CONSTRUCTIVE OWNERSHIP IS A QUESTION OF FACT

Fiona E. Heady

In a recent, unpublished decision, McKinnie v State Farm (Unpub COA No. 353995, 10/14/21), the Court analyzed domicile and constructive ownership of a vehicle related to a PIP claim. Plaintiffs, Kelley McKinnie and DeJanae McKinnie, were involved in a motor vehicle accident in Michigan (“MI”), while passengers in a Range Rover titled to Julia Kincaid (“Kincaid”) and insured under a California policy issued by State Farm Mutual Automobile Insurance Company. Plaintiff’s sought benefits under MCL 500.3163. State Farm denied Plaintiffs’ claim arguing that the Range Rover was titled in MI, and was owned and driven by a MI resident. In response, Plaintiffs argued that there was a question of fact as to whether Kincaid had changed her residence to California (“CA”) where she was staying in the seven months preceding the accident, and that there was also a question of fact as to whether Dennis McKinnie (Kincaid’s son, and a CA resident) was the constructive owner of the vehicle as it was purchased for Dennis and was used in the state of CA until the two (2) weeks prior to the accident. The trial court denied State Farm’s MSD finding that reasonable minds could differ as to Kincaid’s domicile and Dennis’ constructive ownership of the vehicle.

On appeal, the Court of Appeals noted that for purposes of MCL 500.3163, residence is legally synonymous with domicile and domicile means “the place where a person has his true, fixed, permanent home, and principal establishment, and to which, whenever he is absent, he has the intention of returning.” Grange Ins Co v Lawrence, 494 Mich 475 (2013). A person can only have one domicile which can only be changed by acquiring another domicile. Factors to be considered are: (1) intent of the person, (2) the relationship between the person and other members of the household, (3) whether the place where the person lives is in the same house, within the same curtilage or same premises, and (4) existence of another place of lodging by the person alleging residence. Other relevant factors can be the person’s mailing address, address on their driver’s license or other documents, and whether a room is maintained for the person at their claimed residence.

The Court found that Kincaid was clearly domiciled in MI as she testified that she was only in CA for a visit, intended to stay in MI, and while in CA she stayed in Dennis’ spare room, and was not paying rent. All her possessions and financial accounts remained in MI, her husband remained in MI in the home they shared together prior to her visit to CA, and she continued to receive all her mail. A single letter addressed to Kincaid at the CA residence, combined with her purchase of a CA car insurance policy where she listed Dennis’ address as her own, was insufficient, alone, to establish a question of fact as to whether Kincaid was domiciled in CA or MI at the time of the accident. The Court held Kincaid was domiciled in MI at all times relevant to Plaintiffs’ claims.

The Court found a genuine issue of material fact existed, however, as to whether Dennis Kincaid was a constructive owner of the Range Rover. To be an “owner” under MCL 500.3101(l)(i), a person must use “the vehicle in ways that comport with the concepts of ownership”, and where a “spotty and exceptional pattern” of usage may not comport with ownership, a “regular pattern of unsupervised usage” would. Ardt v Titan Ins Co, 233 MA 685 (1999). The focus of the analysis must be on “the nature of the person’s right to use the vehicle.” Twichel v MIC Gen Ins Corp, 469 Mich 524 (2004).

Testimony in this case was that, although Kincaid bought the vehicle for Dennis, Dennis exclusively possessed and drove the vehicle for years prior to the accident. He testified he “gave” the vehicle back to Kincaid two weeks prior to the accident, but in an affidavit he stated he “lent” it to her for her return trip to MI, but “did not contemplate that [Kincaid] would permanently possess the Rover.” The Court determined that a reasonable juror could conclude that Dennis maintained the right to use the vehicle even if he “lent” the vehicle temporarily to his mother, or that Dennis relinquished his right to use the vehicle by giving it to Kincaid. The Court noted that physical possession of the vehicle was not determinative. The Court concluded that although close, when viewed in the light most favorable to Plaintiff, the evidence was sufficient to create a question of fact as to constructive ownership which required the denial of State Farm’s motion for dismissal.