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Turner by Sakowski, et al v Farmers Ins Exch, et al (SC – PUB 1/29/2021; RB #4245)


Supreme Court of Michigan; Docket #159660, 159661Published 
Judges McCormackZahraViviano, Bernstein, Clement, and CavanaghPer Curiam 
Official Michigan Reporter Citation:Forthcoming; Link to Opinion
Link to COA OpinionLink to COA Dissent

Obligation of Non-Resident Owner/Registrant to Insure a Vehicle [§3102(1)]
Exception for Occupants [§3114(4)]

Not Applicable

In this 4-2 decision (Clement concurring; Cavanagh and Viviano dissenting) featuring twopriority disputes between Defendants Enterprise Leasing Corporation of Detroit, LLC (“Enterprise”)and Farmers Insurance Exchange (“Farmers”), the Michigan Supreme Court ruled that Enterprise was not the insurer of highest priority under the no-fault act’s then-applicable priority rules (which were subsequently changed pursuant to the 2019 amendments).  Relying on its decision in Parks v Detroit Auto Inter-Ins Exch, 426 Mich 191 (1986), the Court read the phrase “owner or registrant of the vehicle occupied” in the former MCL 500.3114(4) to really mean “owner or registrant of a motor vehicle required to be registered in this state.” Therefore, even though Enterprise was an authorized self-insured entity under the no-fault act and the owner and registrant of the two vehicles in questionit was not a priority insurer under the former MCL 500.3114(4)(a) because the two vehicles were neither registered in Michigan norrequired to be registered in Michigan.

In docket number 339624,Maegen Turner was injured in a car crash while riding as passenger in a car that an acquaintance had rented from Enterprise.  Enterprise is a self-insured entity pursuant to MCL 500.3101d(1), but the car itself was registered in Maryland.  In docket number 339815, Jonte Everson was involved in a car crash while driving a car that he had rented from Enterprise, but which was registered in Pennsylvania.  Turner and Everson both turned to Enterprise for payment of their no-fault PIP benefits, but Enterprise refused to pay, arguing that because the rented vehicles, themselves, were not subject to the security requirements under MCL 500.3101 (because the cars were not registered in Michigan and had not been operated in Michigan for more than 30 days in that calendar year), Enterprise was not a priority insurer under the then-applicable priority rules of the no-fault act.  In so arguing, Enterprise relied on the Supreme Court’s decision in Parks v Detroit Auto Inter-Ins Exch, 426 Mich 191 (1986), in which the Court read the phrase “owner or registrant of the vehicle occupied” in MCL 500.3114(4)(a) to really mean “owner or registrant of a motor vehicle required to be registered in this state.”

Turner and Everson then turned to the Michigan Automobile Insurance Placement Facility for PIP benefits, and the MAIPF assigned their claims to Farmers.  A priority dispute ensued between Enterprise and Farmers, in which Farmers rebutted Enterprise’s aforementioned argument, claiming that, “[U]nder MCL 500.3114(4)(a), it was irrelevant whether Enterprise was required to register the vehicle in Michigan or maintain security on that particular vehicle because §3114(4)(a) was only concerned with the insurer ‘of the owner or registrant’ and not with whether the particulavehicle involved in the accident was itself actually insured by the security required under the Michigan no-fault act.”  The two circuit courts presiding over the respective disputes ruled in favor Enterprise initially; the Court of Appeals then reversed the circuit courts’ decisions, finding that Enterprise was the highest priority insurer; but ultimately, after granting Enterprise’s leave to appeal, the Supreme Court reversed the decision of the Court of Appeals and reinstated the circuit courts’ original decisions.

The Supreme Court held that its holding in Parks was controlling in this case, and that, although the former MCL 500.3114(4)(a) did “not expressly condition an insurer’s priority for no-fault benefits upon the vehicle’s being required to be registered in Michigan or otherwise being subject to the security provisions of the no-fault act . . . such a condition is implicit within . . . former MCL 500.3114(4)(a) when the no-fault act is read as a whole.”  Thus, since the two vehicles in question were not required to be registered Michigan and therefore not subject to the security provisions of the no-fault act, the majority held that the former MCL 500.3114(4)(a) did not apply to Enterprise, the vehicles’ owner and registrant.

