COURT OF APPEALS ADDRESSES CONSTRUCTIVE OWNERSHIP

Andrew J. Beck

In DGI v Farm Bureau General Ins Co, et al, plaintiff suffered catastrophic injuries during a motor vehicle accident in which he was operating a 1992 Kenworth semi-tractor trailer hauling freight in Ohio. The Kenworth tractor was registered and titled to Droptine Trucking, LLC, of which Plaintiff was the sole member. Plaintiff had a no-fault bobtail policy for the tractor, issued by OOIDA Risk Retention Group, Inc., providing coverage only when it was not hauling a load under dispatch. The tractor was also under a long-term lease to Better Management Corporation, which secured an Ohio commercial insurance policy from Great West Casualty Company covering the tractor. The Great West policy did not provide Michigan PIP coverage, however, because the accident occurred in Ohio.

OOIDA was granted summary disposition because Plaintiff was hauling a load under dispatch at the time of the accident so the bobtail policy did not apply. Great West was granted summary disposition because the policy did not provide PIP coverage for Plaintiff’s Ohio accident.

At trial, the Court determined that Plaintiff was an owner of the Kenwood tractor on the basis that he “was on the title to the cab of this truck.” Farm Bureau then moved for a directed verdict, arguing that because Plaintiff was an owner of the tractor, and the tractor was uninsured, Plaintiff was precluded from receiving PIP benefits under MCL 500.3113(b). The Court denied Farm Bureau’s motion finding that Plaintiff maintained the necessary security through the carrier coverage, his bobtail policy, and the personal auto(s) Farm Bureau policy.

On appeal, the Court of Appeals affirmed that Plaintiff was not a constructive owner of the tractor in his individual capacity. The Court noted the parties agreed that Droptine was an owner of the tractor because it had title to the tractor, and that Better Management was an owner of the tractor as well, via a long-term lease. The Court then determined that Plaintiff was not an owner of the tractor because Plaintiff, in his individual capacity, did not have use of the tractor for more than 30 days. MCL 500.311(3)(l)(i). Rather, it was undisputed that the tractor was company property, and therefore the right to use the tractor belonged to Droptine. There was no evidence that Plaintiff ever used the tractor in his individual capacity, for his personal use. The Court concluded that Droptine was the operative “person” that had the right to use the tractor and that Plaintiff was at all times Droptine’s agent with respect to his use of the tractor. Therefore, Farm Bureau was responsible for payment of PIP benefits to Plaintiff.

Farm Bureau also argued that Plaintiff’s claims were barred by collateral estoppel because his claims for damages for injuries suffered in the subject accident had already been litigated in a third-party negligence action in Ohio. The Court of Appeals disagreed, noting that the jury in Plaintiff’s third-party negligence case only found that the accident did not proximately injure Plaintiff. In the present case, the issue was whether Plaintiff’s injuries “arose out of” the subject accident. Thus, the two issues were not identical as required for collateral estoppel to apply. Therefore, the Trial Court did not err in denying Farm Bureau’s motion for summary disposition.