In a published opinion, Bronson v State Auto, ____ Mich App _____ (Nov. 7, 2019) (Doc. No. 345332) the Court of Appeals upheld the operation of a Named-Excluded Driver endorsement as applied to Michigan No-Fault personal protection insurance (PIP) claims. In Bronson, Victor Caballero was severely injured in an automobile accident while operating a vehicle insured by State Auto. However, the policy, which had been issued to Maria Caballero, identified Victor as an excluded driver on the Named Driver Exclusion Endorsement, and on the Certificate of No-Fault Insurance. The Declarations Page of the Policy contained the full language of the warning required by MCL 500.3009(2) for a Named Driver Exclusion, and further stated that “a named excluded driver is not entitled to be paid personal protection benefits for accidental bodily injury” if the named excluded driver was driving that car at the time of the accident.
Bronson Hospital filed suit as Plaintiff under an Assignment of Rights it had obtained from Victor. Bronson argued under a contract interpretation theory that it was entitled to recover PIP benefits from the insurer because the policy’s Named Driver Exclusion Endorsement failed to specify that PIP benefits would not apply if Victor operated a covered motor vehicle. Although the Defendant insurer had argued there was no coverage under a theory of statutory interpretation, the Trial Court granted summary disposition in favor of the insurer under a theory of contract interpretation. The Trial Court’s reasoning was that the language of the policy as a whole reflected an intent to exclude PIP benefits when an excluded driver, such as Victor, was driving a covered vehicle. Bronson appealed.
The Court of Appeals affirmed the Trial Court’s decision, but did so under the statutory interpretation argument the Defendant insurer had originally argued before the Trial Court. The Court noted that Victor had been properly identified as a Named Excluded Driver under the policy consistent with the requirements of MCL 500.3109(2). As a result, the Court held that Victor was excluded from PIP benefits by the operation of MCL 500.3113(d), which states that “a person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident…the person was operating a motor vehicle…to which he or she was named as an excluded operator as allowed under section 3009(2).”
MCL 500.3113(d) was a statutory change by the Legislature which became effective January 13, 2015, and was in effect as of the date of Victor’s accident. The Court therefore held as a matter of interpretation of statutory law, that pursuant to MCL 500.3113(d) and MCL 500.3009(2), Victor was not entitled to recover PIP benefits. As a result, Plaintiff Bronson was not entitled to recover those benefits under an assignment of rights, either.
This case was handled on behalf of State Auto by Garan Lucow Miller, P.C. attorneys Ladd Culbertson at the trial level, and Daniel Saylor on appeal.
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Sarah Nadeau, Editor of the Law Fax Publication, is a Shareholder in our Detroit Office. Sarah can be reached at 313.446.1530 or snadeau@garanlucow.com
