Michigan Court of Appeals; Docket # 345332; Published
Judges Markey, Borrello, and Boonstra; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
General/Miscellaneous (§500.3113)
TOPICAL INDEXING:
Interpretation of Insurance Contracts
SUMMARY:
In this unanimous published per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing the plaintiff’s first-party action to recover no-fault PIP benefits on the basis of an assignment. The plaintiff’s patient, Victor Caballero, was injured in a motor vehicle collision while driving his wife’s vehicle, the insurance policy for which listed Caballero as an excluded driver in the Named Driver Exclusion Endorsement. The endorsement only listed liability benefits, uninsured motorist benefits, and physical damage benefits as the benefits that would not be recoverable if the vehicle was driven by an excluded operator, and thus, the plaintiff, Bronson Health Care Group, argued that the defendant, State Auto Property and Casualty Insurance Company, was still liable for PIP benefits because it failed to explicitly exclude them in the endorsement. The Court of Appeals rejected Bronson’s argument, holding that because Caballero was properly named as an excluded operator under MCL 500.3009(2), it did not matter that PIP benefits were not explicitly identified in the endorsement—Caballero was barred from recovering them by statute.
The vehicle Victor Caballero was driving at the time of the subject motor vehicle collision was insured under a policy issued by State Auto to his wife. After the collision, Victor sought treatment from, and assigned his rights to no-fault PIP benefits to, Bronson Health Care Group. Bronson subsequently filed the instant action against State Auto to recover unpaid PIP benefits, and State Auto moved for summary disposition, arguing that Victor was identified as an excluded operator in the policy and was therefore disqualified from recovering benefits under the policy. In response, Bronson argued that the Named Driver Exclusion Endorsement did not specify that PIP benefits were among the benefits that would not apply if Victor operated the vehicle; rather, it only listed liability benefits, uninsured motorist benefits, and physical damage benefits as those that an identified individual would be excluded from. The trial court ultimately granted State Auto’s motion, finding that “the language of the Policy as a whole reflected an intent to excluded PIP benefits when Victor, an excluded driver, was driving a covered vehicle.”
The Court of Appeals affirmed the trial court’s order in favor of State Auto, although for somewhat different reasons. Bronson argued on appeal that the plain and unambiguous language of the endorsement made it clear that excluded drivers were not excluded from PIP benefits. The Court of Appeals rejected Bronson’s framing of the issue, first ruling that the issue before it was not one of contract interpretation, but rather of statutory interpretation—Caballero’s entitlement to PIP benefits was purely statutory, flowing from MCL 500.3114(1). MCL 500.3113(d), however, “provides in relevant part that a ‘person is not entitled to be paid [PIP] benefits . . . if at the time of the accident . . . the person was operating a motor vehicle or motorcycle as to which he or she was named as an excluded operator as allowed under section 3009(2).” Thus, the Court noted, the no-fault act “provides a mechanism by which a person may be statutorily excluded from entitlement to PIP benefits notwithstanding that he or she may otherwise have been entitled to them.” The real inquiry, then, was whether Caballero was properly named as an excluded operator under MCL 500.3009(2), and the Court determined that he was. As a result, he was statutorily barred from receiving PIP benefits by MCL 500.3113(d).
Indeed, and directly contrary to plaintiff’s position that a contractual exclusion of PIP benefits was required (in order for State Auto to avoid liability for PIP benefits), a contractual exclusion of PIP benefits would instead have been improper, as it would have been in derogation of the mandates of the no-fault act. Simply put, PIP benefits are statutory and thus not subject to a contractual exclusion. As relates to PIP benefits, therefore, the import of the Endorsement was not in the listing of inapplicable coverages (relating to the operation of a vehicle by an excluded operator), but rather in the identification of Victor as an excluded operator. Accordingly, the exclusionary effect of MCL500.3009(2) was not dependent on the inclusion within the Endorsement of language specifically excluding PIP benefits, and the fact that the Endorsement did not include language specifically excluding PIP benefits is immaterial, because as a matter of statutory law, see MCL 500.3113(d); MCL 500.3009(2), Victor was not entitled to PIP benefits.
