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Volume XXV, No. 20, November 20, 2013 

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

From the Editor: Sarah Nadeau 

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A HOTEL SHUTTLE VAN’S PRIMARY PURPOSE WAS TRANSPORTING PASSENGERS, AND TRANSPORTING PASSENGERS WAS MORE THAN AN INCIDENTAL PART OF THE HOTEL’S BUSINESS SO THE VAN’S INSURER WAS HIGHEST PRIORITY PURSUANT TO MCL 500.3114(2).

CONTRIBUTOR – BRYAN VALENTINE

 

On October 24, 2013, the Michigan Court of Appeals issued an unpublished, Per Curiam opinion in Schiller v Home-Owners and Allstate (Docket No. 310085).  The Court affirmed the trial court’s ruling that Home-Owners is the highest in priority to provide No-Fault benefits to Ginger Schiller arising out of injuries that she sustained exiting a hotel’s shuttle to the airport.

In March of 2010, Ginger Schiller stayed at the Howard Johnson Hotel in Romulus, Michigan because adverse weather had prevented her from her intended air travel; the airline had arranged this hotel room for her.  The next day, she boarded a courtesy van from the hotel to the airport.  While exiting the van at the airport, Ms. Schiller lost her balance and fell sustaining neck and back injuries that required surgery to repair.

Home-Owners insured the shuttle van and Allstate was the personal insurer of Ms. Schiller.  Ms. Schiller sued both insurance companies for No-Fault benefits.  The trial court granted Allstate’s motion for summary disposition, ruling that Home-Owners is the highest priority insurer in this instance.

The primary issue in this matter was the interpretation of MCL 500.3114(2) and whether the hotel that provided the shuttle van was in “in the business of transporting passengers.”  The Court of Appeals explained that under the No-Fault Act injured persons are to look to their personal insurer first unless an exception applies.  One such exception is MCL 500.3114(2) which applies to commercial situations; “it reflects the Legislature’s intent to place the burden of providing PIP benefits on the insurers of vehicles used in commercial situations instead of insurers of injured individuals.”

The Court of Appeals applied the two-part test outlined in Farmers Ins Exch v AAA of Michigan, 256 Mich App 691 (2003); the “primary purpose/incidental nature” test is a two part test:

• Was transporting passengers the vehicle’s primary purpose?

• Was the transportation of the passengers was an incidental or small part of the actual business in question?

The Court of Appeals determined that the primary purpose, if not the exclusive purpose, of the courtesy shuttle van was to transport passengers to and from the airport. Thus, the first prong of the test was satisfied.  The Court also determined that the second prong of the test was satisfied.  It reasoned that, in operating a hotel near an airport, the shuttle service was a significant hotel amenity and that providing lodging and shuttle service go hand in hand.  The Court also noted that the hotel advertised the shuttle as part of its “Stay and Fly Package.”  A major draw to the hotel, invariably, was the fact that it offered a courtesy shuttle.  The Court of Appeals determined that the shuttle was a significant part of the hotel’s business.

Thus, Home-Owners, the insurer of the shuttle van, was the highest in priority to provide No-Fault benefits to Ms. Schiller.  This is the latest in a small line of cases interpreting MCL 500.3114(2).  The Court of Appeals has been consistent in explaining that transporting passengers does not have to be the primary purpose of the business in question, only that it is a significant part of the business and not an incidental or small portion of the business.

 

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Happy Thanksgiving! From your Friends at Garan Lucow Miller!