David Gurski v. Motorists Mutual Insurance Company

STATE OF MICHIGAN
COURT OF APPEALS
DAVID GURSKI, FOR PUBLICATION
October 17, 2017
Plaintiff-Appellee, 9:00 a.m.
v No. 332118
Wayne Circuit Court
MOTORISTS MUTUAL INSURANCE LC No. 14-008077-NF
COMPANY,
Defendant,
and
FARM BUREAU INSURANCE COMPANY,
Defendant-Appellant,
and
MICHIGAN AUTOMOBILE INSURANCE
PLACEMENT FACILITY
Defendant-Appellee.
Before: SAAD, P.J., and CAVANAGH and CAMERON, JJ.
SAAD, P.J.
In this no-fault priority case, defendant Farm Bureau Insurance Company (Farm Bureau)
appeals the trial court’s order that denied its motion for summary disposition. For the reasons
provided below, we reverse and remand for entry of summary disposition in favor of Farm
Bureau.
I. NATURE OF THE CASE
This case arises from an accident involving a vehicle and plaintiff. Plaintiff was working
outside the vehicle when the vehicle slipped into gear and injured him. Plaintiff thereafter
sought the recovery of personal protection insurance (PIP) benefits under Michigan’s no-fault
act, MCL 500.3101 et seq. The resolution of this case depends on the proper interpretation of an
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insurance policy issued by Farm Bureau, who insured the vehicle for comprehensive coverage,
and a portion of the no-fault act.
The trial court ruled, incorrectly, that because plaintiff qualified as an “insured” under the
policy and because the vehicle was a “covered auto” on the policy because it was listed on the
policy for comprehensive coverage, plaintiff could recover PIP benefits from Farm Bureau.
However, and most importantly, because the vehicle was not a “covered auto” for the purposes
of PIP benefits, plaintiff cannot rely on the insurance policy to recover those benefits from Farm
Bureau. In other words, the policy undoubtedly expanded on who typically is considered an
“insured” to include plaintiff, but that specific expansion did not alter the actual coverage
provided by the policy. Here, the policy clearly did not provide PIP coverage for the vehicle,
which means that plaintiff cannot recover PIP benefits based on the terms of the policy that Farm
Bureau issued.
The trial court also ruled that MCL 500.3115(1) of the no-fault act requires Farm Bureau
to provide PIP benefits to plaintiff regardless of the coverage listed in the policy. MCL
500.3115(1) can indeed require insurers to provide PIP benefits although they did not provide
PIP coverage for the vehicle involved in the accident. However, in order to recover under this
provision, the owner of the vehicle involved in the accident must have PIP coverage from some
source. Here, the owner of the vehicle did not have PIP coverage (through Farm Bureau or
otherwise). While Farm Bureau’s policy provided PIP coverage to other vehicles, it cannot be
said that the owner was covered. The named insured on the policy was a company, and the
owner was named as a “designated insured” in Farm Bureau’s policy solely for purposes of
liability insurance, not PIP coverage. Therefore, Farm Bureau is not a PIP insurer of the owner
of the vehicle that was involved in the accident. Consequently, MCL 500.3115(1) does not allow
plaintiff to recover PIP benefits from Farm Bureau.
Accordingly, the trial court erred when it ruled that Farm Bureau was liable to pay PIP
benefits to plaintiff. We reverse and instruct the court to grant summary disposition in favor of
Farm Bureau.
II. BASIC FACTS
The underlying facts are undisputed. Plaintiff is the owner of Gurski Auto Repair Shop
and Services. On June 24, 2013, plaintiff was injured while working on a 1993 Jeep Wrangler at
his shop. When plaintiff tried to jump-start the Jeep’s battery, the Jeep somehow slid into gear
and ran over his leg.
The owner of the Jeep is Andy Frazier (Mr. Frazier). Mr. Frazier’s business, Frazier
Construction, LLC, had an insurance policy with Farm Bureau. On that policy, it listed Frazier
Construction as the “named insured.” However, elsewhere in the policy, it listed Mr. Frazier as a
“designated insured.” The endorsement related to the “designated insured” provides, in pertinent
part:
Each person or organization shown in the Additional Interest Schedule as a
Designated Insured is an “insured” for LIABILITY COVERAGE, but only to the
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extent that person or organization qualifies as an “insured” under the WHO IS AN
INSURED provision contained in Section II of the Coverage Form.
