintiff testified that, around the end of August (presumably of 2021), he was told that
work was going to be slow at MJS and he was encouraged to find his “own stuff.” He added that
he had been self-employed since that time. He later said that he actually worked for MJS until
September 15, 2021. He claimed that, on that day, Pennington told plaintiff “that [Pennington]
was going to sign the truck over to [plaintiff], write off all [plaintiff’s] debts that [he] had with
[Pennington] because [Pennington] was selling his business.” Plaintiff confirmed that, despite not
working for MJS at the time of the accident, the Ram truck he was driving belonged to MJS. He
nevertheless insisted that it “was going to be signed over to” him.
Pennington disputed this. Pennington said that plaintiff wanted to buy the truck from
Pennington, but Pennington knew that this was not realistic because plaintiff had borrowed
$40,000 from Pennington that he “never” got “caught up” on, and plaintiff having the money to
pay off that loan and buy the truck “was probably not going to happen even though, you know,
[plaintiff] said he wanted to.” Pennington flatly denied ever having any conversation with plaintiff
about wiping out all his debt and signing the truck over to him. Pennington said that, while he did
not expect to be paid back by plaintiff, he never agreed to “wiping out his debts.”
Still, Pennington confirmed that he let plaintiff continue using the truck after he was
terminated “because he had no other vehicle to use for personal stuff” and Pennington “felt sorry
for him.” Pennington clarified that plaintiff was not renting the vehicle from him, and said that
his allowing plaintiff to continuing using the truck “was charity.” Pennington explained that, while
he should have asked for the truck back “in hindsight,” he let plaintiff continue using the truck
because they had known each other for close to 30 years and Pennington knew that plaintiff “didn’t
have another vehicle.”
Plaintiff testified that, at the time of the motor vehicle accident, he was self-employed. He
said that he “was doing a commercial wiring job for a facility in Romulus” at the time of the
accident. Plaintiff also said that, despite being self-employed, he was speaking with Pennington
around the time of the accident “because [Pennington] was going to have an electrician pull a
permit for the job that [plaintiff] was doing” in Romulus. Pennington confirmed that, on the day
of the accident, plaintiff “was not in the scope of any employment” with MJS.
Plaintiff did not have insurance on a personal vehicle at the time of the October 16, 2021
accident, so he sought no-fault benefits from Farm Bureau (the insurer of the commercial vehicle
plaintiff was driving at the time), the Michigan Assigned Claims Plan (MACP), and the Michigan
Automobile Insurance Placement Facility (MAIPF). Plaintiff filed the complaint giving rise to
this action on April 26, 2022. He argued that he was entitled to no-fault benefits from either Farm
Bureau or the MACP administered by the MAIPF. On May 16, 2022, the parties stipulated to
substitute Citizens as a party in place of the MACP and the MAIPF, and to dismiss the MACP and
the MAIPF with prejudice.
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Following discovery, Citizens filed a motion for summary disposition on February 28,
2023. As to whether an employment relationship existed between plaintiff and MJS, Citizens
argued that it did based on plaintiff’s history of employment with MJS. Citizens contended that
MJS had previously fired and rehired plaintiff, but plaintiff remained in possession of—and
permitted to use—the Ram truck at all times. According to Citizens, the only reason that MJS
would allow plaintiff to remain in possession of the truck was because MJS planned on rehiring
him as it had done in the past, so the court should consider plaintiff to still be an employee of MJS
despite MJS having terminated plaintiff’s employment before the accident. Citizens alternatively
argued that, even if plaintiff was not MJS’s employee at the time of the accident, MCL 500.3114(3)
still applied because plaintiff was a statutory owner of the Ram truck and, because he was self-
employed, he was both an employee and employer for purposes of MCL 500.3114(3). These facts,
Citizens argued, rendered MCL 500.3114(3) applicable, and made Farm Bureau, as the insurer of
the vehicle, the highest priority insurer responsible for plaintiff’s no-fault benefits.
