Wills v. State Farm Insurance

564 N.W.2d 488 (1997) 222 Mich. App. 110

Robert WILLS and Cathy Wills, Plaintiffs-Appellees,
v.
STATE FARM INSURANCE COMPANY, Defendant-Appellant.

Docket No. 188559.

Court of Appeals of Michigan.

Submitted September 16, 1996, at Grand Rapids. Decided March 4, 1997, at 9:00 a.m. Released for Publication May 15, 1997.

Richard L. Migala, Kalamazoo, for plaintiffs-appellees.

James, Dark & Brill by John C. Fish, Kalamazoo, for defendant-appellant.

Before GRIBBS, P.J., and MARKEY and T.G. KAVANAGH^[*], JJ.

PER CURIAM.

Plaintiffs Robert and Cathy Wills filed a declaratory judgment action against defendant State Farm Insurance Company to determine whether defendant has a duty to pay benefits on behalf of Robert Wills (hereafter plaintiff) under the uninsured motorist provisions found in plaintiff's policy with defendant. Pursuant to the parties' stipulated statement of facts, the trial court granted summary disposition in plaintiffs' favor upon finding coverage where gunshots fired from an unidentified automobile passing plaintiff's vehicle caused plaintiff to drive off the road and suffer injuries. Defendant appeals as of right. We reverse and remand.

In 1994, defendant issued a policy of insurance to plaintiff to cover his 1989 Mercury Sable. As part of this policy, defendant promised to pay plaintiff certain damages if he were injured as the result of an automobile accident between his vehicle and a vehicle driven by an uninsured motorist. The policy stated as follows:

We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be caused by [an] accident arising out of the operation, maintenance or use of an uninsured motor vehicle.

Uninsured Motor Vehicle—means:

* * * * * *

2. a "hit-and-run" land motor vehicle whose owner or driver remains unknown and which strikes

a. the insured or

b. the vehicle the insured is occupying and causes bodily injury to the insured. [Emphasis in original.]

While plaintiff was driving his Sable on Shaw Lake Road in Barry County, another vehicle pulled alongside his car as if it were passing him in the left lane. Suddenly, plaintiff saw a flash and heard gunshots. Reacting to the shots, plaintiff ducked down to the right toward the floor of the passenger area to avoid injury. Upon doing so, plaintiff turned the Sable's steering wheel to the right. The vehicle swerved off the road and hit two trees. As a result of the accident, plaintiff injured his neck and back, requiring surgery. The parties agree that there was no actual physical contact between the unidentified automobile from which the shots were fired and plaintiff's automobile. The unidentified vehicle and its occupants left the scene of the accident, and the identities of the occupants remain unknown.

Plaintiff subsequently filed a claim with defendant for medical and uninsured motorist benefits. Defendant paid plaintiff his medical benefits but denied plaintiff's claim for uninsured motorist benefits because there was no physical contact between plaintiff's Sable and the unidentified vehicle. Plaintiffs responded by filing a declaratory judgment action asking the trial court to enter judgment in their favor with regard to the coverage dispute and to order damages for defendant's bad-faith refusal to pay benefits or submit the matter to arbitration, as plaintiffs had requested.

Defendant moved for summary disposition under MCR 2.116(C)(8) and (C)(10) on the basis that the clear language of the uninsured motorist provision excluded coverage for the situation in question. The parties stipulated the facts and agreed that "[t]he issue to be decided by the Court is whether or not Plaintiff Robert Wills' bodily injury was caused by an accident arising out of the operation, maintenance or use of a[n] uninsured motor vehicle within the meaning of Defendant State Farm's policy."

At the hearing on defendant's motion, the trial court distinguished this Court's decision in Kreager v. State Farm Mutual Automobile Ins. Co., 197 Mich.App. 577, 496 N.W.2d 346 (1992), from the instant case and relied upon Hill v. Citizens Ins. Co. of America, 157 Mich.App. 383, 403 N.W.2d 147 (1987), to find that a sufficient physical nexus existed between the two involved automobiles because, while they were moving, a projectile came from one car and entered the other. The trial court reasoned that this constituted a direct causal connection that was sufficient to permit recovery of uninsured motorist benefits under Hill. Also, given the bullet holes in plaintiff's vehicle, the court surmised that if it were up to it to decide the issue at a bench trial, it would find that the assault was against plaintiff's vehicle, not against plaintiff. According to the trial court, "as I understand the court rule under directed—under declaratory judgments, the Court can accelerate the trial. So if somebody in a different court thinks that summary disposition was not proper, those would be—that would be my finding in a nonjury situation. And since we have stipulated facts, [that] would be my finding in a nonjury situation." Therefore, the court found in favor of plaintiffs under MCR 2.116(C)(8) and (C)(10)^[1] and denied defendant's motion.

