Michigan Court of Appeals; Docket #349958; Unpublished
Judges Kelly, Shapiro, and Swartzle; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s judgment entered in favor of Defendant/Cross-Plaintiff Nationwide Mutual Fire Insurance Company (“Nationwide”) after a jury trial, and remanded for entry of judgment of no cause of action in favor of Defendant/Cross-Defendant Home-Owners Insurance Company (“Home-Owners”). A priority dispute arose as to who owned the motor vehicle involved in the subject crash, and therefore whether Nationwide—to whom the Michigan Assigned Claims Plan assigned Plaintiff St. John Hospital and Medical Center’s (“St. John”) claim for no-fault PIP benefits—or Home-Owners—the insurer of the vehicle’s previous owner who, Nationwide argued, failed to properly transfer title to its new, uninsured owner who was driving it at the time of the subject crash—was the highest priority insurer for purposes of MCL 500.3114. The Court of Appeals held that Home-Owners’ insured properly transferred title before the subject crash by complying with the requirements of MCL 257.233(9), and that Home-Owners, therefore, fell outside of the no-fault act’s priority rules.
Silvia Guzman purchased a Jeep Cherokee and no-fault coverage from Home-Owners in January of 2015, but sold the vehicle later that year to Eduardo Martinez. Guzman and Martinez disputed whether Martinez signed the assignment of title on the day the purchase was consummated, but Martinez did not apply for title to the vehicle with the Secretary of State, did not register it in his name, and did not acquire no-fault insurance for the vehicle. Over one year later, Claudia Avila was driving the Jeep and Martinez was traveling as a passenger when the vehicle was involved in a crash and both were injured. Avila was treated at St. John and subsequently assigned her right to no-fault PIP benefits to St. John, who sought reimbursement for the treatment it provided through the MACP, as neither Avila nor Martinez were insured. The MACP assigned St. John’s claim to Nationwide, who field a cross-complaint against Home-Owners’ in St. John’s subsequent first-party action against it, arguing that Guzman never properly assigned title of the vehicle to Martinez and that, as a result, Guzman was still the owner at the time of the crash, and therefore Home-Owners the insurer of highest priority. Home-Owners moved for summary disposition, arguing that Guzman complied with the requirements for transferring title under MCL 257.233(9), which requires that Martinez sign the assignment of title. Nationwide, in response, argued that Guzman had to comply with both MCL 257.233(9) and MCL 257.240(2), the latter of which, it argued, required Guzman to accompany Martinez to the Secretary of State after the sale or retain proof of sale for at least 18 months. The trial court agreed with Nationwide and ultimately tasked the jury with determining whether Guzman complied with both MCL 257.233(9) and MCL 257.240(2). The jury determined that Guzman did comply with the former, but not the latter, and thus judgment was entered in favor of Nationwide.
The Court of Appeals reversed the trial court’s judgment entered in favor of Nationwide and remanded for entry of no cause of action in favor of Home-Owners, holding that MCL 257.233(9) was solely determinative of the date of transfer. MCL 257.233(9) provides:
"Upon the delivery of a motor vehicle and the transfer, sale, or assignment of the title or interest in a motor vehicle by a person, including a dealer, the effective date of the transfer of title or interest in the vehicle is the date of signature on either the application for title or the assignment of the certificate of title by the purchaser, transferee, or assignee."
Since the jury held that “(1) Guzman sold the jeep to 'a purchaser,' i.e., Martinez, (2) Guzman signed the assignment of title to Martinez, and (3) Martinez ‘signed the assignment of title all before’ the date of the collision,” Guzman was not an owner under MCL 500.3101(2)(k)(iii) at the time of the crash, and therefore Home-Owners not an insurer in the line of priority pursuant to MCL 500.3114(4).
"In answering Question No. 1, the jury determined that (1) Guzman sold the jeep to ‘a purchaser’ i.e., Martinez, (2) Guzman signed the assignment of title to Martinez, and (3) Martinez ‘signed the assignment of title all before’ the date of the collision. Under MCL 257.233(9) and Perry, 477 Mich at 63-64, title to the Jeep Cherokee transferred from Guzman to Martinez before the collision, and Guzman did not hold legal title to the vehicle and was, therefore, not an ‘owner’ under MCL 500.3101(2)(k)(iii). Consequently, Home-Owners was not the insurer of an owner of the subject vehicle, and under former MCL 500.3114(4), it was not a higher priority insurer for Avila’s injuries. The trial court should have entered a judgment of no cause of action in favor of Home-Owners because of the jury’s answer to Question No. 1."
The Court of Appeals rejected Nationwide’s contention that Guzman also had to comply with MCL 257.240, because that statute is only intended “to apply in situations where a court was considering whether a vehicle’s owner has tort liability.” There is nothing in the statutory framework to suggest that proper transfer of title under MCL 257.233(9) can be undone by non-compliance with MCL 257.240.
"Considering the plain language of the statute, however, it is clear that the Legislature intended MCL 257.240 to apply in situations where a court was considering whether a vehicle’s owner has tort liability. This can be seen by the reference in MCL 257.240(1) to liability ‘for any damages or a violation of law,’ and not, as the case may be, liability of the owner’s no-fault insurer to pay benefits as the insurer of an owner. Indeed, MCL 257.233(9) and Perry, 477 Mich at 63- 64, are clear that title transfers on the date the purchaser signs the relevant documents. Further, our Supreme Court has explained that MCL 257.240 ‘affords the seller an affirmative defense to a damage claim arising out of negligence after the sale,’ but ‘it is not dispositive of the right to indemnification between an insurer and the insured.’ Clevenger, 443 Mich at 657 n 8. Thus, Nationwide’s attempted reliance on MCL 257.240 to suggest that a proper transfer of title under MCL 257.233(9) could be undone by Guzman’s failure to accompany Martinez to the Secretary of State branch office or retain proof of purchase for 18 months is not persuasive.
Moreover, there is nothing in the statute to suggest that the presumption of ownership created by MCL 257.240(4) is an absolute, irrefutable presumption. To read the provision as Nationwide suggests would mean that the presumption of ownership would be created when a seller fails to comply with MCL 257.240(2), while at the same time, the only way to rebut this presumption of ownership would be to show that the seller complied with MCL 257.240(2). We should avoid, if possible, reading a statute as creating a logical impossibility."