In response, Farm Bureau argued that plaintiff was not entitled to no-fault benefits from
Farm Bureau under MCL 500.3114(3) because, after MJS terminated plaintiff’s employment, he
was no longer MJS’s employee. Farm Bureau contended that this was confirmed by applying the
economic-reality test—at the time of the accident, MJS had no control over plaintiff’s duties; MJS
was not paying plaintiff; MJS did not have the right to fire or discipline plaintiff; and plaintiff was
no longer performing any duties integral to MJS’s business. Turning to Citizens’ alternative
argument, Farm Bureau contended that plaintiff was not a statutory “owner” of the Ram truck
because his use did not comport with possessory usage consistent with ownership. Farm Bureau
alternatively argued that, even if plaintiff was a statutory owner of the truck, he was not entitled to
benefits under MCL 500.3114(3) because the language of the statute precluded extending coverage
to plaintiff under the circumstances.
The trial court held a hearing on Citizens’ motion on May 10, 2023. The parties argued in
line with their briefing. After listening to the parties’ argument, the trial court granted Citizens’
motion. The court explained that it believed Farm Bureau was responsible for providing coverage
because MJS allowed plaintiff to remain in possession of its vehicle despite terminating his
employment. Upon questioning by Farm Bureau’s counsel, the court clarified that it was holding
that plaintiff was an employee of MJS given the “fluid nature of his status with the company” in
that “he was allowed to keep the vehicle with the expectation that he was—he was—his
employment would be—would be continued.” The court added, “Nobody’s just letting somebody
ride around in their company owned, insured, paid for vehicle unless they have, for whatever
reason, extended that employment benefit to them.” The court ended by again clarifying that it
was ruling that there was no question of fact that plaintiff was an employee of MJS at the time of
the accident.
This appeal followed.
II. STANDARD OF REVIEW
Appellate courts review de novo a trial court’s grant of summary disposition. Innovation
Ventures v Liquid Mfg, 499 Mich 491, 506; 885 NW2d 861 (2016). Citizens moved for summary
disposition under MCR 2.116(C)(10). In Maiden v Rozwood, 461 Mich 109, 120; 597 NW2d 817-4-
(1999), our Supreme Court explained the standard for a motion under MCR 2.116(C)(10) as
follows:
A motion under MCR 2.116(C)(10) tests the factual sufficiency of the complaint.
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. Where the proffered evidence fails to establish a
genuine issue regarding any material fact, the moving party is entitled to judgment
as a matter of law.
A genuine issue of material fact exists when, after viewing the evidence in a light most favorable
to the nonmoving party, reasonable minds could differ on the issue. Allison v AEW Capital Mgt,
LLP, 481 Mich 419, 425; 751 NW2d 8 (2008).
III. ANALYSIS
At issue is a priority dispute between Citizens (the MACP-assigned insurer) and Farm
Bureau (the insurer of the vehicle plaintiff was driving at the time of the accident). “When
determining the priority of insurers liable for no-fault PIP benefits, courts must examine MCL
500.3114.” Duckworth v Cherokee Ins Co, 333 Mich App 202, 210-211; 963 NW2d 610 (2020).
MCL 500.3114(1) sets forth the general rule of priority: “one looks to a person’s own insurer for
no-fault benefits unless one of the statutory exceptions, subsections 2, 3, and 5, applies.” Parks v
Detroit Auto Inter-Ins Exch, 426 Mich 191, 202-203; 393 NW2d 833 (1986).
Plaintiff here did not have an insurer for his personal auto, and the central question on
appeal is whether the exception in MCL 500.3114(3) applies. Stated differently, the question on
appeal is whether Farm Bureau, who insured the vehicle plaintiff was driving at the time of the
accident under a commercial policy with MJS, is responsible for paying plaintiff’s PIP benefits
under MCL 500.3114(3). If Farm Bureau is not responsible for paying plaintiff’s no-fault benefits,
then Citizens, as the MACP-assigned insurer, is responsible for doing so. See MCL 500.3114(4).
MCL 500.3114(3) provides:
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.
It is undisputed that MJS was the titled-owner of the Ram truck that plaintiff was driving at the
time of the accident, making MJS a statutory owner of the truck. See MCL 500.3101(3)(l)(iii)
(defining “owner” to include “[a] person that holds the legal title to a motor vehicle”). The parties
first dispute whether plaintiff was an employee of MJS at the time of the accident.
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A. WAS PLAINTIFF MJS’S EMPLOYEE?
“For 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; 870 NW2d 731 (2015) (citation omitted). “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 (quotation marks and citation omitted).
