Michigan Court of Appeals; Docket #295939; Unpublished
Judges P. J. Wilder, Whitbeck, and Fort Hood; unanimous: per curiam
Official Michigan Reporter Citation: Not applicable; Link to Opinion 
The Michigan Supreme Court DENIED Leave to Appeal on 10/24/11; Link to Order
STATUTORY INDEXING:
Disqualification for Uninsured Owners or Registrants of Involved Motor Vehicles or Motorcycles [§3113(b)]
Resident Relatives [§3114(1)]
Bona Fide Factual Uncertainty/Statutory Construction Defense [§3148(1)]
Obligation of Assigned Insurer to Pay Claim Promptly [§3175(1)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s judgment in favor of defendant/cross-plaintiff Auto-Owners Insurance Company, and plaintiff Scott Beaudette on the issue of whether the plaintiff was entitled to no-fault benefits and whether Farmers was obligated to pay the plaintiff’s no-fault benefits pursuant to MCL 500.3114.
The plaintiff in this case, Scott Beaudette, was injured in a motor vehicle accident that occurred on October 11, 2006 in Washtenaw County. At that time, the plaintiff was driving a 1992 Cadillac, which he owned, when he crossed the centerline and collided with another vehicle. The 1992 Cadillac was titled solely in Scott Beaudette’s name, but his mother, Jennifer Beaudette, had insured the vehicle through an Auto-Owners insurance policy that was issued in her name only.
As a result of the accident, the plaintiff sustained serious bodily injuries, including catastrophic brain injuries. An application for benefits was filed with Auto-Owners and Auto-Owners initially approved the application and paid benefits to the plaintiff. However, Auto-Owners stopped paying benefits on the basis that it was under the erroneous belief that plaintiff resided with his mother at the time of the accident. Ultimately, Auto-Owners referred plaintiff to the Assigned Claims Facility. The Assigned Claims Facility denied plaintiff’s claim on the basis that under MCL 500.3113(b), an owner of an uninsured motor vehicle or motorcycle involved in an accident is not eligible for benefits. The plaintiff then filed a complaint against Auto-Owners and the Assigned Claims Facility seeking to recover no-fault benefits. The Assigned Claims Facility ultimately assigned the plaintiff’s claim to Farmers Insurance Exchange, which was substituted in this action in place of the Assigned Claims Facility.
The Court of Appeals decision provides a lengthy overview of the procedural history of the motions for summary disposition filed by the parties and the respective motions for reconsideration. The bottom line is that, on appeal, the Court of Appeals had to decide whether the trial court correctly determined that the plaintiff was entitled to receive no-fault benefits from Farmers as a matter of law; whether the trial court was correct in holding that Farmers must reimburse Auto-Owners for the entire amount Auto-Owners paid for plaintiff’s no-fault benefits; and whether the trial court abused its discretion in granting the plaintiff’s motion against Farmers for attorney fees under MCL 500.3148.
The Court of Appeals ultimately determined that the trial court was correct in determining that Farmers was responsible to provide no-fault benefits to the plaintiff as a matter of law. In making this determination, the Court of Appeals recognized that under previous case law, such as Dobbelaere v Auto-Owners Ins Co, the Court of Appeals has recognized that MCL 500.3114(4) requires that the court look at the language of the subject insurance policy to determine whether a person is insured under that particular policy. The court recognized that in Dobbelaere, the plaintiff was not entitled to no-fault benefits. There was no indication in the policy language that the plaintiff would be covered under the no-fault policy, or any other evidence that would indicate an intention to insure the particular plaintiff under the no-fault policy. The court recognized that the facts of this case were similar to Dobbelaere, in that the policy failed to indicate an intent by Jennifer Beaudette and Auto-Owners to render the plaintiff as an “insured.” Accordingly, the Court of Appeals rejected Farmers argument that the plaintiff was “insured” under the language of the Auto-Owners insurance policy.
In regards as to whether the plaintiff would be covered under the Auto-Owners policy, the Court of Appeals ruled that the trial court correctly held there was no genuine issue of material fact that the plaintiff was not a resident-relative of Jennifer Beaudette. In reaching this holding, the court recognized there was no evidence that indicated the plaintiff intended to reside either indefinitely or permanently with Jennifer Beaudette. Rather, plaintiff lived with his girlfriend at the time of the accident and his periodic stays at Jennifer Beaudette’s house prior to the motor vehicle accident were irrelevant to the determination of the plaintiff’s residency at the time of the collision.
The Court of Appeals further rejected Farmers argument that the plaintiff was disqualified from receiving no-fault benefits under MCL 500.3113(b). Farmers argued that because the plaintiff owned the 1992 Cadillac and did not insure it, he was disqualified from receiving no-fault benefits under §3113(b). The court rejected this argument based upon the Court of Appeals decision in Iqbal v Bristol West Ins Group, 278 Mich App 31 (2008). In this regard, the Court of Appeals held that under the reasoning of the court’s decision in Iqbal, the plaintiff was not disqualified from receiving no-fault benefits because the 1992 Cadillac was insured and the statutory language of §3113(b) does not require that the plaintiff be the person who obtained the coverage.
The Court of Appeals further held that the trial court correctly ruled that Farmers was obligated to reimburse Auto-Owners the entire amount it had paid in no-fault benefits to the plaintiff. The court recognized that MCL 500.3175(1) states that, “An insurer to whom claims have been assigned shall make prompt payment of loss in accordance with this act and is thereupon entitled to reimbursement by the assigned claims facility for the payments and the established loss adjustment cost. . . . “ (emphasis in original).
The Court of Appeals further held that it was not an abuse of discretion by the trial court to grant the plaintiff’s motion for attorney fees against Farmers. In doing so, the Court of Appeals rejected Farmers argument that its refusal to pay no-fault benefits was reasonable as a matter of law because it was based on a legitimate question of statutory interpretation. In this regard, the Court of Appeals reasoned that following the Iqbal decision, Farmers was clearly required to pay benefits to the plaintiff and could not legally refuse payment based on its theory that Auto-Owners was first in priority. The court further reasoned that the evidence showed that benefits were overdue because Farmers refused to pay them within 30 days after the claims were submitted. Accordingly, the Court of Appeals ultimately determined that the trial court did not abuse its discretion by granting the plaintiff’s motion for attorney fees under §3148.