"Under MCL 500.3101(1) and MCL 500.3102(1), an owner or registrant of a vehicle must maintain security for the payment of no-fault benefits (i.e., obtain a no-fault insurer) when the vehicle is either required to be registered in this state or operated in this state for more than 30 days within the calendar year. In our judgment, consistent with Parks, the word 'insurer' as used in MCL 500.3114(3) and former MCL 500.3114(4)(a) refers to the no-fault insurer contemplated by MCL 500.3101(1) and MCL 500.3102(1). That is, the word 'insurer' as used in MCL 500.3114(3) and former MCL 500.3114(4)(a) refers only to a particular insurer that has agreed to provide no-fault insurance to an owner or registrant as required by MCL 500.3101(1) or MCL 500.3102(1). Therefore, where no such insurer exists, there can be no “insurer of the furnished vehicle,” see MCL 500.3114(3), or 'insurer of the owner or registrant of the vehicle occupied,' see former MCL 500.3114(4)(a). 

 As applied to this case, because these self-insured Enterprise appellants, see MCL 500.3101d, were not required under either MCL 500.3101(1) or MCL 500.3102(1) to obtain no-fault insurance for the vehicles at issue, the Enterprise appellants could not have constituted the 'insurer of the owner or registrant of the vehicle occupied' under former MCL 500.3114(4)(a). Accordingly, the trial court in each case correctly granted summary disposition in favor of the Enterprise appellants."

Judge Clement, concurring, wrote separately to note that she believed this case was controlled not by Parks but by the Supreme Court’s decision in Dye v Esurance Prop & Cas Ins Co, 504 Mich 167 (2019):

"In my view, the fundamental inquiry in this case is determining the nature of the commitment a no-fault insurer makes when it issues a policy of no-fault insurance (or, as here, when an entity commits to self-insuring). The obligation to obtain no-fault insurance is triggered upon becoming 'the owner or registrant of a motor vehicle required to be registered in this state' that is going to be 'driven or moved on a highway.' MCL 500.3101(1). Is the no-fault insurer's commitment to the insured owner, or is it to the owner's vehicle? My view is that 'nothing in the no-fault act requires a vehicle to be insured,' but rather that 'a certain person (the vehicle's owner or registrant) [must] maintain security against liability ....' Dye, 504 Mich. at 197, 934 N.W.2d 674 (Clement, J., dissenting). But my view did not prevail; the Court held that MCL 500.3101(1) “refers to the vehicle, not the person.” Id. at 192, 934 N.W.2d 674 (opinion of the Court). As a result, a no-fault insurer makes a commitment to cover a particular vehicle, rather than making a commitment to cover a particular vehicle owner and that owner's collection of automobiles."

Judges Cavanagh and Viviano, dissenting, argued that the majority should not have drawn the aforementioned link between the former MCL 500.3101(1) and the former MCL 500.3114(4)(a), andinstead should have relied on the plain language of the former MCL 500.3114(4)(a), which they argued makes clear that “registration and security are not conditions precedent to priority.”

"The majority acknowledges that the link between former MCL 500.3114(4)(a) and MCL 500.3101(1) is not found in the actual language of the statutes. Rather, the majority contends that the link is 'implicit' in former MCL 500.3114(4)(a) when the act is construed as a whole. The majority construes MCL 500.3101(1) and MCL 500.3102(1) as requiring an owner or registrant to 'obtain a no-fault insurer' and then links that implicitly required insurer to the insurer referred to as first in priority in former MCL 500.3114(4)(a). I disagree with this approach. Had the Legislature meant to link priority under former MCL 500.3114(4)(a) to the registration and security requirements of the act, it presumably would have employed language to that effect—i.e., '[t]he insurer of the owner or registrant of the vehicle occupied [with respect to which the security required by MCL 500.3101 was in effect]' or '[t]he insurer of the owner or registrant of the vehicle occupied [if that vehicle was required to be insured under MCL 500.3101].'" [citations omitted]

Lansing car accident lawyer 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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