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September 25, 2020
In Micela v Cherokee Insurance Company, et al, ___ Mich App ___ (9/17/20), Plaintiff was the title owner of a 2009 Volvo Tractor semi-truck. Plaintiff had a personal policy of automobile insurance through Auto Club. He was a self-employed truck driver, working as an independent-contractor with Universal Am-Can, Ltd. Universal leased the semi-truck from Plaintiff and maintained business automobile insurance through Cherokee Insurance Company. The Court of Appeals determined, for the purposes of applying the No-Fault Act, both Universal and Plaintiff were “owners” of the semi-truck at the time of Plaintiff’s injury.
Relying upon Adanalic v Harco Nat. Ins. Co., 309 Mich App 173, (2015), Cherokee had moved for summary disposition in the trial court arguing that Plaintiff was an independent contractor so his personal policy of automobile insurance was in the highest order of priority under MCL 500.3114(1) and (3). In contrast, Auto Club, relying upon Celina Mut. Ins. Co. v Lakes States Ins. Co., 452 Mich 84, (1996) and Besic v Citizens Ins. Co. of the Midwest, 290 Mich App 19, (2010), argued that Plaintiff was an employee of himself and, because he was an employee, Cherokee was in the highest order of priority. The trial court determined that Plaintiff was not an employee of Universal but was instead an independent contractor. Therefore, applying the analysis and conclusion of Adanalic, the trial court found Auto Club was in the highest order of priority for payment of Plaintiff’s PIP benefits.
On appeal, the Court determined that neither Adanalic, Celina, nor Besic controls, but instead the three cases can be harmonized. The Court found no question that Auto Club is Plaintiff’s personal insurer and thus, by default, is the insurer of highest priority, but also found that both Plaintiff and Universal were “owners” of the semi-truck, and that Cherokee insured the semi-truck in which Plaintiff was injured so the priority exception in MCL 500.3114(3) might apply if Plaintiff was an “employee”. The Court found the trial court properly identified Plaintiff as an independent contractor of Universal, not its employee, but noted the trial court failed to consider that Plaintiff was self-employed.
The Court then reaffirmed and adopted the reasoning and analysis in the unpublished decision in Sappington v Shoemake, (October 30, 2018)(Docket No. 337994), which harmonized the cases of Adanalic, Besic and Celina. In Sappington, the Court found that a person who is self-employed is an employee of himself, and that an independent contractor can simultaneously be an independent contractor of one entity while being an employee of another entity. The Miclea Court found Plaintiff was not an employee of Universal, but he was an employee of himself at the time of the accident, as Plaintiff was self-employed. Noting that the Legislature’s intent in enacting MCL 500.3114(3) was to shift the burden of providing PIP benefits to the insurers of vehicles in certain commercial contexts, the Court held that because Plaintiff was an employee, and because Plaintiff “owned” the semi-truck, MCL 500.3114(3) applied and Cherokee, as the insurer of the semi-truck, is the insurer of highest priority for payment of PIP benefits to Plaintiff.
The dissent by Justice Kristen Frank Kelly points out the counter intuitive nature of this case noting, that Plaintiff was not working as an employee for himself at the time of the accident. He was working for Universal as an independent contractor when the accident happened. As such, MCL 500.3114(3) should not apply because Plaintiff was not working on behalf of his self-employer. Therefore, Judge Frank Kelly found that Auto Club, as Plaintiff’s personal automobile insurer, should be first in priority for payment of PIP benefits.