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Advanced Surgery Center, LLC v Farm Bureau General Insurance Company of Michigan, et al (COA – UNP 4/22/2021; RB #4251)

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Michigan Court of Appeals; Docket # 346081; Unpublished
Judges Fort Hood, Servitto, and Boonstra; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


STATUTORY INDEXING:
§500.3114: PRIORITY RULES FOR PAYMENT OF PIP BENEFITS
Exception for Occupants [§3114(4)]

TOPICAL INDEXING:
Not Applicable


SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s grant of summary disposition to co-defendant EAN Holdings, LLC, on the disputed issue of whether defendant EAN or defendant Farm Bureau General Insurance Company was the insurer of higher priority in relation to the claims for no-fault PIP benefits made by the injured person, Varanda Byrd, who was treated by and assigned some of her benefits to plaintiff Advanced Surgery Center, LLC. In so holding, the Court of Appeals noted that the Michigan Supreme Court’s analysis of the same issue in Turner v Farmers Ins Exch, __ Mich __; 953 NW2d 204 (2021); Turner by Sakowski v Farmers Ins Exch, 327 Mich App 481; 934 NW2d 81 (2019) was dispositive, and thus, “[b]ecause EAN was not required to obtain no-fault insurance for the vehicle, it could not have constituted the ‘insurer of the owner or registrant of the vehicle occupied’ under former MCL 500.3114(4)(a).”

This case arose from a motor vehicle accident in which Varanda Byrd was injured. At the time of the accident, Byrd was driving a vehicle she had rented from Enterprise. The vehicle was owned by EAN Holdings, LLC, a self-insured entity registered in Florida. As Byrd did not have a no-fault insurance policy of her own, the Michigan Assigned Claims Plan assigned claimant’s claim for benefits to defendant Farm Bureau. Relative to this action, Byrd sought and received treatment from plaintiff Advanced Surgery Center, LLC following the accident, and assigned her rights to benefits to plaintiff. Consequently, plaintiff Advanced Surgery filed a complaint against defendant Farm Bureau seeking reimbursement for personal protection insurance (PIP) services it had provided to Byrd. In response, defendant Farm Bureau filed a third-party complaint against EAN, alleging that EAN, as the owner of the vehicle, was highest in priority to pay plaintiff’s PIP benefits. EAN filed a motion for summary disposition in response, arguing that it was not required to provide PIP benefits to plaintiff because the vehicle was not registered in Michigan and had not been used in Michigan for more than thirty days in the past calendar year. The trial court agreed.

On appeal, the Court of Appeals rejected defendant Farm Bureau’s argument that the trial court erred in granting EAN’s motion for summary disposition because EAN was the owner of the vehicle and therefore stood highest in property for PIP benefits. Applying MCL 500.3114, the Court noted that the Michigan Supreme Court had interpreted MCL 500.3114 and its application to facts nearly indistinguishable to the case at bar in Turner by Sakowski v Farmers Ins Exch, 327 Mich App 481; 934 NW2d 81 (2019); Turner v Farmers Ins Exch, __ Mich __; 953 NW2d 204 (2021) in which occupants of cars rented from Enterprise were injured in automobile accidents. As is the case here, the cars in Turner were “registered in states other than Michigan and owned by EAN, which self-insured the vehicles, and the injured parties’ claims for benefits were assigned to an insurer (Farmers Insurance Exchange) through the Assigned Claims Plan.”

In Turner, The Michigan Court of Appeals concluded that “[§] 3114(4)(a) plainly refers to the insurer of the vehicle’s ‘owner or registrant,’ regardless of whether the particular vehicle involved in the accident was actually covered by the security described in § 3101(1)”, and, therefore,   Enterprise was higher in priority than Farmers because Enterprise was self-insured and, thus, was the insurer of the vehicles’ owner and registrant. However, the Michigan Supreme Court reversed the Michigan Court of Appeal’s decision holding that in Parks v Detroit Auto Inter-Ins Exch, 426 Mich 191; 393 NW2d 833 (1986), MCL 500.3114, applied “with equal force” to former MCL 500.3114(4)(a), stating “MCL 500.3114(3), as with former MCL 500.3114(4)(a), does 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 because it has been operated within the state for more than 30 days within the calendar year.” However, the Court in Turner noted that such a condition was “implicit” within MCL 500.3114(3) (and former MCL 500.3114(4)(a)) when the no-fault act is read as a whole.

Ultimately, based on the Michigan Supreme Court’s order in Turner, the Court of Appeals in this case affirmed the holding of the trial court. In doing so, the Court noted that EAN had provided evidence that the vehicle in question was not operated in Michigan for more than thirty days before the accident and that Farm Bureau had never expressly disputed this. Accordingly, the Court found no genuine issue of material fact that the vehicle had not been operated in Michigan for more than thirty days in the relevant calendar year, which was “dispositive of the issue in this case under Turner.” The Court consequently held that “[a]s in Turner and Parks, the vehicle at issue in this case was not required to be insured because it “(1) [an] out-of-state vehicle[], (2) not required to be registered in this state, and (3) not subject to the security provisions of the no-fault act because [it] had not been operated in this state for more than 30 days within the calendar year.”

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