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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)


Michigan Court of Appeals; Docket #346081; Unpublished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

§500.3114: Priority Rules for Payment of PIP Benefits
Exception for Occupants [§3114(4)]

Not Applicable

In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s grant of summary disposition in favor of Defendant EAN Holdings, LLC (EAN) regarding the disputed issue of whether EAN or Defendant Farm Bureau General Insurance Company ("Farm Bureau") was the insurer of higher priority in relation to  claims for no-fault PIP benefits made by 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 controlling, 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 collision in which 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, 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 her claim for benefits to Farm Bureau. Relevant to this action, Byrd sought and received treatment from Advanced Surgery Center, LLC following the collision, and assigned her rights to benefits to Advanced Surgery Center, LLC. Consequently, Advanced Surgery Center, LLC filed a complaint against  Farm Bureau seeking reimbursement for services it had provided to Byrd. In response,  Farm Bureau filed a third-party complaint against EAN, alleging that EAN, as the owner of the vehicle, was a higher priority insurer. EAN filed a motion for summary disposition, 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 prior 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 the highest prioriry insurer. The Court noted that the Michigan Supreme Court had interpreted MCL 500.3114 and applied it to a set of  facts nearly indistinguishable to those in the case at bar in Turner v Farmers Ins Exch, Mich; 953 NW2d 204 (2021).  In Turner, the occupants of cars rented from Enterprise were injured in motor vehicle collisions, and, as was the case here, the cars 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 that, as a result, Enterprise was higher in priority than Farmers because Enterprise was self-insured and the insurer of the vehicles’ owner and registrant. The Michigan Supreme Court reversed the Michigan Court of Appeals's decision, holding that 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), and that “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,” although such a condition is “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  Supreme Court’s holding in Turner, the Court of Appeals affirmed the holding of the trial court in this case. 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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