We will pay the damages for which the Designated Insured becomes legally liable
only if the damages arise out of the negligence of the Named Insured.
The policy listed three different vehicles: a 2011 trailer, the 1993 Jeep that was involved with
the accident, and a 2004 Ford F250 truck. However, while the Ford F250 and trailer had
personal injury protection (PIP) coverage, the Jeep did not.1 Under the “Michigan Personal
Injury Protection” section of the policy, it states in pertinent part:
We will pay personal injury protection benefits to or for an “insured” who
sustains “bodily injury” caused by an “accident” and resulting from the
ownership, maintenance, or use of an “auto” as an “auto.”
And under “WHO IS AN INSURED,” the policy states:
1. You or any “family member”.
2. Anyone else who sustains “bodily injury”:
* * *
c. While not occupying any “auto” as a result of an “accident” involving a
covered “auto”.
The policy also included a section, titled “Elimination of Mandatory Coverage,” which states:
In accordance with the named Insured’s request, coverages mandatory under
Michigan’s No-Fault Auto Insurance Law have been eliminated from a vehicle(s)
covered by the policy. The company shall not be liable for loss, damage, and/or
liability caused while such a vehicle(s) is moved or operated.
Plaintiff attempted to recover PIP benefits through all three defendants. Defendant
Motorists Mutual, who had issued a no-fault policy to plaintiff’s business, denied the claim
because plaintiff was not a named insurer under its policy. Defendant Farm Bureau denied
coverage because the policy does not provide PIP benefits for the Jeep. And defendant Michigan
Automobile Insurance Placement Facility (MAIPF) refused to assign plaintiff’s claim to an
insurer because it determined that Farm Bureau was liable for providing coverage. Plaintiff
thereafter filed suit.
MAIPF filed a motion for summary disposition and argued that it should be dismissed
from the case because coverage is available under the Farm Bureau policy. Farm Bureau argued
1
Because of the Jeep’s poor condition, it was not able to be driven; thus, pursuant to MCL
500.3101(1), Mr. Frazier opted to remove all but comprehensive coverage for the vehicle.
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that it cannot be liable for PIP benefits because it is not an insurer of the owner of the Jeep for
purposes of no-fault benefits.
After receiving competing motions for summary disposition from the various parties, the
trial court issued its order, which denied Farm Bureau’s motion and partially granted plaintiff’s
and motion. 2 The court found that Farm Bureau was obligated to cover plaintiff’s PIP benefits
and explained:
The [Michigan Personal Injury Protection] endorsement further defines an
“Insured” as “anyone who sustains bodily injury . . . while not occupying any
‘auto’ as a result of an ‘accident’ involving a covered auto. The declarations page
lists the Jeep as a “covered auto”. The Plaintiff, David Gurski, was injured while
not occupying the Jeep. As a result of the express policy language in the
Endorsement, David Gurski is entitled to the PIP coverages outlined in the
Endorsement.
The trial court also found that, aside from the express policy language, Farm Bureau was
obligated to provide the coverage under MCL 500.3115(1), which states:
Except as provided in subsection (1) of section 3114, a person suffering
accidental bodily injury while not an occupant of a motor vehicle shall claim
personal protection insurance benefits from insurers in the following order of
priority:
(a) Insurers of owners or registrants of motor vehicles involved in the accident.
(b) Insurers of operators of motor vehicles involved in the accident.
The court relied on Pioneer State Mut Ins Co v Titan Ins Co, 252 Mich. App. 330; 652 NW2d 469
(2002), and observed that the owner of the vehicle involved in the accident was Mr. Frazier and
that he was a designated insured under the Farm Bureau policy. The court opined that, as a
result, Farm Bureau is the insurer of the owner of the vehicle that was involved in the accident.
The court expressly stated that it did not need to address Farm Bureau’s argument that it did not
provide PIP coverage for the Jeep.
Farm Bureau moved for reconsideration and argued that the policy clearly did not
provide PIP coverage for the Jeep. Farm Bureau also argued that MCL 500.3115 could not be
used to provide plaintiff with PIP benefits because Mr. Frazier, while named as a designated
insured, had no personal no-fault coverage. Instead, Mr. Frazier was only covered under the
policy’s liability coverage for negligence. Farm Bureau further argued that any reliance on
Pioneer is misplaced because, unlike in Pioneer, there is no match between the owner of the
vehicle (Mr. Frazier) and the named insured on the PIP policy (Frazier Construction).