As recounted above, MJS terminated plaintiff’s employment on August 22, 2021. The
motor-vehicle accident at issue took place nearly two months later, on October 16, 2021. The
termination of plaintiff’s employment two months before the accident makes application of the
factors for the economic-reality test straightforward. At the time of plaintiff’s accident, MJS had
no control over plaintiff’s duties because he had been terminated; MJS was not paying plaintiff
any wages because he had been terminated; MJS could not fire or discipline plaintiff because he
had already been terminated; and plaintiff was not performing any duties for MJS (because he had
been terminated), so plaintiff had no duties that constituted an integral part of MJS’s business.
Given that application of the economic-reality test is so straightforward when it involves a claimant
whose employment with the alleged employer was previously terminated, this Court has
concluded—without consideration of the economic-reality test—that “a former employee” is not
an “employee” for purposes of MCL 500.3114(3). Vitale v Auto Club Ins Ass’n, 233 Mich App
539, 543; 593 NW2d 187 (1999).
Citizens argues that all four factors of the economic-reality test actually support that
plaintiff was an employee of MJS at the time of the accident. Citizens’ argument is specious,
however—it does not discuss plaintiff’s relationship with MJS at the time of the accident or even
after plaintiff was terminated in August 2021. Citizens instead contends that plaintiff’s
relationship with MJS before he was terminated supports that he was an employee of MJS at the
time of the accident. But there is no dispute that plaintiff was an employee of MJS when he was
working for them. The issue is whether plaintiff was still MJS’s employee after he was terminated
on August 22, 2021. Citizens has not presented any evidence tending to show that, under the
economic-reality test, plaintiff was an employee of MJS at the time of the accident.
Insisting on a different result, Citizens contends that plaintiff was a “seasonal” employee
who was merely “laid off” at the time of the accident, and that he should therefore be considered
an employee of MJS at the time of the accident. In support of this argument, Citizens directs this
Court’s attention to Hawthorne v Metro Life Ins Co, 285 Mich 329; 280 NW 777 (1938). At issue
in that case was whether Roosevelt Hawthorne’s wife, the plaintiff, was entitled to benefits on a
life insurance policy issued by Roosevelt’s former employer. Id. at 331. The Court held that the
plaintiff was not entitled to benefits under the life insurance policy because Roosevelt had been
discharged on August 8, 1934, and, by its terms, “[t]he life insurance upon him ceased 31 days
after the termination of his employment, or September 10, 1934,” which was more than two weeks
before Roosevelt’s death on September 28, 1934. Id. at 336.
On its face, Hawthorne’s outcome (that a former employee is not entitled to insurance
benefits provided by a previous employer) does not support plaintiff’s argument, nor do many
statements in the opinion. See, e.g., id. at 335 (“The employee is entitled to coverage under the
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certificate issued to him only while he remains in the employ of the employer . . . .”); id. at 336(“It would be unreasonable to conclude the policy would inure to the benefit of those who have
ceased to be employees.”). Citizens nevertheless relies on Hawthorne for its statement that “the
employer has the right to treat an employee who has been temporarily laid off as still in its employ
for the purpose of continuing his insurance . . . .” Id. at 335 (quotation marks and citation omitted).
But even this quote from Hawthorne does not support Citizens’ argument. The quote refers to a
right given to employers as part of certain insurance policies; the passage begins by stating:
Most group policies provide that the insurance on any employee may be
continued at the employer’s option during a temporary lay-off, temporary
disability, or leave of absence. This is a right accorded to, or reserved by, the
employer, and constitutes an exception to the general provision that the insurance
shall cease with the termination of employment. [Id. at 334, quoting Crawford,
Group Ins § 34 (quotation marks omitted; emphasis added).]
Citizens does not direct this Court’s attention to anything in MJS’s policy with Farm Bureau
suggesting that MJS had the option to extend the insurance provided by the policy to temporarily-
laid-off employees. Nor does Citizens argue that, if this right existed, MJS exercised it. This
makes Citizens’ reliance on Hawthorne inapposite.
Citizens also relies on Michigan Employment Sec Comm v Gen Motors Corp, Chevrolet
Div, 32 Mich App 642; 189 NW2d 74 (1971), to support its argument that plaintiff was still an
employee of MJS at the time of the accident because he was not terminated but laid off. At issue
in Gen Motors Corp was the unemployment compensation act, MCL 421.1 et seq. More
specifically, “the narrow issue before” the Court was determining what was “meant by a ‘layoff’
as that word is used” in a subsection of the unemployment compensation act. Gen Motors Corp,
32 Mich App at 645. Citizens contends that Gen Motors Corp Court’s interpretation of “layoff”
as used in the unemployment compensation act “is exactly right and is what happened in this case.”
