Michigan Court of Appeals; Docket No. 194316; Published
Judges Saad, Kelly, and Bandstra; Unanimous
Official Michigan Reporter Citation: 235 Mich App 273; Link to Opinion 
STATUTORY INDEXING:
Nature and Scope of PPI Benefits (Property Damage and Loss of Use) [§3121(1)]
Proper Defendant [§3121]
TOPICAL INDEXING:
Legislative Purpose and Intent
Motor Vehicle Code (Civil Liability of Owner) (MCL 257.401)
CASE SUMMARY:
In this unanimous published Opinion by Judge Saad, the Court of Appeals held that the provisions of the Owner Liability Act, MCLA 257.401, do not allow for the bringing of a tort action for negligently caused property damage, because the provisions of section 3135 of the No-Fault Act abolished such direct action against the tortfeasor, and permitted only an action to be brought against the tortfeasor's insurer.
In this case, Travelers, as subrogee of the Pine Knob Wine Shop, sought to recover compensation for property damage caused to the Fine Knob Wine Shop, when a U-Haul truck owned by defendant U-Haul caused damage to the Wine Shop. After paying the damages, Travelers sought reimbursement as subrogee of the Pine Knob Wine Shop by filing a direct action against U-Haul. Travelers failed to sue the automobile insurer of U-Haul within the one (1) year statute of limitations, section 3145(2), and instead, sued U-Haul directly.
The Court of Appeals upheld the trial court grant of summary disposition on this claim, finding that such direct actions for economic damages were barred by the provisions of the No-Fault Act, section 3135(2). The Court of Appeals rejected Travelers argument that under the owner liability statute, MCLA 257.401(1), U-Haul as owner of the motor vehicle that was negligently operated at the time the damage was caused, remained liable for such damage. Travelers contended that under the owner liability statute, the owner of a motor vehicle remains liable for any injury occasioned by the negligent operation of the motor vehicle.
The Court of Appeals, noting that there is no published case addressing Owners Liability Act claims for property damage since the enactment of the No-Fault Act, held that since the No-Fault Act is more recent than the Owners Liability Act, it must take precedence. The No-Fault Act replaced, to a large extent, a tort-based system of compensation with a no-fault insurance scheme. Under rules of statutory construction, the No-Fault Act “trumps” the Owners Liability Act, and thus, actions under the Owners Liability Act are permissible only where allowed under section 3135. To otherwise allow such actions under the Owner Liability Act would result in the No-Fault Act's abolition of tort liability arising from “ownership” of a motor vehicle having little or no meaning.
The court also rejected Travelers argument that the common law doctrine of negligent entrustment would permit the pursuit of its claim. The court held that an action based on allegations that the defendant negligently entrusted an unfit operator to use an automobile is still an action arising from the use of a motor vehicle, and therefore, barred by the No-Fault Act, unless it falls under the No-Fault Act's residual liability provisions.