2
The court also granted defendant Motorists Mutual’s motion and dismissed it as a party. This
decision is not part of this appeal.
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The trial court later denied Farm Bureau’s motion for reconsideration.
III. STANDARDS OF REVIEW
This Court reviews a trial court’s decision on a motion for summary disposition de novo.
McLean v City of Dearborn, 302 Mich. App. 68, 72; 836 NW2d 916 (2013). When reviewing a
motion under MCR 2.116(C)(10), this Court “must consider the pleadings, affidavits,
depositions, admissions, and other documentary evidence in favor of the party opposing the
motion.” Baker v Arbor Drugs, Inc, 215 Mich. App. 198, 202; 544 NW2d 727 (1996). The
motion is properly granted if (1) there is no genuine issue related to any material fact and (2) the
moving party is entitled to judgment as a matter of law. Klein v HP Pelzer Auto Sys, Inc, 306
Mich. App. 67, 75; 854 NW2d 521 (2014).
The construction and interpretation of an insurance contract is a preliminary question of
law that we review de novo. Allstate Ins Co v Muszynski, 253 Mich. App. 138, 140-141; 655
NW2d 260 (2002). Likewise, we also review a trial court’s interpretation and construction of a
statute de novo. Old Kent Bank v Kal Kustom Enterprises, 255 Mich. App. 524, 529; 660 NW2d
384 (2003).
IV. ANALYSIS
The trial court determined that Farm Bureau was liable for paying PIP benefits to plaintiff
under two theories: under the express language of the policy and statutorily under MCL
500.3115(1).
A. TERMS OF THE POLICY
The trial court erroneously found that from the express terms of the insurance policy that
plaintiff was owed PIP benefits.
While interpreting an insurance contract, “[w]e look at the language of the insurance
policy and interpret its terms in accordance with the principles of contract construction.” Allstate
Ins, 253 Mich. App. at 141. The primary rule in contract interpretation is to ascertain the parties’
intent. Shay v Aldrich, 487 Mich. 648, 660; 790 NW2d 629 (2010). “If the contractual language
is unambiguous, courts must interpret and enforce the language as written because an
unambiguous contract reflects the parties’ intent as a matter of law.” Hastings Mut Ins Co v
Safety King, Inc, 286 Mich. App. 287, 292; 778 NW2d 275 (2009). Unambiguous contractual
language is to be construed according to its plain meaning. Shay, 487 Mich. at 660. And “[c]lear
and specific exclusionary provisions must be given effect, but are strictly construed against the
insurer and in favor of the insured.” Hastings Mut Ins, 286 Mich. App. at 292.
The insurance policy provides, in pertinent part, as follows:
ITEM TWO Schedule of Coverages and Covered Autos
This policy provides only those coverages where a charge is shown in the
Premium Summary column, below. Each of these coverages will apply only to
those “autos” shown as covered “autos”. “Autos” are shown as covered “autos”
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for a particular coverage by the entry, next to the name of the Business Auto
Coverage, of one or more of the symbols from the COVERED AUTO Section of
the Business Auto Coverage Form.
Under the “Premium Summary” column, the policy lists $115.00 in premiums for Personal
Injury Protection. Thus, the policy does provide PIP coverage, but as the second sentence in
ITEM TWO provides, the PIP coverage only applies to those vehicles that are shown as covered
vehicles for PIP coverage. Under the BUSINESS AUTO COVERAGE FORM, it states that if a
“7” symbol appears next to the coverage in ITEM TWO, then only those vehicles described in
ITEM THREE “for which a premium charge is shown” are covered for that particular coverage.
Here, a “7” symbol does appear next to the Personal Injury Protection entry in ITEM TWO.
Thus, whether an individual vehicle has PIP coverage is determined by whether there are any
premiums listed for that coverage under ITEM THREE of the policy. Under ITEM THREE,
while there are PIP premiums listed for both the trailer ($10) and the Ford F250 ($105), there is
no premium listed for the Jeep. Thus, it is abundantly clear that the policy does not provide any
coverage for PIP benefits related to the Jeep.3
The trial court’s reliance on the Michigan Personal Injury Protection endorsement as
allowing or “reviving”4 PIP coverage for the Jeep is misplaced. Under the Michigan Personal
Injury Protection endorsement, it states, in pertinent part:
A. COVERAGE
We will pay personal injury protection benefits to or for an “insured” who
sustains “bodily injury” caused by an “accident” and resulting from the
ownership, maintenance, or use of an “auto” as an auto”. . . .
