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Beaumont Health System v State Farm Mutual Automobile Ins Co (COA - UNP; 11/8/2016; RB # 3585) (consolidated with Waechter v Smith)


Michigan Court of Appeals; Docket # 328291 & 329103; Unpublished
Judges Stephens, Saad and Meter; Unanimous, per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 


Compulsory Insurance Requirements for Owners or Registrants of Motor Vehicles Required to Be Registered [§3101(1)] 
Disqualification for Uninsured Owners or Registrants of Involved Motor Vehicles or Motorcycles [§3113(b)]


Not Applicable


In this unanimous unpublished per curiam Opinion involving two consolidated cases, the Court of Appeals held that summary disposition was properly granted for defendant insurers on plaintiffs’ claims for no-fault benefits because  plaintiff operator was an owner of the involved vehicle, and no owner had procured PIP coverage for it.

Donna Waechter was injured in a May 2013 car accident while driving a 2007 BMW. When she bought the BMW in 2012, Waechter’s friend, Diane Spahn, cosigned for its purchase. Spahn’s name was on the title of the BMW when it was registered with the State of Michigan, and was on the title at the time of the accident. Waechter’s ex-husband, Gregg Waechter, had an auto insurance policy with Citizens Insurance that covered the BMW and two other vehicles. Gregg, who did not own the BMW, was the only named insured on the policy, although Waechter was listed as a principal driver. Waechter and Gregg divorced in January 2013. Spahn never purchased insurance for the BMW, but had insurance coverage on her Buick Lacrosse with State Farm. In Docket No. 328291, Beaumont Hospital sued State Farm to recover no-fault benefits for the medical services it provided Waechter after the accident. In Docket No. 329103, Waechter brought an action against Citizens and State Farm for PIP benefits. The insurers filed motions for summary disposition in both cases, claiming that Waechter and Beaumont were ineligible for PIP benefits under MCL 500.3113(b). The motions were granted by the trial courts. Beaumont appealed, arguing that Waechter was entitled to PIP benefits from State Farm pursuant to MCL 500.3114(4), because Spahn’s Buick was insured through State Farm at the time of the accident. Meanwhile, Waechter claimed she was entitled to PIP benefits from Citizens because Citizens insured the BMW at the time of the accident through the policy issued to Gregg.

The Court of Appeals rejected the arguments of both plaintiffs, finding that the trial courts properly granted summary disposition for the insurers.

Regarding Waechter’s claim for PIP benefits, the Court said the claim was barred by §3113(b). As a result, the insurers were not liable for PIP benefits arising from the accident. Specifically, the Court said that, under the No-Fault Act, an owner or registrant of a motor vehicle “shall maintain security for payment of benefits under personal protection insurance, property protection insurance, and residual liability insurance.”

In making its ruling, the Court of Appeals discussed Iqbal v Bristol West Ins Group, 278 Mich App 31 (2008), where the panel held that §3113(b) would not bar a vehicle owner from receiving PIP benefits even though that owner had not procured insurance for the vehicle, provided the vehicle was insured by another owner.  Thus, in Iqbal, plaintiff was entitled to PIP benefits because his brother, who owned the vehicle, procured insurance on it, regardless of whether plaintiff also owned the vehicle at the time of the accident. The Iqbal panel stated:

“While plaintiff did not obtain this coverage, there is no dispute that the BMW had the coverage, and that is the only requirement under MCL 500.3113(b), making it irrelevant whether it was plaintiff’s brother who procured the vehicle’s coverage or plaintiff.”

However, in Barnes v Farmers Ins Exch, 308 Mich App 1 (2014), the Court of Appeals declined to extend the Iqbal holding to allow a vehicle owner to recover PIP benefits where the only insurance on the vehicle had been secured by a non-owner. In Barnes, plaintiff was in an accident while operating a vehicle she co-owned with her mother. At the time of the accident, the vehicle was only covered by a policy obtained by a non-owner. As a result, the panel ruled that under §3113(b), plaintiff was ineligible for PIP benefits. The Court distinguished Iqbal and said:

“[W]hile Iqbal held that each and every owner need not obtain insurance, it did not allow for owners to avoid the consequences of MCL 500.3113(b) if no owner obtained the required insurance. Thus, under the plain language of MCL 500.3113(b), when none of the owners maintains the requisite coverage, no owner may recover PIP benefits.”

Relying on Barnes, the Court of Appeals concluded the trial courts in this case properly granted summary disposition for the insurers, finding that §3113(b) precluded Waechter from recovering PIP benefits. In so ruling, the Court commented on Waechter’s argument that, under Iqbal, she was entitled to PIP benefits because Citizens insured the BMW at the time of the accident through a policy issued to Gregg, her ex-husband. Waechter asserted the decision in Barnes directly conflicted with Iqbal and could not undermine Iqbal’s precedential effect.

The Court of Appeals disagreed, pointing out that, in Iqbal, one owner of the vehicle maintained the required security on the vehicle, but that in Barnes, neither vehicle owner maintained the required security. The Court further noted that Barnes specifically addressed Iqbal and reached a conclusion about how Iqbal should be distinguished.

Accordingly, the legal conclusion of the Barnes Court was binding precedent, the Court of Appeals said. The Court concluded that both Barnes and Iqbal:

“evince this Court’s consistent position that when an owner insures a car, then any other owner is entitled to PIP benefits under the security obtained for the car, but when no owner insures the car, then any owner is not entitled to PIP benefits.”

Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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