Michigan Court of Appeals; Docket #293095; Unpublished
Judges Zahra, Talbot, and Meter; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Definition of Owner [3101(2)(h)]
Definition of Registrant [3101(2)(i)]
Disqualification for Uninsured Owners or Registrants of Involved Motor Vehicles or Motorcycles [3113(b)]
One-Year Notice Rule Limitation [3145(1)]
Time Limitations Applicable to Enforcing Indemnity or Reimbursement Rights Against Third Parties [3175(3)]
TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals held that where the court in a previous action between an injured person and Farm Bureau determined that the injured person was not disqualified from benefits, that prior decision was not res judicata in a second action by Farm Bureau seeking reimbursement from Progressive for the benefits it had been ordered to pay. However, the court remanded the matter for further proceedings as to whether the injured party was, in fact, the owner of an uninsured motor vehicle within the meaning of MCL 500.3113(b).
In the first action, Farm Bureau was determined by the court to owe benefits to the injured party, Oussama Chaar, even though he was involved in an accident while driving an uninsured motor vehicle owned by Nour, Inc. The trial court in the first action determined that Chaar was not an owner of the uninsured vehicle and, therefore, was entitled to benefits and not disqualified by reason of the provisions of MCL 500.3113(b).
Farm Bureau had been assigned the matter by the Assigned Claims Facility and, after the court’s ruling, paid the benefits and then sued Progressive, arguing that Progressive Insurance Company was higher in order of priorities for no-fault benefits because it issued a policy for Nour, Inc., owner of the vehicle which was involved in the accident.
In addressing Progressive’s contention that the trial court in the second action erred in granting summary disposition to Farm Bureau under the doctrine of res judicata, the Court of Appeals held that the doctrine of res judicata required satisfaction of four elements: “(1) the prior action was decided on the merits; (2) the prior judgment was a final decision; (3) the matter contested in the present action was, or could have been, resolved in the prior action; and (4) both actions involved the same parties or their privies.”
Although the Court of Appeals held that the first two elements were satisfied, the third and fourth elements were not satisfied. In other words, the issues of priority could not have been decided in the prior action because Progressive was not a party and the issue of its liability with regard to the claimant could not have been litigated. Further, the fourth element requiring that the matter involve the same parties or their privies was also not satisfied.
The court pointed out that the obligation of an insurer, assigned by the Assigned Claims Facility, is to pay benefits once they are held to be due and owing, and such an assigned insurer must pay the benefits even if there is some separate issue involving why it should not have to pay the benefits.
In addition to its res judicata argument, Progressive also argued that Chaar was “an owner” of the uninsured vehicle he was driving and that under MCL 500.3113(b), he was barred from receiving benefits. Progressive argued that the prior ruling that Chaar was not a statutory owner of the vehicle is not binding in this action. In responding to that argument, the Court of Appeals noted that it was undisputed that Nour, Inc. had title to the vehicle and was the registrant. However, Chaar was not a shareholder of Nour, Inc. Even so, the court held that under Ardt v Titan Ins Co, 233 Mich App 685 (1999), the court in that case interpreted “owner” under MCL 500.3101(2)(h)(i). The term “owner” emphasizes “proprietary or possessory use” as opposed to merely incidental usage under the direction or with the permission of another. The Court of Appeals held that there was ample evidence in the record that Chaar had unfettered access to the vehicle for greater than 30 days and, therefore, there was at least a question of fact regarding whether Chaar was an owner of the vehicle for purposes of MCL 500.3113(b).
Finally, Progressive argued that the one-year-back rule contained in MCL 500.3145(1) would bar Farm Bureau’s claim for reimbursement. In rejecting this argument, the Court of Appeals noted that in Allen v Farm Bureau, 210 Mich App 591 (1995), it was held that an insurer that insures a claim by assignment from the Assigned Claims Facility and then seeks reimbursement from a higher priority insurer is not a subrogee of the person who received the benefits, but an independent claimant, and the two-year statute of limitations in subsection (3) of MCL 500.3175 applies.
Based on the above, the matter was reversed in part and remanded for further proceedings.
