Michigan Court of Appeals; Docket #356737; Unpublished
Judges Borrello, Jansen, and Murray; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Interpretation of Insurance Contracts
In this unanimous, unpublished, per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order in favor of Plaintiffs Michigan Pizza Hut, Inc. (“Pizza Hut”) and Amerisure Mutual Insurance Company (“Amerisure”), in which the trial court found that Home-Owners was responsible to defend and indemnify Justin Kiry—a Pizza Hut employee who crashed into and injured a motorcyclist while delivering pizzas—under Kiry’s mother’s auto insurance policy with Home-Owners. The Court of Appeals held that a liability exclusion provision in the subject policy—excluding coverage for “any automobile while used as a public or livery conveyance”—did not apply to the facts of this case.
Justin Kiry was delivering pizzas for Pizza Hut in his mother’s 2005 Nissan Altima when he crashed into and injured James Devine, a motorcyclist. Kiry’s mother’s Altima was covered under a policy issued by Home-Owners at the time of the crash, which included the following liability coverage exclusion:
‘1. EXCLUSIONS. Liability Coverage does not apply:
c. to any automobile while used as a public or livery conveyance. This exclusion does not apply to: (1) car pooling on a share the expense basis; nor (2) use of a private passenger automobile for volunteer or charitable purposes or for which reimbursement for normal operating expenses is received.’
Based on this exclusion, Home-Owners refused to defend and indemnify Kiry in Devine’s subsequent auto negligence action against him, his mother, and Pizza Hut. Pizza Hut and its liability insurer, Amerisure, thus filed the instant declaratory action against Home-Owners, arguing that the aforementioned exclusion did not apply both because (1) Kiry was not engaged in ‘a public or livery conveyance’ at the time of the crash, and (2) because Kiry received $1.50 from Pizza Hut per delivery, as reimbursement for “maintenance, gasoline, and other expenses involving the use of his personal vehicle to deliver pizzas”—‘normal operating expenses,’ they contended. Such were the arguments set forth in Pizza Hut and Amerisure’s subsequent motion for summary disposition, which the trial court granted.
The Court of Appeals affirmed the trial court’s summary disposition order, holding that Kiry was not engaged in a ‘public or livery conveyance’ at the time of the crash. The Court defined a ‘public or livery conveyance’ as an indiscriminate holding out of one’s vehicle to the public, for transportation of either goods or people. Kiry was not indiscriminately holding out his vehicle for public use in this case; rather, he was delivering goods only for his employer.
“The use of Mr. Kiry’s vehicle—to deliver pizzas during the course of his employment at Pizza Hut—does not equate to the indiscriminate holding out for public use. Mr. Kiry utilized his vehicle to deliver pizzas for one business to its limited client base, i.e., only on particular occasions and under special terms. There is no evidence or suggestion that he held out his vehicle indiscriminately to the public to transport goods. Under the specific language employed in Home-Owners’ exclusionary clause, an ‘insurer is generally held to avoid liability only when the insured vehicle was in fact used as a public conveyance.’ Burgess v Holder, 362 Mich 53, 55; 106 NW2d 379 (1960) (emphasis in original). Strictly construing Home-Owners’ exclusionary clause in favor of the insured compels the conclusion that Mr. Kiry was not operating his automobile as a ‘public or livery conveyance’ at the time of the accident. Therefore, the trial court did not err in concluding that the policy exclusion does not preclude coverage and that Home-Owners is obligated to provide coverage for the underlying accident. As a result of this conclusion, we need not decide whether the activity falls within the exception to the exclusion.”
The Court clarified, in a footnote, that irrespective of the foregoing analysis, given the fact that Pizza Hut reimbursed Kiry for every delivery he made in the Altima, his use of the Altima would also have fallen under the exception for ‘use of a private passenger automobile . . . for which reimbursement for normal operating expenses is received.’
“Nonetheless we note that it is undisputed that Pizza Hut reimbursed Mr. Kiry $1.50 for his normal operating expenses following each delivery. Plaintiffs aver that the exception to the exclusion in Home-Owners’ policy and the statute from which it derives, MCL 500.2118(2)(f), both contain two limitations: (1) for volunteer or charitable purposes or (2) for which reimbursement of normal operating expenses is received. Because the Legislature used the disjunctive word ‘or’ it meant to treat the volunteer or charitable purposes and the occurrences where reimbursement of normal operating expenses as independent alternatives. ‘ ‘Or’ is . . . a disjunctive [term], used to indicate a disunion, a separation, an alternative.’ Jesperson v Auto Club Ins Ass’n, 499 Mich 29, 35; 878 NW2d 799 (2016) (quoting People v Kowalski, 489 Mich 488, 499 n 11; 803 NW2d 200 (2011). See also Baden v PAR, Inc, 496 Mich 75, 84 n 17; 853 NW2d 303 (2014) (finding that, because the phrases in the statute are separated by the disjunctive ‘or,’ ‘a person need only engage in one of the enumerated actions to satisfy the definition’). Because Mr. Kiry was reimbursed for the normal operating expenses while driving for Pizza Hut, the exception to the exclusion would apply, and plaintiff would have been entitled to summary disposition on this basis as well.”