Michigan Court of Appeals; Docket # 347918; Unpublished
Judges Ronayne Krause, Sawyer, and Boonstra; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion; Link to Concurrence & Dissent
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Interpretation of Insurance Contracts
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order in which the trial court declared that plaintiff Farm Bureau General Insurance Company of Michigan had no obligation to defend or indemnify its insured, Omar Hyder Khan, in any action arising out of the subject motor vehicle crash. In so affirming, the Court of Appeals upheld a business-use exclusion in Khan’s automobile insurance policy with Farm Bureau, and determined that because Khan was using the vehicle for business purposes at the time of the collision, he was excluded from liability coverage under the policy pursuant to the exclusion.
Dimple Barua operated a transportation business whereby she would transport individuals from their homes to their places of employment for a small fee. On the morning of the underlying crash, Barua called Khan and asked him to help her transport her customers, and after Khan agreed to help, Barua picked up her customers, drove them to meet Khan, and then Khan began to drive them the rest of the way to their places of employment. En route to their places of employment, however, Khan lost control of his vehicle and struck another. Notably, Khan did not ask Barua for payment for his services, nor did he collect money from his passengers; Barua testified that she planned to collect payment from the passengers later that day when she picked them up to drive them home. After the crash, Khan filed a claim with Farm Bureau for liability coverage and seeking defense and indemnification from any lawsuits arising out of the crash. Farm Bureau moved for summary disposition, asserting that the business-use exception in its policy, which provided, in pertinent part, “[w]e do not provide Liability Coverage for any insured: . . . for liability arising out of the ownership or operation of a vehicle while it is being used to carry persons or property for a fee,” operated to exclude Khan from liability coverage under the policy. The trial court ultimately agreed, and granted Farm Bureau’s motion.
The Court of Appeals affirmed the trial court’s summary disposition order in Farm Bureau’s favor, holding that business-use exceptions in automobile insurance policies like the one at issue in this case are enforceable pursuant to MCL 500.2118(2)(f). Moreover, it did not matter that Khan did not personally receive payment for the commercial use of his vehicle on the day in question, so long as someone did. In this case, Barua’s testimony that she planned on seeking and accepting payment from Khan’s passengers later in the day was sufficient to prove that the vehicle was, in fact, being operated for a business use at the time of the collision.
The trial court found that the exclusion’s plain language was not ambiguous, stating that it “provides that there is no coverage for liability while a vehicle ‘is being used to carry persons or property for a fee’ ” and that nothing in its language “require[d] that Khan himself receive the fee.” We agree with the trial court’s interpretation. Despite appellants’ argument that the exclusion was inapplicable because Khan himself did not receive a fee for transporting passengers that day, the plain language of the exclusion does not require that the insured be the one to receive the fee in order for the exclusion to apply. Rather, the language of the exclusion focuses on the purpose for which the insured’s vehicle was used at the time the accident occurred. The exclusion states that liability coverage is not provided to an insured when “liability aris[es] out of the . . . operation of a vehicle while it is being used to carry persons . . . for a fee.” (Emphasis added). Therefore, the trial court correctly concluded that whether Khan received compensation for transporting passengers for Barua was irrelevant, because the exclusion simply applies when the insured’s vehicle is being used to transport passengers for a fee. Further, because MCL 500.2118(2)(f) specifically allows “insurers to limit insurance coverage on the basis of business use,” Husted, 459 Mich at 506, Farm Bureau’s exclusionary provision is consistent with public policy as expressed by our Legislature. See Woodman v Kera, LLC, 486 Mich 228, 246; 785 NW2d 1 (2010) (noting the “superiority of the Legislature to address matters of public policy” over the courts); Tyler v Livonia Public Schools, 459 Mich 382, 392 n 10; 590 NW2d 560 (1999) (explaining that “[i]t is the Legislature, not we [the courts], who are the people’s representatives and authorized to decide public policy matters such as this”). Therefore, the trial court did not err in its interpretation of the language of the business-use exclusion.
