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Ahmed v Tokio Marine American Ins Co, et al (COA - PUB 4/22/2021; RB #4253)


Michigan Court of Appeals; Docket #352418; For Publication
Judges Tukel, Jansen, and Cameron; Authored
Official Michigan Reporter Citation: Forthcoming; Link to Opinion

§500.3113: Disqualification from PIP Benefit Entitlement [Disqualification for Unlawful Taking and Use of a Vehicle [§3113(a)]]

Not Applicable

In this unanimous published opinion by Judge Tukel, the Court of Appeals reversed the trial court’s denial of Defendant Tokio Marine American Insurance Company's ("Tokio") motion for summary disposition on the issue of whether Plaintiff Mohamed Ahmed was barred by MCL 500.3113(a) from PIP benefits. The Court held that, given the facts of this case, pursuant to the “knew or should have known” language of MCL 500.3113(a),  Ahmed was disqualified from benefits.  Specifically, the Court held that Ahmed's taking of the rental car was unlawful under MCL 750.414 because the rental agreement did not authorize him to drive it. Furthermore, the Court held that because Ahmed knew the car was rented, he should also have known that the terms of the rental agreement  prohibited him from driving it.  

This case arose from an automobile crash in which Ahmed was driving a rental car owned by Meade Lexus of Lakeside. The car had been rented by Ahmed’s wife shortly before the crash. When Ahmed's wife rented the vehicle, the terms of the rental agreement were explained to her, including a provision which provided that only “Authorized Drivers” were permitted to operate it, and that an individual needed to be a validly licensed driver in order to be an “Authorized Driver.” Ahmed did not have a driver’s license at the time of the accident, as it had been revoked four years prior. He testified, however, that he believed his license was merely restricted and that he was driving within the terms of the restriction at the time of the crash. Ahmed was with his wife when she rented the vehicle but was not a party to the agreement and testified to never having read the rental agreement. After defendant Tokio denied Ahmed's claim for PIP benefits, Ahmed filed the underlying first-party action . Defendant Tokio moved for summary disposition, arguing that MCL 500.3113(a) disqualified Ahmed from receiving PIP benefits because he unlawfully took the vehicle by driving it without a driver’s license. In response, Ahmed argued that Tokio “could not demonstrate that plaintiff knew he was an unlicensed driver when the accident occurred or that he was expressly prohibited from taking the vehicle.”

On appeal, the Court of Appeals noted several key components necessary to analyze this claim. First, the Court noted that, as used in 500.3113(a), the words “unlawful” and “taken,” when considered together, plainly “embraces a situation in which an individual gains possession of a vehicle contrary to Michigan law,” and that “a taking does not have to be larcenous to be unlawful, the phrase ‘taken unlawfully’ in MCL 500.3113(a) applies to anyone who takes a vehicle without the authority of the owner, regardless of whether that person intended to steal it.” The Court then noted that “any person who takes a vehicle contrary to a provision of the Michigan Penal Code—including MCL 750.413 and MCL 750.414, informally known as the ‘joyriding’ statutes—has taken the vehicle unlawfully within the meaning of MCL 500.3113(a).” Therefore, the Court determined that “for purposes of MCL 500.3113(a), a vehicle is ‘unlawfully taken’ if it is taken without the authority of its owner . . . [t]hus, MCL 500.3113(a) “examines the legality of a taking from the perspective of the driver.”

The Court next examined MCL 750.414, noting that “it properly requires a showing of knowingly taking without authority or knowingly using without authority,” and that “[f]or a person to take personal property without the authority of the actual owner, there must be some evidence to support the proposition that the person from whom he or she received the property did not have the right to control or command the property.” In applying these principles, the Court noted that there was no question that plaintiff was “willingly using” and "willingly operating” the car, and “no question that plaintiff’s use and operation of the car was without the authority of Meade Lexus, the owner, as the rental agreement prohibited an unlicensed person from driving it.” Thus, the Court determined it was necessary to determine “whether these facts amounted to an unlawful ‘taking.’” In analyzing this issue, the Court considered that plaintiff knew the car was rented by his wife and that there was a written rental agreement. The Court also considered plaintiff’s testimony that he had driven the car on the day of the accident and was driving the car when the accident occurred.

The Court ultimately found these facts “more than sufficient to demonstrate that plaintiff was in possession of the car at the time of the accident . . . and . . . also clearly was ‘operating’ the car at the time of the accident.” The Court clarified that: “[w]hile the requirements under MCL 500.3113(a) that a person ‘take’ and ‘operate’ a vehicle are separate, meaning that each must be established, there is no requirement in the statute that different facts establish each of the elements.  For example, while it is possible to possess or ‘take’ a car without ‘operating’ or driving it, such as by placing it on a flatbed truck and moving it, or by using a tow truck, it is not possible to drive it without also taking it; the act of driving a car can only be accomplished by someone who is in possession of it and operating the controls.” The Court further noted that “Meade Lexus, as owner, placed restrictions in the rental agreement, under which only a  licensed  driver  was authorized  to  use,  operate  or  drive  the  car and that Plaintiff’s acts of driving the car to work and driving it again after work until his involvement in the accident constituted use, operation  and  driving  of  the  car,  and  thus were  outside  the authorization  of  the  owner.    Accordingly, the Court of Appeals held that such acts constituted an unlawful taking” of the car because Ahmed drove it contrary to the owner’s authorization.”

