Home Owners Insurance Company v. Allstate Insurance Company

STATE OF MICHIGAN
COURT OF APPEALS
HOME OWNERS INSURANCE COMPANY, UNPUBLISHED
September 15, 2015
Plaintiff-Appellee,
v No. 321638
Ingham Circuit Court
ALLSTATE INSURANCE COMPANY, LC No. 13-000239-CK
Defendant-Appellant.
Before: GADOLA, P.J., and JANSEN and BECKERING, JJ.
PER CURIAM.
Defendant appeals by delayed leave granted1 an order of the trial court granting
plaintiff’s motion for summary disposition under MCR 2.116(C)(10) (no genuine issue of
material fact) and entering a declaratory judgment in favor of plaintiff. We reverse and remand
for entry of summary disposition in favor of defendant.
The underlying facts are undisputed. On July 14, 2008, Marana Czap, a minor domiciled
in Pennsylvania, was hit by a car while attempting to walk across a road near Bay City,
Michigan. Czap was visiting her father, who had an automobile insurance policy with plaintiff.
Czap’s mother was insured through a policy issued by defendant to Czap’s grandparents, with
whom Czap and her mother lived in Pennsylvania. Plaintiff paid Czap first party no-fault
benefits of $62,749.61 after Farm Bureau Insurance Company, the insurer of the driver, initially
paid the benefits and obtained recoupment from plaintiff in a Bay Circuit Court action. Plaintiff
subsequently brought this action seeking reimbursement from defendant, asserting that defendant
was the proper carrier to provide coverage. Plaintiff sought summary disposition, arguing that
pursuant to MCL 500.3163, defendant “is responsible to provide first party no-fault coverage”
because Czap “resided with her grandparents on the day of the accident.” In response, defendant
argued that MCL 500.3163(1) precluded coverage where the out-of-state party was not operating
a vehicle in Michigan. The court concluded that if the Legislature had not adopted MCL
500.3163(4), defendant would not be liable for benefits under subsection (1). In light of this, the
1
Home Owners Ins Co v Allstate Ins Co, Smith v Smith, unpublished order of the Court of
Appeals, entered September 11, 2014 (Docket No. 321638).
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court concluded, the purpose of § 3163(4) is to extend coverage to non-occupants of motor
vehicles. Thus, the court held that defendant was liable for benefits.
Defendant argues that the trial court erred. We review de novo a trial court’s decision on
a motion for summary disposition, Latham v Barton Malow Co, 480 Mich. 105, 111; 746 NW2d
868 (2008), as well as issues of statutory interpretation, Griffith v State Farm Mut Auto Ins Co,
472 Mich. 521, 525-526; 697 NW2d 895 (2005). In reviewing a motion for summary disposition
under MCR 2.116(C)(10), a court considers “affidavits, pleadings, depositions, admissions, and
other documentary evidence submitted by the parties in the light most favorable to the party
opposing the motion.” Greene v A P Prods, Ltd, 475 Mich. 502, 507; 717 NW2d 855 (2006)
(internal quotation marks and citations omitted). A (C)(10) motion “tests the factual support for
a claim and should be granted if there is no genuine issue as to any material fact and the moving
party is entitled to judgment as a matter of law.” MEEMIC Ins Co v DTE Energy Co, 292 Mich
App 278, 280; 807 NW2d 407 (2011).
Michigan’s no-fault insurance act, MCL 500.3101 et seq., establishes the priority of
insurers responsible for an individual’s PIP benefits. Corwin v DaimlerChrysler Ins Co, 296
Mich. App. 242, 254-255; 819 NW2d 68 (2012). Generally, when an individual suffers personal
injuries as the result of a motor vehicle accident, that person looks first to their own no-fault
policy or to a no-fault policy issued to a relative if the injured party and the insured relative are
domiciled in the same household. MCL 500.3114(1); see also Corwin, 296 Mich. App. at 262.
Here, Czap was domiciled with her mother and maternal grandparents in Pennsylvania and was
covered under an insurance policy issued by defendant to her maternal grandparents.
