June 24, 2025
On July 25, 2024, the Michigan Court of Appeals, in a 2-1 decision, determined that Mr. Abdulla was entitled to recover personal injury protection (“PIP”) benefits from Auto Club Group Insurance Company (“ACGIA”) for injuries he suffered in a motor vehicle accident.
At the time of the accident, Mr. Abdulla was operating a semi-tractor which was registered in Michigan and titled to Tornado Trucking, LLC. Mr. Abdulla was the sole owner of Tornado Trucking which entered into a lease contract with Land Trucking under which Tornado Trucking agreed to haul a trailer full of cargo for Land Trucking. The trailer was full of cargo when the accident occurred.
The tractor was insured under a bobtail insurance policy issued by Great American. That policy excluded PIP coverage when bodily injury arose out of the ownership, operation, maintenance or use of a covered auto while being used in the business of any lessee or while being used to transport cargo of any type. The trailer was insured under a policy issued by Progressive Southeastern Insurance Company which did not list the tractor as a covered vehicle and did not include PIP coverage. Mr. Abdulla lived with his parents and ACGIA provided his father with a no-fault insurance policy that included PIP but did not list Mr. Abdulla as a named insured and did not list the tractor as a covered vehicle.
The Circuit Court determined that, pursuant to MCL 500.3101 and MCL 500.3113(b), Mr. Abdulla maintained proper security on the tractor and thus was entitled to PIP coverage. Further, pursuant to MCL 500.3114(4), ACGIA was the insurer in highest order of priority to pay PIP benefits.
The Court of Appeals majority affirmed that decision, finding that Tornado Trucking, LLC was the owner of the tractor, not Mr. Abdulla, because it held legal title to the tractor, its name appeared on the registration, the tractor was used exclusively to haul loads for Land Trucking and only in furtherance of the business of Tornado Trucking. The majority found that Tornado Trucking is an LLC and thus a separate legal entity distinct from Mr. Abdulla, and even as the sole member of Tornado Trucking, Mr. Abdulla had no interest in specific LLC property but instead was merely an agent of Tornado Trucking. Finally, the majority affirmed that Mr. Abdulla was entitled to recover PIP benefits from ACGIA as a resident relative of its named insured, Mr. Abdulla’s father.
The Court of Appeals dissent noted that “owner” is defined by the no-fault act as a person having the use of a motor vehicle, under lease or otherwise, for more than 30 days, and Mr. Abdulla satisfied that definition. The dissent further noted that Mr. Abdulla was the sole owner of the LLC, the titled and registered owner of the tractor, as well as the sole exclusive driver of the tractor. The dissent found it was against public policy for Mr. Abdulla to isolate himself from liability under the no-fault act by setting up an LLC and putting the tractor in its name. Ardt v Titan Ins Co, 233 Mich App 685 (1999) At a minimum, the dissent believed Mr. Abdulla to be a co-owner of the tractor required to maintain a no-fault policy providing PIP coverage for the tractor. Because the bobtail policy specifically excluded PIP coverage for the tractor under the circumstances of the subject accident, and ACGIA’s policy did not list Mr. Abdulla as a named insured or the tractor as a covered vehicle, there was no PIP policy covering the tractor and Mr. Abdulla should be barred from recovering PIP.
On May 22, 2025, the Michigan Supreme Court issued an Order to schedule oral argument on the application for leave to appeal. Specifically, the Court will consider whether Mr. Abdulla was an “owner” of the motor vehicle at issue (the tractor) within the meaning of MCL 500.3101(3)(l)(i), and whether Mr. Abdulla is entitled to PIP benefits as a relative of ACGIA’s named insured domiciled in the same household. Garan Lucow’s Appellate Department will be paying close attention to this matter and will report on the Supreme Court’s resolution of these issues.