The Court next addressed Tokio’s argument that Ahmed’s taking of the car was unlawful because it was unlawful for Ahmed to drive due to the fact that he did not have a valid driver’s license. In analyzing this claim, the Court noted that 2014 PA 489 made substantive changes to MCL 500.3113(a), eliminating the Safe Harbor provision and imposing a scienter requirement. Following the amendment, “a person who willingly operates or willingly uses a motor vehicle which someone took unlawfully is disqualified from eligibility for benefits if the person ‘knew or should have known’ that the taking of the motor vehicle was unlawful.” In this regard, the Court stated: 

"As we  have  noted, Rambin [ v Allstate Insurance Co, 492 Mich 503;821 N.W.2d 117 (2014)] explored the 'unlawful taking' language at issue in MCL 500.3113(a), in the context of unlawfulness provided by a violation of MCL 750.414, concluding that MCL 750.414 itself had a mens rea requirement . . . .We conclude that the amendment of MCL 500.3113(a) through 2014 PA 489 modified the scienter requirement under that statute if a violation of MCL 750.414is at issue. As interpreted by our Supreme Court in Spectrum Health and Rambin, MCL 500.3113(a) and 750.414 relate to the same subject matter, and thus are in pari materia . . . [and] . . . '[s]tatutes that relate to the same subject or that share a common purpose are in pari materia and must be read together as one law, even if they contain no reference to one another and were enacted on different dates.'  Consequently,  MCL 500.3113(a) and 750.414 must be read together as one law.  

Following Rambin, the Legislature added the 'knew or should have known' language to MCL 500.3113(a).  In construing a statute, we assume that when the Legislature crafts legislation it knows what the existing law is, and takes it into consideration. If we simply treated the current version of MCL 500.3113(a) in exactly the same manner as in Rambin, i.e., that a violation 'requires a showing of knowingly taking without authority or knowingly using without authority,' it would be as if 2014 PA 489 had worked no change in the Safe Harbor provision or the scienter requirement.  Rambin permitted disqualification from eligibility for benefits only if the plaintiff knew that the taking was contrary to the owner’s direction; the 'knew or should have known' standard makes it easier for an insurance company to establish that a plaintiff is disqualified from eligibility  for benefits,  because  actual  knowledge  is  no longer  necessary  so  long  as  a plaintiff should have known that he or she was taking a motor vehicle contrary to the owner’s directives.

In  other  words,  if  we were  to  conclude  that  2014  PA  489  did  not  change  the  mens  rea requirement  which Rambin held  applies  in  the  context of  MCL  750.414, the  Legislature’s enactment of the words 'knew or should have known' would be surplusage and nugatory, contrary to our customary rules of construction.  We are constrained to reject such an interpretation.  We therefore conclude,  applying the plain language  of  2014  PA  489, that  the  Legislature  amended Rambin’s scienter standard  involving  MCL  750.414  in  cases in which disqualification from eligibility for benefits under MCL 500.6113(a) is at issue.  Thus, we hold, when disqualification for PIP  benefits  is  at  issue, a  person  acts  unlawfully under  MCL  750.414  if  the  person takes a motor vehicle  knowing  the  owner  has prohibited the  taking, or if the person takes a motor vehicle or  motorcycle and 'should have known' that the owner prohibited the taking, MCL 500.3113(a)."

Taking these principles into account, the Court noted that this case illustrated the differences between the mens rea requirement upheld in Rambin and the new standard imposed by 2014 PA 489. In analyzing this distinction, the Court noted that Ahmed was unaware of the terms of the rental agreement and thus lacked actual knowledge that an unlicensed driver was not permitted to take the car. Under the previous version of the statute as interpreted in Rambin, this would not have constituted an unlawful taking because Ahmed did not knowingly take the car without the owner’s authority. However, in this case, the Court applied the  “should have known” standard in such a way that barred Ahmed from benefits under MCL 500.3113(a). The Court stated: 

“...plaintiff knew that his wife . . . was not the owner of the car, and that any authority to use the car could only be based on the terms set by the owner.  Thus, before simply driving off, plaintiff was obligated to learn the terms of the rental agreement; he ‘should have known’ the terms because a  person  may  not  simply  take what  he knows to be another’s property without taking any steps to determine if the owner authorized the taking.” 

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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