Michigan Court of Appeals; Docket #217470; Published
Judges White, Wilder and Zahra; unanimous; per curiam
Official Michigan Reporter Citation: 246 Mich. App. 713, Link to Opinion 
STATUTORY INDEXING:
General Rule of Priority [3114(1)]
Equal Priority Situations [31114(6)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous published per curiam opinion, the Court of Appeals held that a person in the process of purchasing a vehicle from a dealer, but who had not yet completed the sales transaction, prior to the happening of the accident, is entitled to personal injury protection benefits from Allstate Insurance Company which had issued a “temporary binder” providing insurance for the vehicle.
Cherry Broadway was involved in a motor vehicle accident while driving a vehicle she was in the process of purchasing from a dealer. The dealer was insured by Universal Underwriters Group and paid her personal injury protection benefits following the accident. Underwriters then claimed that Allstate should reimburse it for those benefits paid, because Allstate had issued a temporary binder on the vehicle during the processing of the transaction. Allstate’s agent had faxed to the dealer a certificate of no-fault insurance for Broadway, covering the vehicle, prior to the happening of the accident. Broadway was driving the vehicle, although the sales transaction had not been completely consummated. Because she did not own a vehicle or have insurance at the time, she signed a temporary driving permit allowing her to use the vehicle while financing was being approved. After the accident, for other reasons, Broadway decided to not complete the transaction on the vehicle, and instead, purchased another vehicle from the same dealer. Universal paid Broadway’s PIP benefits and then filed suit claiming that Allstate was obligated to pay as the priority insurer under 3114(1), or alternatively, if both insurers were deemed to be in the same order of priority, then Universal should be entitled to partial recoupment under 3114(6) [sic].
The trial court determined that Broadway had applied for financing, but did not have ownership of the vehicle when the accident occurred. The court reasoned that automobile insurance could not be acquired unless one owned an automobile, and therefore, an insurable interest did not exist until one obtained ownership of the vehicle. The trial court relied upon Clevenger v Allstate Insurance Company, 443 Mich 646 (1993) [Item No. 1629].
The Court of Appeals held that the binder issued by the agent for Allstate was sufficient to obligate Allstate to provide coverage. There is no requirement under Clevenger that an insured actually own or be a registrant of a vehicle in order to have an insurable interest adequate to support PIP coverage. Madar v Lee General Insurance Company, 152 Mich App 734 (1986) [Item No. 942]. Citing from Madar, supra, the Court of Appeals held that there is no requirement that there be an insurable interest in a specific automobile, since an insurer is liable for personal protection benefits to its insured, regardless of whether or not the vehicle named in the policy is involved in the accident. “A person obviously has an insurable interest in his own health and well being. This is the insurable interest which entitles persons to personal protection benefits regardless of whether a covered vehicle is involved.”
The Court of Appeals held that Clevenger was a liability coverage case, not a PIP benefit case, and did not overrule Madar. Therefore, the trial court improperly granted Allstate summary disposition on the basis that Broadway lacked an insurable interest. The case was reversed and remanded for further proceedings.
[Editor’s Comment: The court’s reference to §3114(6) is an error, as that section only applies to motorcycle-motor vehicle claims.]