As its first issue on appeal, defendant asserts that the trial court erred in granting plaintiffs summary disposition because, on the basis of the stipulation of facts, no genuine issue of fact existed that plaintiff's vehicle was ever struck by the unidentified vehicle, and defendant therefore was entitled to entry of judgment. We review de novo the trial court's rulings with regard to summary disposition motions, declaratory judgments, and questions of law. See Cardinal Mooney High School v. Michigan High School Athletic Ass'n, 437 Mich. 75, 80, 467 N.W.2d 21 (1991); State Treasurer v. Schuster, 215 Mich.App. 347, 350, 547 N.W.2d 332 (1996); Michigan Residential Care Ass'n v. Dep't of Social Services, 207 Mich.App. 373, 375, 526 N.W.2d 9 (1994). Upon review de novo, we agree.

Uninsured motorist coverage is not required by statute; thus, the contract of insurance determines under what circumstances the benefits will be awarded. Berry v. State Farm Mutual Automobile Ins. Co., 219 Mich.App. 340, 346, 556 N.W.2d 207 (1996); Auto-Owners Ins. Co. v. Harvey, 219 Mich.App. 466, 470, 556 N.W.2d 517 (1996). An uninsured motorist policy's requirement of "physical contact" between a hit-and-run vehicle and the insured or the insured's vehicle is enforceable in Michigan. Berry, supra at 347, 556 N.W.2d 207; Kreager, supra at 581-583, 496 N.W.2d 346; Hill, supra at 394, 403 N.W.2d 147. This Court has construed the physical contact requirement broadly to include indirect physical contact as long as a substantial physical nexus exists between the unidentified vehicle and the object cast off by that vehicle or the object that strikes the insured's vehicle. Id.

A "substantial physical nexus" between the unidentified vehicle and the object causing the injury to the insured has been found where the object in question was a piece of, or projected by, the unidentified vehicle, but not where the object originates from an occupant of an unidentified vehicle. See Berry, supra at 350, 556 N.W.2d 207; Kreager, supra at 579, 496 N.W.2d 346; Adams v. Zajac, 110 Mich.App. 522, 526-527, 313 N.W.2d 347 (1981). In Kreager, supra, an occupant of an unidentified vehicle shot the insured while he stood outside the driver's side of his vehicle. He was standing there because someone in the unidentified vehicle had thrown a bottle at his car, and he responded by throwing the bottle back at the unidentified vehicle. The shooting occurred in apparent retaliation. After determining that the "physical contact" requirement was dispositive of the dispute between the insured and his uninsured motorist insurance carrier, this Court stated:

Plaintiff's injuries lack a sufficient "physical nexus" with the unidentified vehicle. Unlike the plaintiff in Hill, supra, plaintiff was not injured by an object accidentally projected by the uninsured vehicle. Rather, the "projectile" involved [here] was a bullet fired from the handgun used by the assailant. There was no projection resulting from the vehicle itself. [Kreager, supra at 583, 496 N.W.2d 346.]

This Court found no "substantial physical nexus" between the insured or his vehicle and the unidentified vehicle. It also agreed with defendant that the insured's injuries did not arise from any physical contact between the vehicles. Thus, in Kreager, supra at 582-583, 496 N.W.2d 346, this Court held that the insured could not recover uninsured motorist benefits.

In Hill, supra at 384-385, 403 N.W.2d 147, the plaintiff's husband was driving his vehicle when a camper-truck passing in the opposite direction propelled a large rock through the car's windshield, causing the husband's death. The trial court, relying on Auto Club Ins. Ass'n v. Methner, 127 Mich.App. 683, 339 N.W.2d 234 (1983) (uninsured vehicle forced the insured to drive off the road; no coverage in the absence of direct physical contact between vehicles), granted summary disposition in favor of the defendant because it did not believe that a rock propelled into the air by a vehicle's tire could constitute sufficient physical contact for purposes of uninsured motorist coverage. Finding the trial court's reliance on Methner misplaced, this Court reversed the trial court's decision. Hill, supra at 390, 395, 403 N.W.2d 147. Upon reviewing various Michigan and out-ofstate cases, this Court found that direct physical contact between the uninsured vehicle and the insured was not required in order to find coverage. Id. at 390, 403 N.W.2d 147. Rather, because the parties agreed that a rock came through the windshield just as the other vehicle passed, the plaintiff could "establish a substantial physical nexus between the disappearing vehicle and the object cast off or struck." Id. at 394, 403 N.W.2d 147. Moreover, this Court believed that requiring an insured to prove indirect contact would also foreclose the possibility of fraudulent phantom vehicle claims, such as in Methner. Id. "In summary, the overwhelming majority of jurisdictions hold that the ``physical contact' provision in uninsured motor vehicle coverage may be satisfied even though there is no direct contact between the disappearing vehicle and claimant or claimant's vehicle." Id.; see also Berry, supra at 347-348, 350, 556 N.W.2d 207.

