April 29, 2016
In the case of Kelli Shinn v State of Michigan Secretary of State Assigned Claims Facility, American Country Insurance Company, and Farmers Insurance Exchange, a Court of Appeals panel was asked to decide whether Plaintiff was entitled to PIP benefits while occupying her uninsured, and not operated, motor vehicle.
Plaintiff, Kelli Shinn, owned a vehicle which was not insured but was also not operated. At the time of the incident, Ms. Shinn’s vehicle was parked on the street outside of her house. While on a walk with her child, Ms. Shinn’s opened the door to her vehicle and sat partially inside the front passenger seat to rest. While seated in this fashion, another man drove his vehicle into the rear of Ms. Shinn’s vehicle. Defendant Farmers Insurance Exchange was assigned the claim through the Michigan Assigned Claims Plan (MACP). Defendant American Country Insurance Company (ACIC) insured the vehicle that rear-ended the Ms. Shinn’s vehicle. The trial court granted summary disposition in favor of Defendants finding that Ms. Shinn was not entitled to coverage. Ms. Shinn appealed.
The parties relied on prior cases discussing the parked car exclusion set forth in MCL 500.3106. For instance, in Heard v State Farm, 414 Mich 139 (1980), it was held that a parked car is only involved in an accident if one of the exceptions to the parked car exclusion applies. The Heard court ruled that when a parked vehicle is not involved in the accident and is not being used as a motor vehicle – but is more like any other stationary object that could be hit by a car, such as a tree – the owner of the uninsured vehicle would not be precluded from receiving PIP benefits. Without any discussion of whether security was required under MCL 500.3101, the Heard court ruled that the Plaintiff was entitled to benefits.
The parties also relied on a somewhat more recent case factually similar to the facts in Shinn. In, Childs v American Commercial Liability Ins Co, 177 Mich App 589 (1989), plaintiff was sitting on the back of his uninsured, parked truck when he was struck by another vehicle. (Plaintiff had insurance on other vehicles he owned through American Commercial Liability Ins Co). Plaintiff was found to be barred from coverage under MCL 500.3113(b) because the Court found that sitting on the back of a truck was “identifiable with the use of the truck as a motor vehicle.” Again, without discussion to whether any security was actually required, the Childs court awarded summary disposition in favor of the insurer.
Unlike Heard and Childs, the Shinn Court focused on the issue of whether Ms. Shinn was required to insure her vehicle pursuant to MCL 500.3101. The No-Fault Act mandates that “security is only required to be in effect during the period the motor vehicle is driven or moved on a highway.” In this case, Ms. Shinn had recently taken her vehicle for repairs. Several days before the accident in question, the vehicle had been returned to Ms. Shinn after completion of repairs. The Court ruled that “[b]ecause any driving or movement on a highway was completed several days before the accident,” Ms. Shinn was not required to have insured the vehicle. The Court ruled that Ms. Shinn was occupying her vehicle at the time of the accident so the parked car exclusion did not apply.
In the end, the Court upheld summary disposition in favor of ACIC under MCL 500.3114 since it insured the vehicle which struck Ms. Shinn’s vehicle, not the owner or registrant of the Ms. Shinn’s vehicle. However, the Court reversed entry of summary disposition in favor of the MACP insurer, Farmers, and held that Ms. Shinn was entitled to receive PIP benefits from Farmers.
The primary focus of this case was whether the security required under MCL 500.3101 had to be in place for Ms. Shinn’s vehicle at the time of the accident. The Court ruled that it did not. This is significant with regard to future coverage questions which involve vehicles not being operated at the time of loss. According to the Shinn Court, if a vehicle is not being moved on a highway for several days, it is not required to be insured.