B. WHO IS AN INSURED
1. You or any “family member”.
2. Anyone else who sustains “bodily injury”:
* * *
c. While not occupying any “auto” as a result of an “accident” involving a
covered “auto”.
The trial court is correct that plaintiff suffered a bodily injury while not occupying the
Jeep. However, the court erred when it cursorily stated, “The declarations page lists the Jeep as a
‘covered auto.’ ” While the Jeep is listed in the policy, it was listed only for comprehensive
3
As reinforcement to what has already been stated, ITEM THREE contains the following
language: “Coverage provided for each Covered Auto is limited to the specific coverages and
liability limits for which a premium is shown.”
4
In its order denying Farm Bureau’s motion for reconsideration, the trial court stated that “even
if the policy itself excludes PIP coverage through the Jeep, the PIP Endorsement brings PIP
coverage back in.”
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coverage and did not have any PIP coverage. Thus, it was not a “covered auto” for purposes of
PIP benefits. Importantly, nothing in the language of this endorsement changed the underlying
scope of the coverage. Instead, it merely allows others that normally would not have been able
to claim PIP benefits (due to not being a named insured) to do so as an insured under the existing
policy. Accordingly, the trial court erred when it held that plaintiff was entitled to PIP benefits
from the express language of the policy.
B. MCL 500.3115(1)
The trial court also incorrectly found that plaintiff was entitled to PIP benefits pursuant to
MCL 500.3115(1). “The judiciary’s objective when interpreting a statute is to discern and give
effect to the intent of the Legislature. First, the court examines the most reliable evidence of the
Legislature’s intent, the language of the statute itself.” Book-Gilbert v Greenleaf, 302 Mich. App.
538, 541; 840 NW2d 743 (2013) (citation omitted). When doing so, courts are to “giv[e] each
and every word its plain and ordinary meaning unless otherwise defined.” Id. (quotation marks
and citation omitted). “If the language of a statute is clear and unambiguous, the statute must be
enforced as written and no further judicial construction is permitted.” Whitman v City of Burton,
493 Mich. 303, 311; 831 NW2d 223 (2013).
MCL 500.3115(1) provides as follows:
Except as provided in subsection (1) of section 3114, a person suffering
accidental bodily injury while not an occupant of a motor vehicle shall claim
personal protection insurance benefits from insurers in the following order of
priority:
(a) Insurers of owners or registrants of motor vehicles involved in the accident.
(b) Insurers of operators of motor vehicles involved in the accident.
As the trial court noted, this Court has interpreted this provision before. In Pioneer, 252
Mich. App. at 336, this Court stated:
This statutory language clearly states that the insurer of the owner or registrant of
the motor vehicle involved in the accident is liable for payment of personal
protection insurance benefits. . . . Stated another way, the statute does not
mandate that the vehicle involved in the accident must have been insured by the
insurer of the owner before an injured person can seek benefits. [Emphasis
added.]
In Pioneer, a pedestrian was injured by a vehicle that was owned by John Miller, Sr. Id. at 332.
While Miller did not insure the vehicle, he had PIP coverage through two other vehicles he
owned. Id. Accordingly, the Court held that the insurer for those two other vehicles was liable
under MCL 500.3115(1) for providing PIP benefits to the injured pedestrian. Id. at 337. The
Court noted that holding the insurer liable in this instance was consistent with the Legislature’s
“intent that persons rather than vehicles be insured against loss.” Id. at 336-337 (emphasis
added), citing DAIIE v Home Ins Co, 428 Mich. 43, 49; 405 NW2d 85 (1987), Lee v DAIIE, 412
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Mich 505, 516; 315 NW2d 413 (1982), and Universal Underwriters Group v Allstate Ins Co, 246
Mich. App. 713, 725-730; 635 NW2d 52 (2001).
Thus, the fact that the Jeep here was not covered by a PIP policy is not relevant. What is
relevant is whether the Jeep’s owner, Mr. Frazier, was insured for PIP benefits elsewhere.
