Michigan Court of Appeals; Docket # 332764; Unpublished
Judges Talbot, Borrello and Riordan; Unanimous, per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Determination of Domicile [§3114(1)]
Exception for Occupants [§3114(4)]
One-Year Back Rule Limitation [§3145(1)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals held the trial court properly denied Defendant Pioneer State Mutual Insurance Company’s (“Pioneer”) motion for summary disposition regarding Plaintiff Dana Harris’ residence. The Court reasoned that Harris’ failure to update his driver’s license was insufficient evidence to create irrefutable question of fact. The Court reversed the trial court’s denial of summary disposition for Pioneer regarding the application of the innocent-third-party doctrine because Bazzi v Sentinel Ins Co, ___ Mich App ___ (2017) abolished the doctrine.
Harris, a passenger in a vehicle, was injured in an auto accident. He sought coverage from his mother’s no-fault insurer, Pioneer, which denied his claim. Pioneer alleged that Harris was not domiciled with his mother and, thus, not entitled to no-fault benefits through his mother’s policy. To support this argument, Pioneer pointed to the fact that Harris had not updated his address with the Secretary of State’s Office or his employer. Harris’ mother claimed that he lived with her, as did Harris’ ex-girlfriend, whose address remained on his driver’s license. However, Harris’ mother did not indicate that Harris was a resident with her on her application for no-fault insurance with Pioneer. The trial court denied Pioneer’s motion for summary disposition regarding Harris’ residency and applied the innocent-third-party doctrine to Harris because it was his mother who made the error with Pioneer.
The Court of Appeals found the trial court did not err by finding that Harris was a resident of his mother’s household at the time of the accident. According to the Court, the evidence showed that Harris had an intent to remain indefinitely in his mother’s household and that his mother intended for Harris to live with her, “for as long as he needed.” Harris had his belongings in his mother’s apartment and received his mail there. Moreover, Harris’ ex-girlfriend testified that Harris had moved out of her apartment and into his mother’s apartment in December of 2012. Regarding Harris’ failure to update his address with the Secretary of State and his employer, the Court said this did not take away from the “essentially uncontroverted evidence” that showed he was living with his mother and his intent to remain there.
“Even viewing the evidence in the light most favorable to Pioneer, the trial court did not err by finding that Harris was a resident of Wright’s household at the time of the accident. The evidence demonstrates that Harris, Wright’s biological son, had a subjective and declared intent to remain indefinitely in Wright’s household. Wright, too, intended that Harris could live with her for as long as he needed. Harris did not have any other place of lodging at the time and was at least partially dependent on Wright for financial support. Harris had his own bedroom at Wright’s apartment, maintained his belongings there, and received mail there.”
The Court of Appeals continued by holding the trial court erred in finding that Harris was entitled to PIP benefits under the innocent third-party doctrine. The Court explained that following Bazzi the innocent-third-party doctrine was abolished. Although Harris did not commit a wrong, he was still barred from recovery because of his mother’s failure to fully disclose him as a member of her household who could receive benefits. In this regard, the Court stated:
“Given the Bazzi Court’s unequivocal rejection of the rationale relied on by the trial court in this case — i.e., that Harris could recover PIP benefits from Pioneer regardless of whether Pioneer could rescind its policy on the basis of [plaintiff’s mother’s] purported fraud — the portion of the trial court’s order relying on the innocent third-party rule must be reversed.”
Accordingly, because the trial court declined to address whether Harris’ mother’s policy with Pioneer was voidable, the Court of Appeals remanded this issue for further proceedings.
Next, the Court of Appeals found the trial court erred by applying laches to Pioneer’s declaratory action seeking rescission of the policy, noting that while Harris was likely prejudiced due to a delay, “laches should not be applied in the absence of an unreasonable delay.” According to the Court, Pioneer’s delay was not “unreasonable or inexcusable.”
Further, the Court of Appeals held that plaintiff-medical providers did not have a statutory right to proceed with their action for benefits against Pioneer and, as a result, had no claim to statutory interest and fees for overdue benefits. “In Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, our Supreme Court conclusively held that a healthcare provider possesses no statutory right to sue a no-fault insurer,” the Court concluded.