However, defendant argues that MCL 500.3163 operates to remove it from the order of
priority. MCL 500.3163 provides in pertinent part as follows:
(1) An insurer authorized to transact automobile liability insurance and
personal and property protection insurance in this state shall file and maintain a
written certification that any accidental bodily injury or property damage
occurring in this state arising from the ownership, operation, maintenance, or use
of a motor vehicle as a motor vehicle by an out-of-state resident who is insured
under its automobile liability insurance policies, is subject to the personal and
property protection insurance system under this act.
* * *
(4) If an insurer of an out-of-state resident is required to provide benefits
under subsections (1) to (3) to that out-of-state resident for accidental bodily
injury for an accident in which the out-of-state resident was not an occupant of a
motor vehicle registered in this state, the insurer is only liable for the amount of
ultimate loss sustained up to $500,000.00. Benefits under this subsection are not
recoverable to the extent that benefits covering the same loss are available from
other sources, regardless of the nature or number of benefit sources available and
regardless of the nature or form of the benefits.
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In Mills v Auto-Owners Ins, 413 Mich. 567, 568,571-572; 321 NW2d 651 (1982), our
Supreme Court held that because a Wisconsin motorcyclist’s accident with a vehicle operated in
Michigan by a Michigan resident “did not arise out of the use of a motor vehicle by an out-of-
state resident,” the “conditions for liability of an out-of-state insurer set forth in [MCL
500.3163(1)] have not been met.” In Edquist v Cadillac Mut Ins Co, 119 Mich. App. 801, 804;
327 NW2d 368 (1982), this Court held that Mills was “equally applicable to accidents involving
a pedestrian and a motor vehicle.” Over a decade later, this Court explained that “[a]n insurer
becomes liable under [MCL 500.3163] when (1) it is certified in Michigan, (2) there exists an
automobile liability policy between the nonresident and the certified carrier, and (3) there is a
sufficient causal relationship between the nonresident’s injuries and the ownership, operation,
maintenance, or use of a motor vehicle as a motor vehicle.” Goldstein v Progressive Cas Ins Co,
218 Mich. App. 105, 109; 553 NW2d 353 (1996). Those requirements were reiterated in Tevis v
Amex Assurance Co, 283 Mich. App. 76, 83; 770 NW2d 16 (2009), and Perkins v Auto-Owners
Ins Co, 301 Mich. App. 658, 666-667; 837 NW2d 32 (2013).
Accordingly, based on both the plain language of the statute and the applicable caselaw,
Czap was not entitled to claim PIP-benefits from defendant pursuant to MCL 500.3163(1)
because her injuries did not arise “from the ownership, operation, maintenance, or use of a motor
vehicle as a motor vehicle by an out-of-state resident.” Czap’s injuries arose when she was a
pedestrian; they had nothing to do with her ownership, operation, maintenance, or use of a motor
vehicle as a motor vehicle.
Plaintiff argues that in adopting § 3163(4), the Legislature implicitly overruled both Mills
and Edquist, and that it amends § 3163(1) to provide coverage to non-occupants of motor
vehicles.
The primary goal of statutory interpretation is to ascertain and give effect
to the intent of the Legislature in enacting a provision. The first criterion in
determining intent is the language of the statute. If the statutory language is clear
and unambiguous, judicial construction in neither required nor permitted, and
courts must apply the statute as written. . . . A liberal construction in favor of the
public and the policyholders is preferred when the statute involved is an insurance
law. [Tevis, 283 Mich. App. at 81 (citations omitted).]
Looking at the plain language of MCL 500.3163(4), it is clear that the use of the word
“If” at the start of the subsection indicates that its application is conditioned on an insurer of an
out-of-state resident’s obligation to provide benefits under §§ 3163(1) to (3). In other words, §
3163(4) sets forth a conditional compound. Because plaintiff cannot show that defendant is
“required to provide benefits” pursuant to § 3163(1), § 3163(4) does not apply.
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We reverse the trial court’s grant of summary disposition and remand for entry of
summary disposition in favor of defendant. We do not retain jurisdiction.
/s/ Michael F. Gadola
/s/ Kathleen Jansen
/s/ Jane M. Beckering
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