Problematically, Citizens fails to explain why this Court’s interpretation of the word “layoff” as
used in the unemployment compensation act is relevant to determining whether plaintiff was
MJS’s “employee” for purposes of MCL 500.3114(3) of the no-fault act. Thus, even if Citizens is
right that plaintiff was laid off for purposes of the unemployment compensation act, it is not
apparent why that matters for purposes of this case. Citizens cannot merely announce a position
and leave it to this Court to rationalize the basis for Citizens’ argument. See Conlin v Scio Twp,
262 Mich App 379, 384; 686 NW2d 16 (2004) (“A party may not merely announce a position and
leave it to this Court to discover and rationalize the basis for the party’s claim.”).
In the end, it cannot be seriously disputed that MJS terminated plaintiff’s employment in
August 2021, approximately two months before plaintiff’s accident in October 2021. 3 After
plaintiff was terminated, he ceased being an employee of MJS. This is true both as a matter of
common sense and by application of the economic-reality test—after plaintiff was terminated,
MJS no longer had control of plaintiff’s duties; MJS stopped paying plaintiff; MJS could no longer
fire or discipline plaintiff; and plaintiff was no longer performing any duties for MJS, let alone
3
Citizens never seriously disputes that plaintiff was terminated by MJS in August 2021; Citizens
instead generally argues that this fact is not dispositive.
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duties that were integral to MJS’s business. Whether MJS planned to rehire plaintiff at some
undisclosed point in the future does not change this conclusion, though that consideration may be
relevant in other employment contexts, like perhaps deciding whether plaintiff was permanently
discharged or temporarily laid off for purposes of the unemployment compensation act. See, e.g.,
Gen Motors Corp, 32 Mich App at 647-648. It is also possible that no-fault benefits could have
been extended to plaintiff as a former employee if so provided in MJS’s policy with Farm Bureau,
see, e.g., Hawthorne, 285 Mich at 334-335, but Citizens does not argue that MJS’s policy had any
such provision. Accordingly, on the record before this Court, there is no question that plaintiff
was not an employee of MJS at the time of the October 2021 accident.
B. CAN FARM BUREAU STILL BE LIABLE?
Citizens alternatively argues that, even if plaintiff was not an employee of MJS at the time
of the accident, he was still self-employed and a statutory owner of the Ram truck, which entitled
him to benefits from Farm Bureau, as insurer of the truck, under MCL 500.3114(3). We agree.
In Celina Mut Ins Co v Lake States Ins Co, 452 Mich 84, 85; 549 NW2d 834 (1996), our
Supreme Court addressed whether MCL 500.3114(3) “applies when the injured person is operating
an insured vehicle in the course of self-employment.” The facts in Celina were relatively
straightforward. Robert Rood, who was self-employed, was injured in a motor-vehicle accident
during the course of his employment. Id. at 86-87. Rood owned the truck that he was driving at
the time of the accident, and the truck was insured by Celina Mutual Insurance Company. Id. at
87. A different insurance company (Lake States Insurance Company) insured Rood’s personal
vehicles. Id. The insurance companies disputed which one was responsible for paying no-fault
benefits to Rood as a result of the accident. Id. This Court held that MCL 500.3114(3) did not
apply under the facts—and thus Celina was not responsible for Rood’s benefits—because Rood
could not be both his own employer and his own employee for purposes of MCL 500.3114(3). Id.
at 87-89. Our Supreme Court disagreed, reasoning “that it is most consistent with the purposes of
the no-fault statute to apply § 3114(3) in the case of injuries to a self-employed person” because
“[t]he cases interpreting that section have given it a broad reading designed to allocate the cost of
injuries resulting from use of business vehicles to the business involved through the premiums it
pays for insurance.” Id. at 89.
Almost 15 years later, this Court applied Celina’s reasoning in Besic v Citizens Ins Co of
the Midwest, 290 Mich App 19; 800 NW2d 93 (2010). The claimant in Besic was injured while
driving a tractor-trailer rig in Ohio. Id. at 21. The claimant owned the tractor and leased it to
MGR Express, Inc. Id. at 21-22. Pursuant to an agreement between MGR and the claimant, MGR
bought liability insurance for the tractor-trailer rig from Lincoln General Insurance Company that
applied “while [the claimant] was operating under the terms of” the parties’ agreement, and the
claimant bought bobtail insurance4 for the tractor from Clearwater Insurance Company. Id. at 22.
