Michigan Court of Appeals; Docket #337616; Unpublished
Judges Sawyer, Stephens, and Gadola per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Exception for Commercial Vehicles [§3114(2)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals reversed the trial court’s grant of summary disposition for co-defendants Mecosta County Commission on Aging (“MCCOA”) and Michigan Municipal Risk Management Authority (“MMRMA”) regarding the exception to PIP benefits for commercial vehicles. The Court of Appeals reversed the trial court’s grant of summary disposition because although it found MCL 500.3114(2) was generally applicable to this case, neither exception under MCL 500.3114(2)(c),(d) applied since the vehicle at issue was a van and not a bus.
On November 1, 2016, co-defendant Elizabeth Kehn, was severely injured as a result of a motor vehicle accident, which occurred while she was a passenger in a medical transportation vehicle owned and operated by co-defendant MCCOA and insured by co-defendant MMRMA. Ms. Kehn submitted a claim for personal protection insurance benefits to her personal insurer, Plaintiff Michigan General Insurance Corporation (“Michigan General”). Michigan General initially paid Ms. Kehn’s medical benefits.
On May 9, 2017, Michigan General sought reimbursement from MMRMA, arguing that it was an insurer of higher priority according to MCL 500.3114(2). MCL 500.3114(2) shifts the burden for no-fault priority to the insurer of the motor vehicle when an individual suffers an accidental bodily injury while a “passenger or operator of a motor vehicle operated in the business of transporting passengers.” MMRMA argued that it was not the insurer of highest priority because it was not in the for-profit transportation business and it fit into one of the two exemptions outlined in MCL 500.3114(2)(c),(d). MCL 500.3114(2)(c) exempts the insurer of the motor vehicle if the motor vehicle is: “A bus operating under a government sponsored transportation program.” MCL 500.3114(2)(d) exempts the insurer of the motor vehicle if the motor vehicle is: “[a] bus operated by or providing service to a nonprofit organization.” The trial court found the motor vehicle to be a “bus” and granted summary disposition for MMRMA under MCL 500.3114(2)(c).
MMRMA first contended that MCL 500.3114(2) applied only in the context of for-profit commercial enterprises. It argued that because MCCOA is a non-profit transportation service, MCL 500.3114(2) is generally inapplicable to this case. The Court of Appeals disagreed with this argument and found that MCL 500.3114(2) generally applies to both for-profit and non-profit enterprises. The Court first rejected MMRMA’s use State Farm Mut. Auto Ins. Co. v Sentry Ins, 91 Mich. App 109, 114-115, (1979) to demonstrate a distinction between for-profit and non-profit enterprises because the issue in that case did not involve the application of MCL 500.3114(2). The Court also rejected MMRMA’s use of Farmers Ins. Exch. v AAA of Mich, 256 Mich App 691, 701 n 5 (2003) to show the distinction between for-profit and non-profit distinction under MCL 500.3114(2) because the case did not find the for-profit status to be dispositive. Rather, the Court found that Farmers introduced the “primary purpose/incidental nature test” in order to assess whether a vehicle is “operated in the business of transporting passengers.” Thus, the Court found that for-profit status of the enterprise was not relevant to the inquiry and instead the relevant inquiry should be the primary purpose/incidental nature test.
“Sentry did not involve the application of subsection 3114(2) – rather, the central issue was defining the scope of vehicle ownership under the no-fault act. Id. at 112. Sentry’s reference to subsection 3114(2) was made as the Court examined the Legislature’s overall intent in enacting the no-fault act. Id. . . . But in neither Farmers nor Lampman was the commercial or profit-driven nature of the insured entity ultimately dispositive of whether MCL 500.3114(2) applied. Rather, Farmers introduced the “primary purpose/incidental nature” test in order to assess whether a vehicle is “operated in the business of transporting passengers.”