In the case at bar, the parties stipulated that there was no actual physical contact between plaintiff's automobile and the unidentified vehicle in question. Rather, the bullets fired by an occupant of the unidentified vehicle struck plaintiff's car. Thus, unlike Hill, there was no physical contact between the involved vehicles and no projectile that the unidentified vehicle cast against plaintiff's car. See also Berry, supra at 343-350, 556 N.W.2d 207 (scrap metal left in road after trailer full of scrap passed through area fifteen minutes before insured collided with it satisfied substantial physical nexus requirement); Adams, supra at 526-527, 313 N.W.2d 347 (summary disposition for Secretary of State reversed where insured's vehicle went out of control after striking or swerving to avoid striking a truck tire and rim assembly left in the highway as the indirect physical contact between the involved vehicles was sufficient); Lord v. Auto-Owners Ins. Co., 22 Mich.App. 669, 672, 177 N.W.2d 653 (1970) (recovery permitted where a hit-and-run vehicle struck a second vehicle that in turn was propelled into the plaintiff's vehicle). Indeed, as this Court recognized in Kreager, supra at 581, 496 N.W.2d 346, the shooting was not related to the assailant's use of a motor vehicle as a motor vehicle because "the shots could just as readily have been fired from a building, a parked car, a bicycle, or by a pedestrian." Thus, where it is undisputed that an occupant of an unidentified vehicle moving alongside plaintiff's vehicle shot at and hit plaintiff's vehicle, i.e., the projectile here came from a gun, not from the vehicle itself, plaintiff cannot show the requisite substantial physical nexus between the unidentified vehicle and himself or his vehicle. Kreager, supra.

Additionally, we reject the trial court's attempt to apply cases regarding the recovery of no-fault personal protection insurance benefits to the case at bar. See Mann v. DAIIE, 111 Mich.App. 637, 314 N.W.2d 719 (1981), and Saunders v. DAIIE, 123 Mich.App. 570, 332 N.W.2d 613 (1983).^[2] The no-fault act mandates that, when claiming personal protection insurance benefits, the insured must show a causal connection between the injury sustained and the ownership, maintenance, or use of the insured's motor vehicle as a motor vehicle. M.C.L. § 500.3105(1); M.S.A. § 24.13105(1). The basis of an uninsured motorist dispute, however, focuses on the "ownership, maintenance or use of an uninsured motor vehicle" (emphasis added). Kreager, supra at 583, 496 N.W.2d 346. Therefore, because this is not a claim for first-party no-fault benefits, it is irrelevant whether plaintiff was using his automobile as an automobile at the time of the accident. Also, while we agree with the trial court that the physical contact requirement prevents fraudulent "phantom" vehicle claims under uninsured motorist policies, Berry, supra at 347, 556 N.W.2d 207, we also believe that it ensures a "substantial nexus between the disappearing vehicle and the object cast off or struck." Hill, supra at 394, 403 N.W.2d 147. Accordingly, we find that the trial court's attempts to distinguish the case at bar from Kreager must fail.

Giving the language of defendant's uninsured motorist policy its ordinary and plain meaning, Hosking v. State Farm Mutual Automobile Ins. Co., 198 Mich.App. 632, 633-634, 499 N.W.2d 436 (1993), and in light of this Court's decision in Kreager, we find that no uninsured motorist coverage is available for plaintiffs because the unidentified automobile did not strike or physically contact either plaintiff or plaintiff's vehicle. Stated otherwise, in the absence of any physical contact between plaintiff or his vehicle and the other automobile, that automobile is not considered a "hit-and-run" vehicle. Also, the bullets shot by an occupant of the fleeing vehicle, and which struck plaintiff's car, do not provide a sufficient physical nexus between the vehicles. Berry, supra at 347, 556 N.W.2d 207; Kreager, supra. Because plaintiff's injuries did not result from any physical contact between the unidentified vehicle and plaintiff's vehicle, we must reverse the trial court's grant of summary disposition in favor of plaintiffs and remand this case for entry of judgment pursuant to MCR 2.116(A) in favor of defendant with regard to the issue of uninsured motorist coverage.

In light of our ruling regarding this issue, we need not reach defendant's other issues on appeal.

Reversed and remanded for entry of summary disposition in favor of defendant. Defendant, being the prevailing party, may tax costs pursuant to MCR 7.219.

T.G. KAVANAGH, J., did not participate.

NOTES

[*] Former Supreme Court justice, sitting on the Court of Appeals by assignment.

[1] We note that the trial court should have entered summary disposition pursuant to MCR 2.116(A) because the parties submitted a stipulation of facts to the trial court. For purposes of our analysis, we will use the correct court rule to determine whether plaintiffs or defendant was entitled to judgment as a matter of law. Shirilla v. Detroit, 208 Mich.App. 434, 436-437, 528 N.W.2d 763 (1995).

[2] Notably, this Court observed that the rationale underlying Mann, supra, and Saunders, supra, had been overruled in Kennedy v. Auto Club of Michigan, 215 Mich.App. 264, 268, 544 N.W.2d 750 (1996).