Michigan Court of Appeals; Docket #299549; Unpublished
Judges Shapiro, Saad, and Beckering; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Definition of Owner [§3101(2)(h)]
Exception for Occupants [§3114(4)]
TOPICAL INDEXING:
Motor Vehicle Code (Definition of Owner) (MCL 257.37) (MCL 257.401a)
CASE SUMMARY:
In this unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s grant of summary disposition in favor of Citizens Insurance Company on the issue of whether Secura was the priority insurer under MCL 500.3114(4) for the injured person’s claims for no-fault benefits.
In this case, the injured person, Timothy Johnson, sustained injuries in a motor vehicle accident that occurred on October 26, 2005. At the time, Mr. Johnson was driving a 1993 Cadillac Seville with the permission of Genevieve Schumacher. At the time of the accident, Ms. Schumacher owned a Buick LeSabre that was specifically insured under a policy of insurance issued by Secura Insurance Company. Mr. Johnson was not insured under any automobile insurance policy. Mr. Johnson ultimately sought no-fault benefits from Secura on the basis that Ms. Schumacher owned the Cadillac Seville he was driving at the time of the accident and, even though the Cadillac Seville was not specifically insured under Ms. Schumacher’s policy of insurance through Secura, Secura was responsible to provide Mr. Johnson no-fault benefits as the “insurer” of the owner of the Cadillac Seville, pursuant to MCL 500.3114(4). Accordingly, the ultimate dispute in this case was whether Ms. Schumacher owned the Cadillac Seville.
At the time of the accident, the Cadillac Seville was registered with the Secretary of State’s office in Ms. Schumacher’s name, and only her name appeared on the vehicle title. However, in September 2005, Ms. Schumacher sold the Cadillac to her daughter’s boyfriend, Jeremy Qualls, and she cancelled the insurance coverage on the vehicle she had through Secura. When Ms. Schumacher purportedly sold the Cadillac to Mr. Qualls, she signed the title assignment on the back of the vehicle title, printed her address and stated a selling price of $1. Ms. Schumacher then gave the title to Mr. Qualls, but she did not write his name or address on the title as the purchaser of the vehicle. She did not disclose the odometer reading and she did not remove her license plate from the car. It was undisputed that Mr. Qualls never paid Ms. Schumacher any money for the Cadillac, that he never signed the title as the purchaser, that he never transferred the title to himself at a Secretary of State office, and that he never insured the vehicle. The record further reflected that when Ms. Schumacher sold the Cadillac to Mr. Qualls, her daughter, Michelle Ramirez, was in jail. When Ms. Ramirez was released, she and Mr. Qualls ended their relationship. Due to the termination of their relationship, Ms. Schumacher instructed Ms. Ramirez to retrieve the car from Mr. Qualls. Mr. Qualls did not challenge Ms. Schumacher’s attempt to repossess the car. Indeed, Mr. Qualls denied that he ever agreed to buy the Cadillac from Ms. Schumacher and he testified that Ms. Schumacher merely let him use the car while he was dating Ms. Ramirez. The Cadillac was ultimately repossessed by Ms. Schumacher who intended to pay for repairs to the car and to ultimately drive the vehicle herself. A few days later, Mr. Johnson, Ms. Schumacher’s friend, was driving the vehicle to the mechanic and was involved in the subject motor vehicle accident. Ms. Schumacher testified that she intended to insure the Cadillac, but she had not done so by the time the accident occurred.
When Secura disputed its responsibility to provide no-fault benefits to Mr. Johnson, Mr. Johnson filed a claim with the Assigned Claims Facility, which assigned the claim to Citizens. Citizens then filed this action against Secura, arguing that Secura was the higher priority insurer and that it must reimburse Citizens for the no-fault benefits paid to Mr. Johnson.
The court ultimately upheld the trial court’s grant of summary disposition in favor of Citizens on the issue of whether Secura was responsible for Mr. Johnson’s no-fault benefits. In upholding the trial court’s ruling, the court relied on the case of Farmers Ins Exch v Farm Bureau Ins Co, 272 Mich App 106 (2006) and Pioneer Mut Ins Co v Titan Ins Co, 252 Mich App 330 (2002), for the proposition that the No-Fault Act binds the insurer of the owner of the occupied vehicle, even if, as in this case, the policy actually covers another vehicle belonging to that owner and not the vehicle involved in the accident. In response to Secura’s argument that these cases were wrongly decided, the court noted that it was bound to follow these decisions under the rules of stare decisis.
The court also rejected Secura’s argument that there was a genuine issue of material fact about whether Schumacher owned the car at the time of the accident. The court noted that the rules regarding transfer of ownership are set forth in the Motor Vehicle Code, MCL 257.233. The court noted that the record reflected that pursuant to MCL 257.233(8), Ms. Schumacher signed the title assignment section on the back of the vehicle title and gave the title to Qualls. However, Qualls never signed the application for title or the assignment of the certificate of title for purposes of MCL 257.233(9). Therefore, even if Ms. Schumacher intended to sell the Cadillac to Qualls, the transfer did not technically become effective under MCL 257.233(90.
The court noted that the unusual facts in the case made it difficult to assign liability for no-fault benefits, but that ultimately the facts demonstrated that Ms. Schumacher was the legal owner of the vehicle based on the fact that she had possession of the vehicle, title was in her name, and the car remained officially registered in her name with the Secretary of State office. In this regard, the court specifically held:
“While the unusual facts in this case and certain technical failures by Schumacher and Qualls make it difficult to assign liability for no-fault benefits, all of the testifying witnesses agree that it was everyone’s intent and understanding that Schumacher regained ownership of the vehicle just before the accident occurred and that her ownership continued through the time the accident occurred. The “owner” of a motor vehicle is defined in 500.3101(h) as meaning a person who has the use of a vehicle for a period that is greater than 30 days. If the evidence shows that the right of use will extend beyond 30 days, the definition of “owner” is satisfied. Twichel v MIC General Ins Corp, 469 Mich 524, 530-531; 676 NW2d 616 (2004). Considering also that “ownership follows from proprietary or possessory usage, as opposed to merely incidental usage . . . .” it is clear that, at the time of the accident, Schumacher had full control and access to the vehicle and Qualls did not. Ardt v Titan Ins Co, 233 Mich App 685, 691; 593 NW2d 215 (1999). Not only did Schumacher have actual possession of the vehicle, the title was in her name, the car remained officially registered with the Secretary of State in her name and, as compared to Qualls, she had the exclusive use and custody of the vehicle. Schumacher testified that she intended to repair the vehicle and use it and Qualls testified unequivocally that the vehicle belonged to Schumacher. Thus, despite the failure of either witness to fully comply with the statutes, Schumacher clearly owned the vehicle at the time of the accident. Because Secura covered Schumacher’s other vehicle, Secura was the priority insurer for purposes of Johnson’s injuries and the trial court correctly granted summary disposition to Citizens." Farmers Ins Exch, supra at 113-114.
