Michigan Court of Appeals; Docket #360079; Unpublished
Judges Rick, Shapiro, and O’Brien; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
In this 2-1, unpublished, per curiam decision (O’Brien, dissenting), the Court of Appeals reversed the trial court’s summary disposition order in favor of Plaintiff Allstate Insurance Company (“Allstate”), in Allstate’s subrogation action against Defendant Dominique Jamia Johnson. The Court of Appeals held, first, that a question of fact existed as to whether Johnson’s uninsured vehicle had been unlawfully taken—that is, without her permission—by her boyfriend’s father, Melvin Jackson, prior to the subject motor vehicle accident. The Court of Appeals held, second, that since a question of fact existed as to whether Melvin Jackson was barred from PIP benefits by MCL 500.3113(a), a question of fact also existed as to whether Allstate was an “insurer obligated to pay personal protection insurance benefits [to Jackson]” for purposes of MCL 500.3177(1). The Court held, third, that the trial court erred in denying Johnson’s motion to amend her answer to assert that her vehicle was not required to be insured pursuant to MCL 500.3101(1).
Dominique Jamia Johnson owned a Chevrolet Malibu, the insurance on which expired shortly after March 2014. After the insurance expired, Johnson instructed her boyfriend, Eric Jackson, not to drive the vehicle, but Eric—unbeknownst to Dominique—gave his father, Melvin Jackson, permission to drive the vehicle after dinner one night. Melvin Jackson took the vehicle and proceeded to get in a car accident, after which he applied for PIP benefits through the Michigan Automobile Insurance Placement Facility, who in turn assigned his claim to Allstate. Allstate paid $1,463,962.93 in PIP benefits to Jackson for the injuries he sustained in the accident, and then filed a subrogation action against Johnson. Johnson answered Allstate’s complaint, stating only that pursuant to MCL 500.3113(a), Allstate was not entitled to subrogation against her. Allstate proceeded to move for summary disposition, arguing that there was no question of fact under MCL 500.3177(1) that it—the “insurer obligated to pay personal protection insurance benefits” for Jackson’s injuries—could pursue a subrogation claim against Johnson, the owner of “a motor vehicle with respect to which security as required by sections 3101(1) and 3102 was not in effect at the time of the accident. In response to Allstate’s motion, Johnson asserted that Melvin had taken her vehicle “unlawfully” for purposes of MCL 500.3113(a), that Melvin was therefore barred from PIP benefits, and that Allstate, as a result, could not be said to be the “insurer obligated to pay personal protection insurance benefits” for purposes of MCL 500.3177(1). Johnson also moved to amend her answer to more specifically explain her defense regarding Melvin’s unlawful taking, as well as to argue that her car was not actually required to be insured under MCL 500.3101(1) at all, because, as of the date of the accident, she had no intention of operating it or move it on a highway. The trial court both denied Johnson’s motion for leave to amend her answer and granted Allstate’s motion for summary disposition.
The Court of Appeals reversed the trial court’s summary disposition order, holding, first, that a question of fact existed as to whether Melvin had taken Johnson’s vehicle unlawfully and whether, therefore, Allstate was actually an “insurer obligated to pay personal protection insurance benefits.” Although Melvin testified that Johnson had never specifically told him that he could not drive her car, she did tell Melvin’s son, Eric, that he could not drive the car, and Eric, in turn, unlawfully gave permission to Melvin to drive the car. Accordingly, “reasonable minds could differ regarding whether Melvin had authority to use the Malibu, and consequently, whether plaintiff was obligated to pay benefits to Melvin.”
