October 30, 2017
Volume XXIX, No. 23

 

COURT OF APPEALS APPLIES EXPRESS POLICY LANGUAGETO DETERMINE PRIORITY OF INSURER

 By Melissa N. Mead

In Gurski v Farm Bureau Insurance Company, ___ Mich App ___ (No. 332118, 10/17/17), the Michigan Court of Appeals relied upon the express language of the policy to determine for which vehicles PIP coverage was afforded and for whom such coverage was available. In doing so, the Court found that Farm Bureau, which did not insure the involved motor vehicle or its owner for PIP coverage, could not be liable for injuries sustained by the automotive mechanic conducting repairs on the involved vehicle.

Plaintiff, David Gurski, was the owner of an automotive repair center. On June 24, 2013, he sustained injuries when a vehicle on which he was working slid into gear and ran over his leg. Andy Frazier owned the involved motor vehicle. Mr. Frazier also owned a business which was the named insured on an insurance policy issued by Farm Bureau. Mr. Frazier was listed as a “designated insured” on that policy for purposes of liability coverage only. The policy also listed the involved vehicle as a covered vehicle, but specifically did not provide PIP coverage for that vehicle.

Plaintiff sought to recover PIP benefits from three insurers: Motorists, which insured plaintiff’s business, Farm Bureau, and the Michigan Assigned Claims Plan. The MACP refused to assign plaintiff’s claim to an insurer believing that Farm Bureau was in highest priority for payment of PIP benefits to plaintiff. It was undisputed that Motorists was not liable for payment of PIP benefits because plaintiff was not covered for PIP under its policy. The question, then, was whether Farm Bureau was liable to plaintiff for PIP benefits.

The trial court held that plaintiff qualified as an “insured” under the terms of the Farm Bureau policy, and the involved vehicle was a “covered auto” under the terms of the policy because it was listed for comprehensive coverage, such that plaintiff was entitled to recover PIP benefits from Farm Bureau. The trial court also ruled that MCL 500.3115(1) provided PIP coverage to plaintiff under the Farm Bureau policy, as it insured the owner or registrant of the involved motor vehicle. Farm Bureau appealed.

The Michigan Court of Appeals reversed the trial court’s findings. First, the Court of Appeals found that based upon the clear and unambiguous language of the policy, the involved vehicle was not a “covered auto” for purposes of PIP benefits, but rather the policy only provided comprehensive coverage for that vehicle. Thus, while plaintiff qualified as an “insured” under the terms of the Farm Bureau policy, the policy itself did not provide the coverage plaintiff claimed.

Second, the Court of Appeals noted that MCL 500.3115(1) can require an insurer to provide PIP benefits although the insurer did not provide PIP coverage for the involved motor vehicle. However, the Court held it was essential that the owner of the involved vehicle to have PIP coverage from some source (whether it be the insurer of the vehicle of another insurer). Here, the owner of the vehicle – Mr. Frazier – did not have PIP coverage. Therefore, even though the Farm Bureau policy provided PIP coverage for other vehicles owned by Mr. Frazier and his business, there was no PIP coverage for Mr. Frazier and plaintiff could not recover PIP benefits from Farm Bureau pursuant to MCL 500.3115(1).

Melissa is an Associate in our Detroit Office.

She can be reached at (313) 446-5536 or mmead@garanlucow.com

 

 

 

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