Michigan Court of Appeals; Docket #262833; Unpublished
Judges Bandstra, Neff, and Donofrio; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion 
STATUTORY INDEXING:
Exception for Commercial Vehicles [3114(2)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals addressed a priority question under §3114(2) which determines priority in situations where a passenger is injured while a passenger in a motor vehicle operated in the business of transporting passengers.
The business in question was an adult day care company which owned a van insured by Progressive. The van was equipped to transport one wheelchair bound passenger and five or six other passengers. The business was primarily a provider of adult day care to make respite available to family care givers. As part of its business, it would drive clients to and from their homes to the location of the business. It would also use the van if it took the clients on a field trips. As part of its business, clients were referred from the Area Agency on Aging. That agency required the van be insured for liability coverage and its clients be transported by the company.
When a wheelchair bound passenger in the van was injured, this dispute arose whether insurance was to be provided under no-fault insurance coverage through State Farm, the insurer of the passenger’s daughter with whom the passenger resided, or through Progressive, which insured the van.
The Court of Appeals held the provisions of §3114(2) were controlling. That section establishes priority for coverage and states, “A person suffering accidental bodily injury while an operator or a passenger of a motor vehicle operated in the business of transporting passengers shall receive the personal protection insurance benefits to which the person is entitled from the insurer of the motor vehicle.”
In this case, the court relied upon Farmers Insurance Exchange v AAA of Michigan, 256 Mich App 691 (2003), for support of its interpretation of the priority provision in question. That case held the priority for injuries sustained while a passenger was in a “motor vehicle operated in the business of transporting passengers” would be with the insurer of the motor vehicle. A two-part analysis required that first a determination be made “whether the vehicle was transporting passengers in a manner incidental to the vehicle’s primary use” and second “whether the transportation of the passengers was an incidental or small part of the actual business in question.” In this case, the adult day care business owned a van specifically equipped to handle transportation of wheelchair bound and other passengers. The van was purchased for that specific and primary purpose. Although transporting passengers was not the primary purpose of the adult day care operation, it was a significant enough component for the business to “provide the transportation in a specially equipped vehicle, owned and operated by the business and insured according to the commercial requirements established by the Area Agency on Aging.”
Based upon the legislative intent that §3114(2) creates a “business household,” and applies to commercial situations, along with the fact the transportation component of this business was important enough for the business to purchase a vehicle that was used primarily for and insured specifically for transporting its clients, the court held §3114(2) applies in this situation and, therefore, Progressive is in a higher level of priority than State Farm.
