Michigan Court of Appeals; Docket #271365; Unpublished
Judges Meter, O’Connell, and Davis; 2-1 (O’Connell dissenting); per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Uninsured Motorist Benefits: Uninsured Motorist Coverage in General
CASE SUMMARY:
In this 2-1 unpublished per curiam opinion, decided without oral argument, the Court of Appeals reversed the trial court’s Order granting defendant State Farm summary disposition, holding that under the terms of the uninsured benefits policy, even though plaintiffs rear-ended an uninsured vehicle, plaintiffs are entitled to recover uninsured benefits.
The plaintiffs in this case rear-ended an uninsured motor vehicle, after that motor vehicle rear-ended another vehicle. Defendant denied plaintiffs’ claim for uninsured benefits on the basis plaintiffs were more than 50% at fault for the accident. The trial court agreed, and granted defendant’s motion for summary disposition. The court also entered a default judgment against the driver and owner of the uninsured vehicle. The plaintiffs appealed, arguing that because the trial court entered a default judgment against the uninsured driver and owner, under the terms of the insurance policy, plaintiffs are entitled to benefits. The policy language at issue provided that defendant “. . . will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be sustained by an insured and caused by accident arising out of the operation, maintenance or use of an uninsured motor vehicle.” (emphasis in original).
Defendant conceded that under that language, plaintiffs would be entitled to benefits, but cited additional policy language that provided that the insured must be legally entitled to damages. Defendant argued that this legal entitlement must be the final result of an actual trial and an appeal if an appeal had been filed. The Court of Appeals disagreed, finding the default judgment was a final judgment. In so ruling, the court noted that the driver and owner were joined in the action below and the defendant had the opportunity to defend but elected not to do so. In this regard, the court stated:
“Defendant points out that the contract provides that the judgment ‘must be the final result of an actual trial and an appeal, if an appeal is taken.’ Defendant argues that a default judgment, although a legal entitlement to damages, is not ‘the final result of an actual trial.’ We believe this is a tortured reading of the contract. . . . A default judgment is a final judgment, and it appears that the time limits within which to challenge it have long since past. . . . Defendant also points out that the contract explicitly reserves to defendant ‘the right to defend on the issues of the legal liability of and the damages owed by’ the uninsured owner or driver, and further states that defendant is ‘not bound by any judgment against any person or organization obtained without [defendant’s] written consent.’ We agree with defendant that this language does not impose an obligation to defend. However, defendant’s construction, that it may ignore a judgment entered by a court simply because defendant did not consent to the judgment, also appears to be a tortured reading of the contract. . . . Rather, when this language is read in context with the rest of the provisions, it enforces the procedure an insured must follow: namely, joining defendant to the suit. In other words, an insured could not simply file suit against the uninsured motorist only without joining defendant and providing to defendant a copy of the summons and complaint; doing so would deprive defendant of its contractual right to defend, and defendant therefore reasonably would not wish to be bound by such a judgment. Having been properly joined as a party, and having elected not to defend in this case, the language defendant relies on has no application here.”
(emphasis in original)