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Volume XXVI, No. 30, December 23, 2014      

From the Law Offices of Garan Lucow Miller, P.C.

From the Editor: Sarah Nadeau 

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WHERE NO OWNER OF A VEHICLE MAINTAINS PIP COVERAGE AS REQUIRED BY MCL 500.3101, NO OWNER MAY RECOVER PIP BENEFITS

By Sarah Nadeau

On November 13, 2014, the Michigan Court of Appeals approved for publication its decision in Barnes v Farmers Insurance Exchange, in which the Court found that MCL 500.3113(b) barred plaintiff’s receipt of PIP benefits where no owner of the vehicle in which plaintiff was driving when she was injured insured the vehicle as required by MCL 500.3101.

In Barnes, plaintiff was injured in a motor vehicle accident while driving a 2004 Chevrolet Cavalier. Plaintiff and her mother, Joyce Burton, who lived together in the same house in Detroit, indisputably were the only titled owners of the Cavalier at the time of the accident. Burton originally insured the Cavalier under an Allstate insurance policy. But she allowed that policy to lapse and instead paid a friend, Mr. Huling, to insure the Cavalier.  The friend bought a State Farm auto policy in 2008.

The Cavalier title listed Burton and plaintiff’s Detroit address, and Huling claimed that he regularly garaged the Cavalier at his home in Novi, but he also admitted that, “from time to time,” he would leave the vehicle at Burton and plaintiff’s home. Plaintiff regularly used the Cavalier to drive herself to and from work and to drive Burton to doctor appointments and to shopping.

Plaintiff applied for PIP benefits, claiming entitlement under the State Farm policy. Following State Farm’s denial of benefits, plaintiff filed the present lawsuit, originally naming the Michigan Assigned Claims Facility (MACF) and State Farm as defendants. Defendant Farmers Insurance Exchange (Farmers) ultimately substituted for the MACF.  State Farm brought a motion for summary disposition on the basis that plaintiff could not recover PIP benefits from it under the policy because the policy only covered the named insured, Huling, and was never intended to benefit plaintiff. In opposing the motion, Farmers argued that Huling was a constructive owner of the vehicle, which meant that, under Michigan’s priority statute, MCL 500.3114, plaintiff had to recover her benefits from State Farm and not it. The trial court granted State Farm’s motion, relying on the facts that the policy applied only to Huling, Huling was not an owner of the vehicle, and Huling was not in the vehicle at the time of the accident. The trial court also noted that Huling obtained the “policy of insurance for his own personal protection.” No party ever appealed the order granting summary disposition in favor of State Farm.

Farmers later brought its motion for summary disposition arguing that, pursuant to MCL 500.3113(b), if an owner fails to obtain PIP coverage, she cannot recover PIP benefits. Farmers relied on the trial court’s dismissal of State Farm, which Farmers argued necessarily meant that Huling was not an owner and, therefore, the Cavalier had no owner’s policy at the time of the accident. Accordingly, Farmers contended that plaintiff, as the owner of an uninsured vehicle involved in an accident, was ineligible for PIP benefits.  The trial court ruled that the no-fault act required at least one of the “owners” to have insurance. It reasoned that because neither plaintiff nor Burton had insurance, plaintiff was barred from seeking benefits under the no-fault act and Farmers was entitled to summary disposition.

On appeal, Plaintiff argued that Iqbal v. Bristol West Ins. Group, 278 MichApp 31; 748 NW2d 574 (2008), allowed her to recover as an “owner” as long as anyone has insurance on the vehicle. The Court of Appeals disagreed, finding that Iqbal could not be read so broadly to apply to even non-“owners.”  Citing to the Iqbal opinion, the Barnes Court opined that the Iqbal Court made it clear that it was addressing the problem of requiring “each and every owner” to maintain insurance on a vehicle. Id. at 40 n. 2. The Iqbal Court found that to hold otherwise would preclude an owner who obtained insurance from receiving PIP benefits as long as any other co-owner did not maintain coverage as well. Id.

The Barnes Court found that, while Iqbal held that each and every owner need not obtain insurance, it did not allow for owners to avoid the consequences of MCL 500.3113(b) if no owner obtained the required insurance. Thus, under the plain language of MCL 500.3113(b), when none of the owners maintains the requisite coverage, no owner may recover PIP benefits. Where, in Barnes, it was undisputed that the only PIP coverage for the Cavalier was supplied by Huling, who the Circuit Court deemed to not be an owner of the Cavalier (a decision which was not appealed), plaintiff was precluded from recovering PIP benefits pursuant to the No-Fault Act.

 

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Register Now! | 2015 Windy City Seminar

Garan Lucow Miller is hosting an all day complimentary seminar for our clients on  Thursday, January 22, 2015 at the Chicago Marriott Schaumburg.

The day will begin with a continental breakfast and registration at 8:30 a.m. followed by the educational program.

Lunch will be provided prior to the Trial and Deposition Boot Camp session.

To register for this complimentary seminar, you may email ecarty@garanlucow.com or contact Ms. Carty at 800.875.7600

New for 2015: All guests who attend the seminar and complete the examination will earn Illinois Continuing Education Credits.

Chicago Marriott Schaumburg / Schaumburg, IL
50 N. Martingale Road
Schaumburg, IL 60173

 

Seminar Agenda is below:

8:30 – 8:55 a.m.             Continental Breakfast and Registration. 

8:55 – 9:00 a.m.             Welcome and Introduction.

                                         Speaker: David A. Couch, Esq. 

9:00 – 10:00 a.m.           Illinois First Party and Third Party Auto Law Updates.

Speaker: Jennifer E. Davis, Esq.

10:00 – 10:15 a.m.          Illinois Premises Liability Law Updates.

Speaker: David A. Couch, Esq.

10:15 – 10:30 a.m.          Illinois Premises Liability Law Comparison With Adjacent State Laws.

Speaker: David A. Couch, Esq.

10:30 – 10:45 a.m.          Break  

10:45 – 11:30 a.m.          Michigan First Party Auto Law Updates and Comparison with Illinois and Indiana Law.

Speaker: John W. Whitman, Esq.

11:30 – 12:00 noon         Michigan Third Party Auto Law Updates and Comparison with Illinois Law.

                                         Speaker: David A. Couch, Esq.

12:00 – 12:15 p.m.         Question and Answer Session. 

12:15 – 12:30 p.m.         Examination on Illinois Law Topics and Comparison with Adjacent State Laws.                                                

12:30 – 1:00 p.m.           Lunch provided at the Chicago Marriott Schaumburg 

1:00 – 4:00 p.m.             Trial and Deposition Boot Camp.

Presenters: John W. Whitman, Jennifer E. Davis, and David A. Couch

 

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HAPPY HOLIDAYS FROM YOUR FRIENDS AT GARAN LUCOW MILLER!

FROM OUR FAMILY TO YOURS, HAVE A HAPPY, HEALTHY,

HOLIDAY SEASON!