Despite that the claimant was injured while hauling freight, this Court held that the claimant’s
4
“Generally, a ‘bobtail’ policy is a policy that insures the tractor and driver of a rig when it is
operated without cargo or a trailer.” Besic, 290 Mich App at 22 n 1 (quotation marks and citation
omitted).
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bobtail insurance with Clearwater applied under the facts given that policy’s terms. Id. at 24-30.
As part of contesting its liability, Clearwater argued that it should, at most, share responsibility for
the claimant’s PIP benefits with the insurer of the claimant’s personal vehicles. This Court rejected
Clearwater’s argument, reasoning that, because claimant owned the truck and worked as a self-
employed independent contractor, MCL 500.3114(3) applied, and Clearwater, as the insurer of the
truck, was responsible for paying the claimant’s first-party benefits. Besic, 290 Mich App at 32.
After Besic, this Court again had occasion to address MCL 500.3114(3) in Adanalic. In
that case, the claimant was “injured while unloading a pallet from a disabled box truck onto a semi-
trailer.” Adanalic, 309 Mich App at 177. The trailer was not owned by the claimant, but the truck
hauling the trailer was. Id. at 177 n 1. The accident in Adanalic occurred after the claimant
accepted a dispatch from DIS Transportation, and both the truck that plaintiff was driving and the
trailer he was hauling were insured by Harco National Insurance Company in a policy issued to
DIS. Id. at 177. One of the issues that this Court addressed was whether the claimant was entitled
to benefits from Harco, which the panel reasoned depended on whether the claimant was DIS’s
employee or an independent contractor at the time of the accident. Id. at 190. After applying the
economic-reality test, this Court concluded that the claimant was an independent contractor for
DIS. Id. at 194. Given this conclusion, this Court held that the insurer of the claimant’s personal
vehicles, not Harco, was responsible for paying the claimant’s no-fault benefits. Id.Five years later, this Court in Miclea v Cherokee Ins Co, 333 Mich App 661, 670; 963
NW2d 665 (2020), again addressed MCL 500.3114(3), focusing on what it called “a superficial
conflict between Celina, Besic, and Adanalic.” Miclea reasoned that both Celina and Besic stand
for the proposition that “if a person is self-employed, that person is necessarily both employer and
employee for purposes of MCL 500.3114(3),” while “Adanalic clearly addressed only whether a
person could simultaneously be an employee and an independent contractor of the same entity at
the same time.” Id. at 670-671. The Court further reasoned that the holdings in Celina and Besic
were not in tension with the holding in Adanalic because, in Celina and Besic, “the injured parties
owned the vehicles in which they were injured,” whereas in Adanalic, “the injured party owned
the truck but his injuries involved his occupancy of a semi-trailer that he did not own.” Id. at 671.5
The Miclea panel concluded that, while all three cases addressed “whether an owner of the
occupied vehicle employed the injured party,” the claimant’s “self-employment status” in
Adanalic was “irrelevant” because he “did not own the vehicle in which he was injured.” Id. The
Miclea panel concluded its opinion as follows:
[T]here is no need to determine which of Celina, Besic, and Adanalic “controls”
over the others, because all three cases can be harmonized. A person cannot be an
employee and independent contractor of the same entity at the same time.
However, being an independent contractor of one entity does not preclude a person
from simultaneously being an employee of another entity, which can include one’s
5
The accident in Adanalic occurred while the claimant was moving boxes from the disabled truck
to the trailer that he was hauling. Adanalic, 309 Mich App at 177-178. While the claimant owned
the truck hauling the trailer, the claimant did not own the trailer itself. Adanalic, 309 Mich App
at 177 n 1.
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self. On these facts, plaintiff was not an employee of Universal, but he was an
employee of himself. Because plaintiff also “owned” the vehicle, MCL
500.3114(3) applies. Because Cherokee insured the vehicle, it is the insurer of
highest priority. [Miclea, 333 Mich App at 672 (footnote omitted).]
