COURT OF APPEALS DECIPHERS THE PLAIN MEANING OF THE PHRASE "AVAILABLE FOR THE REGULAR USE OF" IN A CASE INVOLVING A LYFT DRIVER

Charlynn Turner

In a new, published opinion, Duato v Progressive, ___ Mich App ___; ___ NW2d ___ (2023) (Docket No. 362823), the Court of Appeals addressed coverage for a vehicle used in the “rideshare” business through Lyft. Plaintiff owned and insured his own personal vehicle through Progressive, but he rented a 2019 Honda Elantra, which was owned by Flexdrive Services, LLC and insured under a policy issued by Indian Harbor Insurance Company. Plaintiff rented the Elantra for nearly 8 months, opting to allow his weekly rental agreement to automatically renew. Plaintiff never informed Progressive of his use of the Elantra and, so, the Elantra was never added to his Progressive policy as a “covered auto.”

Plaintiff was involved in a motor vehicle accident while operating the Elantra. He then sought UM/UIM benefits from Progressive, but the policy excluded coverage for bodily injury sustained by any person while using or occupying any vehicle that is owned by or “available for the regular use of you, a relative, or a rated resident.” The phrase “available for the regular use” was not defined by the policy, nor had it been directly addressed by a Michigan appellate court in this specific context of UM/UIM coverage. In Duato, whether the vehicle was available for “regular use” was not at issue. Instead, the narrow focus was on “availability” of the vehicle for regular use by the insured.

Specifically, Plaintiff challenged the exclusionary provision, asserting that the Elantra was not “available” for his regular use because under his FlexDrive rental agreement, Plaintiff only had 225 personal use miles (as opposed to his unlimited business use miles) before an additional fee was incurred. Progressive refuted this notion, looking to dictionary definitions of each operative word in the phrase, “available for the regular use of,” along with outside jurisdictions’ treatment of the phrase, as used in other-owned vehicle exclusions. Progressive argued that the Elantra was available for the Plaintiff’s regular use because he admitted to holding the exclusive rights to drive the vehicle under his rental agreement, to possessing the vehicle and the only key, to keeping the vehicle at his home, and to possessing the ability to drive the vehicle at any time even if it increased his operational costs.

The Court of Appeals agreed with Progressive. With respect to “available,” the Court clarified that a vehicle must be “present or ready for immediate use,” “accessible,” and “obtainable.” The Court stated “regular” is defined as “orderly,” “methodical,” and “recurring, attending or functioning at a fixed, uniform, or normal intervals.” “Use” involves “the ability or power to use something” or “the act or practice of employing something.” Notably, the Court did not place a time restriction or limitation on “regular use.”

Applying the plain language of the policy, and the common definitions of the words at issue, the Court held that the Elantra was “available for the regular use of” the Plaintiff because it “was accessible for the normal, recurring use of [p]laintiff.” Plaintiff had the access and ability to use the vehicle whenever he wanted. His use of the vehicle was not sporadic or incidental; rather, Plaintiff’s use was set out by the terms of a rental agreement, constituting a fixed, uniform interval.

The important takeaway from this case is that the phrase “available for the regular use of,” when used in an other-owned vehicle exclusion to UM/UIM coverage, is not to be conflated with how “owner” is defined for purposes of the no-fault act. In other words, unlike the no-fault act, there is no specific time period in which a vehicle needs to be used in order to be available for “regular use.” And it is immaterial whether the insured actually used the vehicle regularly as long as it was available for such use.

GLM appellate specialist Charlynn Turner served as counsel for Progressive in the Court of Appeals. GLM Shareholder Frederick Plumb served as counsel for Progressive in the Circuit Court.