“[D]efendant also argues that a genuine issue of material fact exists regarding whether plaintiff was ‘[t]he insurer obligated to pay personal protection insurance benefits’ under MCL 500.3177. As noted above, MCR 500.3113 states that a person is not entitled to no-fault benefits if he used a motor vehicle that was ‘taken unlawfully.’ Again, an unlawful taking ‘applies to anyone who takes a vehicle without the authority of the owner, regardless of whether that person intended to steal it.’ Spectrum Health Hosps, 492 Mich at 518. We agree there is a genuine issue of material fact concerning whether Melvin had defendant’s permission to use the Malibu. Melvin testified that only Eric gave Melvin permission to use the Malibu. Melvin also testified he knew defendant owned the vehicle and that ‘[defendant] did not specifically tell [Melvin that he] could take the car.’ Considering the evidence in the light most favorable to defendant, the nonmovant, reasonable minds could differ regarding whether Melvin had authority to use the Malibu, and consequently, whether plaintiff was obligated to pay benefits to Melvin. Thus, the trial court erred when it granted plaintiff’s motion for summary disposition under MCR 2.116(C)(10).”
The Court of Appeals held, second, that the trial court erred by denying Johnson’s motion to amend her answer. Allstate argued that it would be prejudiced if Johnson were allowed to amend after so long a delay, but the Court of Appeals noted that ‘[d]elay, alone, does not warrant denial of a motion to amend.’ Moreover, there was no evidence that Johnson delayed in bad faith, and the amendment related to an issue in the case that Allstate was already fully aware of, having already deposed Melvin.
“Defendant’s answer was filed on August 25, 2020, and the motion to amend was filed on October 5, 2021; thus, it is clear that there was a significant delay between the filing of the answer and the motion to amend the pleadings. Plaintiff argues that it would be prejudiced if defendant were permitted to amend her answer after so long a delay. However, ‘[d]elay, alone, does not warrant denial of a motion to amend . . . .’ Decker v Rochowiak, 287 Mich App 666, 682; 791 NW2d 507 (2010) (quotation marks and citation omitted). Instead, ‘[l]eave to amend should be denied only for particularized reasons, such as undue delay, bad faith or dilatory motive on the movant’s part, repeated failure to cure deficiencies by amendment previously allowed, undue prejudice to the opposing party, or where amendment would be futile.’ Miller v Chapman Contracting, 477 Mich 102, 105; 730 NW2d 462 (2007).
There is no indication that defendant’s delay in filing the motion to amend was done in bad faith. Moreover, plaintiff has not shown that amendment of the answer would cause it to suffer actual prejudice, which exists if the amendment ‘would prevent the opposing party from receiving a fair trial, for example, the opposing party would not be able to properly contest the matter raised in the amendment because important witnesses have died or necessary evidence has been destroyed or lost.’ Weymers v Khera, 454 Mich 639, 659; 563 NW2d 647 (1997). No such issues have been presented in this case. We further conclude that the undue delay has not prejudiced plaintiff because plaintiff has been aware of Melvin’s deposition testimony, in which he testified that he did not receive permission from defendant to use the Malibu, since at least 2017. Thus, an amendment to the pleadings to include a defense concerning permissive use of the vehicle would not prevent plaintiff from receiving a fair trial. Plaintiff had been on notice of Melvin’s statements regarding the issue of permissive use of the Malibu, and should have no difficulty contesting this matter.
Additionally, the amendment of defendant’s pleading would be justified under the circumstances. See MCR 2.116(I)(5). Here, the evidence before the Court shows that there is a question of fact regarding whether Melvin had permission from defendant to use the Malibu. Melvin testified that Eric was the only person who gave him permission to use the Malibu, that he knew defendant owned the vehicle, and that ‘[defendant] did not specifically tell [Melvin that he] could take the car.’ Thus, we conclude an amendment to defendant’s answer is justified and would not be futile. Yudashkin, 247 Mich App at 651.”
Judge O’Brien dissented, arguing that Melvin should not be barred from PIP benefits under MCL 500.3113(a) because there was no evidence that he “knew or should have known that the motor vehicle was taken unlawfully.” According to O’Brien, Allstate should, therefore, be considered the “insurer obligated to pay [Melvin’s] personal protection insurance benefits.”