Author(s): Gregory A. Light



In the recently published opinion of Roberts v Titan Insurance Company, Judges Hoekstra, Whitbeck, and Talbot were bound to follow the previously published opinion in Butterworth Hospital v Farm Bureau Insurance Company, 225 Mich App 244 (1997) that adopted the plurality decision by the Michigan Supreme Court in Priesman v Meridian Mutual Insurance Company, 441 Mich 60 (1992) that created a family joyriding exception to MCL 500.3113(a), prohibiting no-fault benefits to individuals injured in a vehicle taken unlawfully. However, in rendering this decision, the judges in Roberts expressly stated that in the absence of Butterworth, they would have followed Justice Griffin’s dissent in Priesman, and as such, they declared a conflict between Roberts and Butterworth pursuant to MCR 7.215(J)(2).

Section 3113 of the No-Fault Insurance Act provides, in pertinent part, as follows:

A person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident any of the following circumstances existed:

(a) The person was using a motor vehicle or motorcycle which he or she had taken unlawfully, unless the person reasonably believed that he or she was entitled to take and use the vehicle.

In the instant case, 12 year old Kyle Roberts was seriously injured when he crashed a Ford Explorer he was driving into a tree. Steven Vandenberg was the titled owner of the Explorer and also the landlord and house mate of Kyle Roberts and his mother, Lillian Irwin. When Roberts and Irwin began renting from Vandenberg, their vehicle was in disrepair and Vandenberg offered use of the Explorer to Irwin. From that point in May 2005 until the accident in June 2005, Irwin utilized the Explorer exclusively. However, the vehicle remained titled in Vandenberg’s name and it was insured by Vandenberg.

Irwin also maintained No-Fault Insurance through Titan Insurance Company under a policy that was originally purchased to cover a Jeep Grand Cherokee, but then changed over to a Ford Escort in April 2005. When Irwin switched the insurance to the Escort, she asserted it was titled in her name, rather than the name of her son, Vernon Austin, III. A title search later revealed that the Escort was in fact titled in Austin’s name.

Titan denied No-Fault Benefits to Roberts on the grounds that he had unlawfully taken the Explorer. Roberts filed a Complaint alleging breach of the insurance policy, with Titan moving for summary disposition arguing that Roberts unlawfully took the Explorer and secondarily that the policy was void ab initio due to Irwin’s misrepresentations regarding ownership of the Escort. The trial court granted Titan’s Motion for Summary Disposition, holding as follows:

Without question Roberts unlawfully took the Explorer. Roberts did not have a reasonable belief that he was entitled to take and use the vehicle. The family joyriding exception to MCL 500.3113(a) as stated by the Priesman court is not binding on this court or case. Recovery is barred pursuant to MCL 500.3113(a) and the language contained in Titan’s policy. As such, it is not necessary for this court to address Titan’s misrepresentation argument, whether Irwin qualified as an owner, whether Irwin had an insurable interest, whether the innocent third-party doctrine applies, or whether Titan’s policy bars recovery.

In applying the family member joyriding exception to the facts in the instant case, the Court of Appeals first assessed whether or not Irwin’s use of the vehicle with the permission of Vandenberg qualified her as an “owner” of the vehicle. Pursuant to the No-Fault Insurance Act, “owner” is defined as “a person renting a motor vehicle or having the use thereof, under a lease or otherwise, for a period that is greater than 30 days”. MCL 500.3101(2)(g)(i). In the instant case, the Court of Appeals reasoned that while it was undisputed Irwin did not hold legal title to the Explorer in question, she clearly used the vehicle for a period greater than 30 days and as such, did qualify as a “owner” under the aforementioned statute.

The Court of Appeals next looked at Roberts’ intent to determine whether there was any evidence on his part to steal the vehicle. According to Roberts’ testimony, he was intoxicated at the time and he simply decided to take the vehicle for a ride. Therefore, the Court of Appeals determined that because Roberts was a family member who was joyriding, rather than attempting to steal the vehicle, he did not unlawfully take the car and therefore would not be excluded from coverage.

Titan nevertheless argued that pursuant to the policy language, irrespective of the statute, the vehicle was taken unlawfully and therefore coverage would not apply. The Court of Appeals relied upon Cruz v State Farm Mutual Automobile Company, 466 Mich 588 (2002) to harmonize the contract language with the statute, preferring a construction of the contract that would render it legal and enforceable, such that the language in Titan’s policy would not apply to joyriding family members. Id at 599. Accordingly, pursuant to both the aforementioned statute and Titan’s own insurance policy, the policy exclusion does not apply to a joyriding family member.

Finally, the Court of Appeals assessed whether or not Irwin’s misrepresentation in obtaining insurance coverage voided the contract and prevented recovery to her son Roberts. There was no dispute that Irwin lied to Titan when she indicated that she owned the Escort, rather than her son, to obtain lower premiums for same. Nevertheless, relying on Darnell v Auto-Owners Insurance Company, 142 Mich App 1 (1985) the Court of Appeals ruled that innocent third-parties are afforded coverage if the innocent party did not participate in the alleged fraud. Therefore, the relevant inquiry was whether or not Roberts was innocent with respect to the misrepresentation that was made to Titan, or was actually involved in defrauding Titan. Clearly, the Court of Appeals determined that Roberts was not involved in any misrepresentation of facts in this case and as such, coverage can not be denied to him on the basis of his mother’s improper actions. The Court of Appeals in Roberts determined that the family joyriding exception did apply, entitling Roberts to No-Fault benefits for the injuries sustained in the subject accident. The trial court’s grant of summary disposition in favor of Titan was therefore reversed. The Court of Appeals stated it only did this due to the fact it was bound by Butterworth’s adoption of the Priesman plurality’s creation of a family joyriding exception and therefore declared a conflict between this case and Butterworth pursuant to MCR 7.215(J)(2).