Contrary to the trial court’s determination, we hold that Farm Bureau’s policy did not provide
PIP coverage to Mr. Frazier. The trial court relied on the fact that Farm Bureau’s policy
provided PIP coverage to the Ford F250—though true, the court failed to fully appreciate the fact
that the named insured on that policy was Frazier Construction, not Mr. Frazier the individual.
Mr. Frazier was named elsewhere in the policy as a “designated insured,” but upon closer
examination, this designation only provided Mr. Frazier with liability coverage. The
endorsement that names Mr. Frazier as a “designated insured” states:
Each person or organization shown in the Additional Interest Schedule as a
Designated Insured is an “insured” for LIABILITY COVERAGE . . . .
We will pay the damages for which the Designated Insured becomes legally liable
only if the damages arise out of the negligence of the Named Insured.
Thus, it is clear that, because Mr. Frazier is only named as a designated insured for purposes of
liability coverage,5 the policy did not provide any PIP coverage to Mr. Frazier. Rather, the
insured for PIP benefits is Frazier Construction. Cf. Dawley v Hall, 319 Mich. App. 490, 497;
___ NW2d ___ (2017) (recognizing that an “LLC is a separate and distinct legal entity from that
of its . . . members”). Accordingly, Farm Bureau cannot be considered an insurer of the owner
of the vehicle that was involved in the accident for purposes of MCL 500.3115(1).
5
We reject MAIPF’s argument that the language is not exclusive and should be read to provide
liability coverage without precluding other coverages. While there may be some doubt if one
solely relies upon this “designated insured” provision, elsewhere, the “Additional Interest
Schedule” in the policy states:
The following have an interest in the Indicated Covered Auto:
[Chase Auto Finance]
The following have an interest in the Liability Coverage provided by this policy:
[Andy Frazier]
It is important to note that under this “Additional Interest Schedule,” it does not mention any
additional interests, except for Indicated Covered Auto and Liability Coverage. The omission of
other interests, such as personal injury protection, is an indication that no other interests were
contemplated. Cf. Alcona Co v Wolverine Environmental Prod, Inc, 233 Mich. App. 238, 247;
590 NW2d 586 (1998) (stating that “the expression of one thing is the exclusion of another”).
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We recognize that, technically, through the liability coverage it provided, Farm Bureau is
an insurer of Mr. Frazier. However, we find that MCL 500.3115(1)(a)’s reference to “[i]nsurers
of the owners” cannot be read in a vacuum. Indeed, when reading the statute as a whole, as we
must, Bush v Shabahang, 484 Mich. 156, 167; 772 NW2d 272 (2009), it is clear that MCL
500.3115(1)(a)’s reference to “[i]nsurers” is in the context of insurers who provide PIP
coverage. MCL 500.3115(1) states, in relevant part, that
a person suffering accidental bodily injury while not an occupant of a motor
vehicle shall claim personal protection insurance benefits from insurers in the
following order of priority:
(a) Insurers of owners or registrants of motor vehicles involved in the accident.
Thus, subsection (a)’s use of “[i]nsurers” is a reference to the previously mentioned “insurers,”
from which the injured person is seeking personal protection insurance benefits. Hence, the
insurers that are contemplated in the legislative scheme are those that are providing PIP
coverage. And here, Farm Bureau does not provide any PIP coverage to Mr. Frazier and
therefore it is not an “insurer” of Mr. Frazier for the purposes of MCL 500.3115.6
Reversed and remanded for entry of summary disposition in favor of Farm Bureau and
other proceedings consistent with this opinion. We do not retain jurisdiction. Farm Bureau, as
the prevailing party, may tax costs pursuant to MCR 7.219.
/s/ Henry William Saad
/s/ Mark J. Cavanagh
/s/ Thomas C. Cameron
6
If no such limitation were read into the statute, then an injured person could claim PIP benefits
from any insurer of the owner of the vehicle involved in the accident, regardless of what type of
insurance the insurer provides. For example, without requiring the insurer to provided PIP
coverage to the vehicle’s owner, an injured person could then recover PIP benefits from the
owner’s life insurance company because that company nonetheless “insures” the owner of the
vehicle that was involved in the accident. Such a construction is not consistent with the manifest
intent of the Legislature.
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