Insured Entitled To PIP Benefits After Injury from Direct Physical Contact With Property Being Loaded Onto A Parked Vehicle 

In the recent published opinion of Salko Adanalic, Spectrum Health Hospitals, and Orthopaedic Associates of Michigan v Harco National Insurance Company and Michigan Millers Mutual Insurance Company, (Docket No. 317764, issued February 5, 2015)[1], the Michigan Court of Appeals affirmed in part and reversed in part, the trial court’s decision that plaintiff was entitled to no-fault PIP benefits after being injured from direct physical contact with property being loaded onto, and unloaded from, a parked vehicle; that Michigan Millers was the insurer first in priority and responsible for plaintiff’s no-fault PIP benefits and payment of penalty interest; and that Michigan Millers was liable for payment of attorney fees for delaying payment of PIP benefits.

Plaintiff, Salka Adanalic, contracted with DIS Transportation to pick up, haul and deliver various loads of cargo. Plaintiff operated a truck and semi–trailer that was owned by DIS Transportation and insured by Harco National Insurance Company. On the date of plaintiff’s claimed injuries, plaintiff backed the semi-trailer up to a box truck to transfer loaded pallets.  A ramp was extended between the semi and the box truck to facilitate the transfer. While plaintiff was in the process of moving a loaded pallet on the ramp, the pallet fell pulling plaintiff down with it.

Plaintiff filed a claim for no-fault PIP benefits from Michigan Millers who insured his wife, as well as Harco National Insurance Company who insured the truck and semi-trailer. Plaintiff Spectrum and Orthopaedic filed intervening complaints against defendants. Both insurers denied coverage.  The trial court found plaintiff was entitled to recover PIP benefits and that Michigan Millers was the insurer in highest priority and so required to pay PIP benefits, as well as penalty interest.

On appeal, Michigan Millers argued that plaintiff’s injuries did not satisfy any of the “parked vehicle exceptions” enumerated in MCL 500.3106(1). Michigan Millers argued that plaintiff’s injuries did not result from contact with the pallet, but rather from contact with the ground when he fell. The Court of Appeals noted that plaintiff was pulling the pallet with straps wrapped around the pallet when the ramp collapsed and the pallet fell to the ground, causing plaintiff to fall to the ground. The Court found the statute was satisfied where plaintiff’s physical contact with the pallet caused him to fall to the ground, causing his injuries.

Michigan Millers further argued that it had no responsibility to pay PIP benefits because workers’ compensation benefits were “available” to plaintiff under MCL 500.3106(2).  The Court of Appeals disagreed. DIS had denied workers’ compensation benefits to plaintiff claiming that plaintiff was an independent contractor and not an employee and, thus, the Court found those benefits were not “available” to plaintiff for purposes of MCL 500.3106(2). The Court of Appeals further noted that even if a dispute arose as to plaintiff’s entitlement to workers’ compensation benefits, Michigan Millers was not entitled to withhold payment of no-fault PIP benefits under MCL 500.3106(2) until the workers’ compensation determination was made and that it had proper recourse as plaintiff’s subrogee to seek reimbursement from DIS.

The Court of Appeals further disagreed with Michigan Millers’ argument that plaintiff was an employee of DIS occupying an employer furnished vehicle at the time of the accident and, therefore, DIS’s no-fault insurer was the proper insurer to provide PIP coverage to plaintiff pursuant to MCL 500.3114(3). The Court of Appeals agreed with the trial court’s decision and held that plaintiff was not an “employee” under MCL 500.3114(3) by applying the “economic realities test.”  Noting first that the “Contractor Operator Agreement” identified the relationship between plaintiff and DIS as a “carrier-independent contractor relationship,” the Court then found: (1) plaintiff had the contractual right to refuse any load offered by DIS and to determine the means and methods of the performance of all transportation services; (2) plaintiff was paid on commission, and was responsible for withholding state and federal taxes; (3) the Agreement was terminable at will by either party; and (4) plaintiff’s duties were not an integral part of DIS’ business. Therefore, Michigan Millers was the insurer in proper priority for payment of no-fault PIP benefits.

Finally, the Court of Appeals found that Michigan Millers’ refusal to pay PIP benefits to plaintiff was unreasonable where there was no legitimate question of statutory interpretation at issue.  Thus, Michigan Millers was responsible for payment of plaintiffs’ reasonable attorney fees.

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Save The Date! | Thursday, June 18, 2015 | Windy City Seminar

 The 2015 Windy City Seminar will take place on Thursday, June 18, 2015 at the Chicago Marriott Schaumburg.

Illinois Continuing Education Credits will be offered. 

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