Michigan Court of Appeals; Docket No. 298984; Unpublished
Judges Kelly, Fitzgerald, and Whitbeck; Unanimous; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
On May 3, 2013, the Michigan Supreme Court DENIED Leave to Appeal the October 18, 2011 judgment of the Court of Appeals; Link to Order
STATUTORY INDEXING:
Exception for Commercial Vehicles [§3114(2)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion regarding the priority of insurers under the commercial-vehicle exception, the Court of Appeals held that a festival promoter “did not use its vans in the business of transporting passengers within the meaning of MCL 500.3114(2)” when it incidentally transported attendees who had missed their scheduled shuttle-bus, reasoning that “the primary business (that is, the business from which [the insured] derived profit) was the production of the . . . [m]usic [f]estival. [T]ransportation of the attendees by bus, let alone in the vans, was entirely incidental to its overall business.”
In this case, attendees of a six-day annual music festival in northwest Michigan, Ann Drucker, her children, and her domestic partner, Carol Dineen, were injured in a roll over vehicle accident while riding in a van owned by the festival’s organizer, for- profit corporation We Want the Music Now (WWTMC). Knowing that many attendees of the festival were from out of state, WWTMC offered shuttle transportation from the Grand Rapids Airport to the festival for an additional nonrefundable fee of $45. The actual transportation was then provided by “greyhound type” buses that were contracted for with a third party, Great Lakes Motor Coach. Attendees wishing to use the shuttle service were advised through advertisements that the shuttles would only be available at predetermined times and that WWTMC was not responsible for providing any alternative transportation for attendees who missed a scheduled shuttle.
WWTMC also owned various other vehicles, including three 15-passenger multi-purpose utility vans that were generally used only for tasks related to the production of the event itself. These vans were not used for providing the shuttle service but did on occasion go to and from the airport for other purposes.
On the date of the accident, several attendees arrived at the airport late due to their flight being delayed and consequently missed their scheduled shuttle bus. Instead of waiting for the next shuttle, Drucker and Dineen negotiated with a volunteer driver of a WWTMC production van – that just happened to be at the airport – to give them a ride to the festival in the van. On the way to the festival from the airport, the van was involved in a rollover accident.
Following the accident, Colorado insurers Farmers Insurance and State Farm Insurance began paying PIP benefits and brought suit to seeking a determination that Michigan Insurance Co. was the insurer in order of priority to provide PIP benefits, along with a declaration that Michigan Ins. Co. should adjust and pay any future claims as well as the expenses incurred in handling the existing claims. In a cross-motion for summary disposition, Michigan Insurance Co. moved for argued that the van that the attendees were riding in at the time of the accident was not “a motor vehicle operated in the business of transporting passengers” under MCL 500.3114(2) because it was primarily used for production tasks.
The trial disagreed and granted summary disposition in favor of Farmers and State Farm, finding that “that the van that WWTMC owned was ‘a motor vehicle operated in the business of transporting passengers’ such that [the injured attendees] should recover benefits from Michigan Insurance, as the insurer of the vehicle,’” reasoning that “WWTMC was using the van to transport passengers at the time of the accident, that the van was designed to accommodate passengers, that the van was insured as a commercial vehicle, and that WWTMC’s business was benefitted by transporting people to the music festival.”
This appeal followed and the Court of appeals reversed, holding that the trial court erred in finding that the van involved in the accident “was a motor vehicle operated in the business of transporting passengers” under MCL 5003114.2(2). In reaching this conclusion, the court explained that resolution of this issue requires the application of the “primary purpose/incidental nature” test as set forth in Farmers Ins. Exch. v AAA of Mich., 256 Mich. App. 691; RB No. 2380 (2003), which requires a two pronged analysis. In this regard the court explained:
“The Farmers Ins Exch Court broke down the test into a two-part analysis. The first part was whether the vehicle was transporting passengers in a manner incidental to the vehicle’s primary use. And the second part of the analysis was whether the transportation of the passengers was an incidental or small part of the actual business in question.”