Applying Miclea here, if plaintiff was self-employed (and thus both employee and
employer under MCL 500.3114(3)) and “owned” the Ram truck he was driving at the time of the
accident, then Farm Bureau, as the insurer of the truck, would be liable for plaintiff’s PIP benefits
under MCL 500.3114(3). Farm Bureau does not dispute that plaintiff was self-employed at the
time of the accident, nor does Farm Bureau dispute that it insured the Ram truck at the time of the
accident. Farm Bureau instead principally argues that plaintiff was not an “owner” of the Ram
truck involved in the accident.
It is undisputed that plaintiff was not a titled owner of the Ram truck involved in the
accident. The parties dispute instead whether plaintiff was a statutory owner of the truck at the
time of the accident. MCL 500.3101(3)(l)(i) defines “owner” under the no-fault act to include “[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.”
In Ardt v Titan Ins Co, 233 Mich App 685, 690; 593 NW2d 215 (1999), this Court held
“that ‘having the use’ of a motor vehicle for purposes of defining ‘owner’ means using the vehicle
in ways that comport with concepts of ownership.” (Citation omitted.) The Court expounded that
“ownership follows from proprietary or possessory usage, as opposed to merely incidental usage
under the direction or with the permission of another.” Id. at 691 (emphasis omitted). The Ardt
Court ultimately concluded that there was a question of fact about whether the injured claimant
was an “owner” of the motor vehicle he was driving at the time of the accident because witnesses
offered different accounts of the claimant’s use of the vehicle. Id. The Court explained that “the
spotty and exceptional pattern of [the claimant’s] usage” of the motor vehicle to which one witness
testified “may not be sufficient to render [the claimant] an owner of the truck,” while “the regular
pattern of unsupervised usage” to which another witness testified “may well support a finding that
[the claimant] was an owner for purposes of the statute.” Id.Two years later, in Chop v Zielinski, 244 Mich App 677; 624 NW2d 539 (2001), this Court
again addressed whether the plaintiff was an “owner” of the motor vehicle she was driving at the
time of her accident based on her usage of the vehicle. The plaintiff’s ex-husband, not the plaintiff,
was the titled owner of the vehicle the plaintiff was driving at the time of the accident, but Chop
nevertheless held that there was no question of fact that the plaintiff was also an “owner” of the
motor vehicle based on her usage. Id. at 680-682. Chop reasoned as follows:
Plaintiff testified during her deposition that she kept the car parked at her
apartment complex, which was a residence she kept separate from her ex-husband,
drove the car to and from work on a daily basis, and used the car for other personal
errands. Plaintiff’s use of the car in such a manner was possessory use that
comports with the concepts of ownership. There is no indication that plaintiff used
the car under the specific direction of her ex-husband or with her ex-husband’s
permission. Indeed, plaintiff’s own testimony regarding her regular use of the car
reveals that she exercised ownership rights over the vehicle. . . . Given plaintiff’s
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deposition testimony, there is no issue of fact regarding whether plaintiff had
possessory use of the car for more than thirty days before the date of the accident.
Thus, she was an “owner” of the car under the no-fault act. [Id. at 681-682 (citation
omitted).]
In this case, like in Chop, there is no question of fact that plaintiff had proprietary or
possessory usage of the Ram truck for at least 30 days before the accident such that he was an
“owner” of the Ram truck under MCL 500.3101(3)(l)(i). It is undisputed that plaintiff was in
lawful possession of the truck, despite no longer being employed by MJS. It is also undisputed
that, by the time of the accident, plaintiff had been in possession of the truck for more than 30
days—including more than 30 days since MJS terminated plaintiff’s employment. Plaintiff
testified that, while he possessed the truck, it was kept at his house “24/7,” he used the truck for
personal errands “all the time,” he drove the truck for work, and he did not have to ask permission
to use the truck. It is also undisputed that plaintiff was permitted to use the truck for personal
errands without asking permission. Pennington testified that he was aware that plaintiff used the
truck for personal errands and never objected; he said “it was kind of an unspoken thing.”
Pennington also testified that plaintiff never had to ask Pennington’s permission to use the vehicle
for any particular purpose. On this record, there is no question of fact that plaintiff had a “regular
pattern of unsupervised usage” of the Ram truck for more than 30 days before the accident, Ardt,
233 Mich App at 691, meaning that plaintiff “had possessory use of the car for more than thirty
days before the date of the accident,” Chop, 244 Mich App at 682. This made plaintiff an “owner”
of the Ram truck for purposes of the no-fault act. See MCL 500.3101(3)(l)(i).