MMRMA then argued that MCL 500.3114(2) did not apply because (1) transportation was incidental since it made up a small portion of Mecosta County’s business at-large and (2) transportation was only an incidental portion of MCCOA’s business specifically. The Court rejected the first argument because it found the focus should be on MCCOA specifically since MCCOA was listed as the owner of the vehicle, not Mecosta County. The Court then rejected the second argument for three reasons. First, MCCOA’s website stated that its goal was to help seniors remain in their homes and did so by offering transportation services. Second, MCCOA had purchased three vehicles in 2012, which was a significant investment. Third, MCCOA contracted with a third-party to help provide transportation services to seniors. Taken together, the Court found that transportation services accounted for a primary and not incident component of MCCOA’s business Thus, the Court rejected the MMRMA’s argument that MCL 500.3114(2) did not apply generally.
MMRMA also argued that it was not liable for Plaintiff’s no-fault benefits because the vehicle she was riding in constituted a government sponsored vehicle for purposes of MCL 500.3114(c). First, the Court explained that the exemption set forth by MCL 500.3114(2)(c) applies to buses “operating under a government sponsored transportation program.” Michigan General argued that the legislative history of MCL 500.3114(2) (c) limited the scope to only mass transit systems. However, the Court found that this language was unambiguous, and it did not need to resort to legislative history to analyze its meaning. Thus, the plain language of the statute made it clear that it applied to all buses operating under a government sponsored transportation program, and it was not limited to mass transit systems. Michigan General then argued that MCL 500.3114(c) was inapplicable because of the Court’s prior case of USAA Ins. Co. v. Houston Ins. Co., 220 Mich. App 386, 392, (1996). However, the Court distinguished Houston because the third-party transportation company in that case agreed to indemnify and hold the governmental unit harmless in the case of liability. In this case the government was entirely responsible for the transportation. The drivers were employed by Mecosta County, MCCOA purchased and owned the medical transportation vehicles, and paid for the fuel and maintenance. In regard to its contract with the third-party, MCCOA agreed to indemnify and hold the third-party not liable. Thus, the Court held that “MCCOA’s transportation program is operated “under a government sponsored transportation program,” in accordance with MCL 500.3114(2)(c).”
Finally, the Court examined whether the vehicle at issue was a “bus” for purposes of the statute. The Court first looked to the dictionary for the ordinary definition of a bus because the statute did not define the term. Merriam-Webster defines a bus as “a large motor vehicle designed to carry passengers, usu. along a fixed route according to a schedule.” While Michigan General urged the Court to adopt the Michigan Motor Vehicles definition of a bus, the Court rejected the invitation. The Court refused to do so because (1) the Motor Vehicle definition included a technical aspect that the Court found unnecessary and (2) the ordinary definition of a bus was clear and unambiguous. The Court also rejected Michigan General’s contention that a bus must travel a fixed schedule or route because the dictionary definitions that include this description are qualified by the word “usually.”
Under the above description and the facts available, the Court held that the vehicle at issue was a van and not a bus. First, the Court found the vehicle to match the general description of a van found in the dictionary. Second, the Court found that MCCOA defined the vehicles as “vans” on its website. Third, the vehicle title and application for registration both identify “van” as the body style. Fourth, the vehicle was not “long” as the description of a bus requires. Fifth, the vehicle did not have the typical features of a bus. Thus, the Court found that the vehicle was a bus and not a van.
“Under these facts, we conclude that the vehicle at issue is a “van” and not a “bus” in the plain and ordinary sense of those terms. The dictionary defines “van” as “a multipurpose enclosed motor vehicle having a boxlike shape, rear or side doors, and side panels often with windows.” Merriam-Webster’s Collegiate Dictionary (11th Ed). Given the variety of customizations offered for E-Series vehicles, they are certainly multipurpose, while the vehicle at issue here has a boxlike shape, rear and side doors, and side panels with windows. Further, MCCOA’s website refers to its fleet of medical transportation vehicles as “vans.” The vehicle title and application for registration both identify “van” as the body style. The 2013 Ford Econoline Wagon Brochure refers to the body style selected for the vehicle at issue here as a “van” or ‘wagon.’”
Because the vehicle at issue was a van and not a bus, the Court found that neither exception under MCL 500.3114(2)(c),(d) applied. Thus, the Court reversed the grant of summary disposition by the trial court and remanded the case.