In analyzing the first prong, the Court concluded that the transport of the attendees in WWTMC’s utility van was incidental to the van’s primary use. In reaching this conclusion, the Court considered the case of State Farm Mut Ins v Progress Mich Ins, unpublished case per curiam; RB No. 2162, which held that the commercial-vehicle exception did apply to a van that was “specifically purchased for and equipped to handle transportation of wheel-chair bound and other passengers” in connection with an adult day care business. The Court here found that the WWTMC’s transporting of the attendees in the utility van was distinguishable from the pertinent facts in that case and instead found the case of Thomas v Tomczyk, 142 Mich App 237; RB No. 826 (1985) to be more analogous, which held that the use of a college student’s personal vehicle in a carpool situation did not to trigger the commercial vehicle exception under 3114(2) even though the riders in that carpool paid the vehicle owner money to participate. In this regard, the court explained:
“. . . unlike in Farmers Ins Exch where the vehicle’s primary use was personal, there is no dispute that the van’s primary use in this case was for business purposes. However, contrary to Farmers Insurance’s contentions on appeal, the fact that the van was primarily, if not solely, used for business purposes, is not dispositive of the issue. Accepting that the van’s primary use was for business purposes, the gravamen of the question then is whether the van was transporting attendees in a manner incidental to the vehicle’s primary business use.
Here, [WWTMC’s president Lisa] Vogel testified that WWTMC purchased the three vans for, and intended to use them primarily for, business production purposes. WWTMC used the vans to transport performers, staff, volunteers, and equipment on the festival grounds. And to facilitate transportation of equipment, WWTMC often removed the van seats and stored them on the festival grounds. When WWTMC took the vans off site, their use was primarily to take volunteers to greet and direct attendees at the airport, to handle luggage overflow from the shuttle buses, and to run errands in Grand Rapids. Vogel testified that the vans were not intended for use by the music festival attendees, except in certain unusual or emergency circumstances.
The facts of this case are unlike the facts of State Farm Mut Ins Co v Progressive Mich Ins Co, in which a panel of this Court held that a van specifically purchased for and equipped to handle transportation of wheelchair-bound and other passengers was a motor vehicle operating in the business of transporting passengers under MCL 500.3114(2) because the transportation component of the adult day care provider’s business “was important enough for the business to purchase a vehicle that was used primarily for and insured specifically for transporting” the day care’s clients. . . . Indeed, we equate WWTMC’s use of its vans for the transportation of attendees in this case as similar to the college student’s offer to give his fellow students a ride home in Thomas. As in that case, here, it was not the primary function of the vans to carry passengers for hire. It merely happened that incidental to returning to the music festival, it was convenient for the volunteer to take the several attendees who were anxious to get to the festival. On the basis of this record, we therefore conclude that the van’s use to transport attendees was incidental to the vehicle’s primary use for business production purposes.”
After concluding that the transporting the attendees in the van that day was only incidental to its primary purpose, the Court went on to find under the second prong of the Farmers Ins. Exch test that “WWTMC’s primary business (that is, the business from which it derived profit) was the production of the Michigan Women’s Music Festival. WWTMC’s transportation of the attendees by bus, let alone in the vans, was entirely incidental to its overall business.” In this regard, the court explained:
"According to Vogel, out-of-state attendees, who did typically use the shuttle bus service, totaled only 211 out of 3,524, or only about 16-17 percent of the total attendees in 2008. Thus, statistically, the shuttle service was not a significant part of WWTMC’s business. Indeed, Vogel testified that most years WWTMC either broke even or lost money by providing the shuttle bus service. . . .
More importantly, in arguing the significance of the shuttle service, State Farm and Farmers Insurance conveniently ignore that the van at issue, although sometimes used to transport attendees, was not actually intended for use as a shuttle transportation vehicle. Instead, WWTMC specifically contracted with a commercial carrier for the purpose of providing the shuttle service. And to the extent that the shuttle service was only an incidental or small part of production of the music festival, WWTMC’s occasional transportation of attendees in its vans was in turn only incidental to the shuttle service. Indeed, in 2008, the year of the accident, only 23 attendees total were transported in a WWTMC van, with 15 of those attendees being those involved in the accident who somehow (initially fortuitously but ultimately lamentably) negotiated their way onto a van that happened to be at the airport. Moreover, we do not find it significant that Drucker and Dineen paid a fee for transportation to the festival. As stated above, the shuttle fees were only a minor portion of the music festivals revenues, and Drucker and Dineen paid the fee for the privilege of seats on one of the shuttle buses, for which they could have waited. Instead, they chose to hitch a ride in a utility van."
Thus, because the transport of the attendees in the utility van on the date of the accident was incidental to the van’s primary purpose, and because the shuttle transportation that WWTMC offered to all of its attendees was altogether incidental to its primary business purpose, “WWTMC did not use its vans in the business of transporting passengers within the meaning of MCL 500.3114(2),” the trial court erred in granting summary disposition in favor of State Farm and Farmers Insurance. Accordingly, the Court reversed and remanded for entry of a judgment in favor of Michigan Insurance Co.