Farm Bureau insists that, even if plaintiff was a constructive owner of the Ram truck, MCL
500.3114(3) cannot apply under the circumstances of this case because plaintiff, as the “employer”
for purposes of MCL 500.3114(3), did not purchase the policy from Farm Bureau. This argument
is unconvincing for two reasons. First and foremost, MCL 500.3114(3), by its terms, is not
restricted to circumstances in which “the employer” purchased insurance for the vehicle involved
in the accident. The statute instead states circumstances in which “[a]n employee” who is injured
in “a motor vehicle owned . . . by the employer” is entitled to no fault benefits “from the insurer
of the furnished vehicle.” MCL 500.3114(3). Second, placing such a restriction on MCL
500.3114(3) would be inconsistent with Miclea. There, the relevant policy with Cherokee was
purchased by Universal, and this Court concluded that Cherokee was the insurer of highest priority,
despite concluding that the plaintiff was self-employed. Miclea, 333 Mich App at 665, 672.
Farm Bureau next contends that plaintiff is not entitled to benefits under MCL 500.3114(3)
because the Ram truck—“the furnished vehicle” under the statute—was “furnished” by MJS, not
plaintiff, so the truck was not “furnished” by plaintiff’s employer, i.e., himself. Even if Farm
Bureau is correct that the Ram truck had to be “furnished” by plaintiff’s employer, Farm Bureau
has not sufficiently developed this argument to warrant relief. Farm Bureau merely claims that
“the vehicle was furnished by MJS, who is not plaintiff’s employer.” While it is true that MJS
originally gave the vehicle to plaintiff, it is not clear why this is dispositive. That the vehicle was
furnished by MJS at one point does not necessarily mean that plaintiff (as his own employer and
a constructive owner of the Ram truck) could not have “furnished” the Ram truck to himself (as
his employee) at a later time. While it is somewhat odd to think of someone “furnishing” a vehicle
to themselves, if this Court accepts the premise of Farm Bureau’s argument as true, then the self-
employed claimants in Besic and Miclea (as their own employers) must have “furnished” the
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vehicles they were driving to themselves (as their own employees), because MCL 500.3114(3)
applied in both cases. Without some explanation for why plaintiff did not “furnish” the vehicle to
himself, Farm Bureau’s argument must be rejected, even if Farm Bureau is correct that MCL
500.3114(3) requires that the vehicle involved in the accident be “furnished” by the “employer.”
Farm Bureau next argues that the statute cannot apply because it states that the employee
“shall receive personal protection insurance benefits to which the employee is entitled from the
insurer of the furnished vehicle.” MCL 500.3114(3) (emphasis added). Farm Bureau contends
that the emphasized language precludes application of MCL 500.3114(3) because plaintiff is not
entitled to any benefits from Farm Bureau under the terms of Farm Bureau’s policy with MJS. We
agree with Citizens, however, that the emphasized language merely refers to statutory PIP benefits
to which plaintiff may be entitled.
Lastly, Farm Bureau argues that interpreting MCL 500.3114(3) as this opinion does would
“negate the legislative amendment to MCL 500.3114(4).” We disagree. Before MCL 500.3114(4)
was amended, it stated that it did not apply when Subsection (3) applied. See MCL 500.3114(4),
as amended by 2016 PA 347 (“Except as provided in subsections (1) and (3) . . . .”). As amended,
MCL 500.3114(4) continues to state that it does not apply when Subsection (3) applies. See MCL
500.3114(4), as amended by 2019 PA 21 (Except as provided in subsections (2) and (3) . . . .”).
We conclude that Subsection (3) applies, so MCL 500.3114(4) is inapplicable, and any changes
that the Legislature made to that subsection in 2019 are not relevant to deciding the issue presented
in this case.
Accordingly, we conclude that, at the time of the accident, plaintiff was both an
“employee” and “employer” for purposes of MCL 500.3114(3), and he constructively “owned”
the Ram truck involved in the accident under MCL 500.3103(l)(i). This means that MCL
500.3114(3) applied, and Farm Bureau, as the insurer of the vehicle, was the insurer of highest
priority. See Miclea, 333 Mich App at 672. We therefore affirm the trial court, albeit on different
grounds.
Affirmed.
/s/ Michael F. Gadola
/s/ Colleen A. O’Brien
/s/ Allie Greenleaf Maldonado
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