Michigan Court of Appeals; Docket No. 198104; Unpublished
Judges Corrigan, Griffin, and Hoekstra; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
PIP Insurer’s Right to Reimbursement for Claims Paid Arising Out of Uninsured Vehicle Injuries [§3177(1)]
Ways to Provide Required Security [§3101(3) + 3101(4)]
TOPICAL INDEXING:
Uninsured Motorist Benefits: Lien and Reimbursement Rights of Uninsured Motorist Insurers
Motor Vehicle Code (Registration and Title Requirements) (MCL 257.201, et seq.)
Motor Vehicle Code (Civil Liability of Owner) (MCL 257.401)
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals addressed the issue of whether an insurance carrier that has paid uninsured motorist coverage to its insured is entitled to reimbursement from the owner of the vehicle driven by the driver at fault, when it is later discovered that, in fact, the owner of the vehicle involved in the accident was insured. Under these circumstances, the court found that the uninsured motorist carrier could not recover the benefits paid from the owner of the vehicle. The Court of Appeals also ruled that title to an automobile remains with a car dealer when it has failed to send the application for transfer of title to the Secretary of State prior to the accident.
The defendant car dealer sold an automobile and completed the title and registration transfer form based upon the representation that the purchaser was insured. Fifteen days later, the purchaser collided with a truck owned by Total and insured by Hartford. The driver of the Total truck was seriously injured in the accident and the purchaser of the automobile was killed. The defendant car dealer had not mailed to the Secretary of State the application of transfer of title and registration and proof of insurance until after the accident had occurred. After concluding that the purchaser of the vehicle was uninsured, the driver of the truck submitted a claim for uninsured motorist coverage with Hartford, which paid benefits subsequent to arbitration. Hartford then filed suit seeking to hold the defendant car dealer liable for the uninsured motorist benefits it paid to the Total truck driver. The trial court found that the plaintiff insurer was not entitled to seek reimbursement of uninsured motorist benefits, because the accident involved an insured vehicle.
The first issue before the Court of Appeals was whether the car dealer or the purchaser owned the automobile at the time of the accident, as the dealer was insured and the purchaser was not. The Motor Vehicle Code, MCLA 257.233(5); MSA 9.1933(5) provides that the effective date of transfer of title is the "date of execution of either the application for title or the certificate of title" and under the holding of Ladd v Ford Consumer Finance Company, Inc., 217 Mich App 119 (1986), "execution " occurs when the application is sent with the necessary forms to the Secretary of State. Here, the defendant car dealer remained the "owner" of the vehicle when the accident occurred because it did not send the application into the Secretary of State prior to the accident. As the defendant car dealer was the owner of the vehicle, the vehicle was insured under the defendant's commercial automobile policy. The court's holding in this regard is consistent with other cases stating that the dealer retains ownership of the vehicle it sells until the dealer complies with the statutory provisions for transferring title to the purchaser.
The next issue was whether the uninsured motorist carrier could seek reimbursement from the owner of the vehicle driven by the at-fault driver. The plaintiff uninsured motorist carrier argued that §3116(2) of the No-Fault Act did not bar it from obtaining reimbursement, as that section only applies to reimbursement for personal protection insurance benefits, whereas here, plaintiffs claim was for reimbursement of uninsured motorist benefits. The Court of Appeals rejected this argument, however, finding that plaintiffs were not seeking reimbursement from an uninsured motorist, and instead, were attempting to hold the defendant civilly liable under the owners liability statute, MCLA 257.401(1); MSA 9.2101, and because the defendant in this case was properly insured at the time of the accident, plaintiffs may not seek reimbursement of uninsured motorist benefits from the defendant, since plaintiffs were not contractually required to provide coverage.
The Court of Appeals also found inapplicable the doctrine of equitable subrogation as asserted by plaintiff. The court explained that equitable subrogation "is a legal fiction through which a person who pays a debt for which another is primarily responsible, is substituted or subrogated to all the rights and remedies of the injured party." Here, the court found this doctrine inapplicable, as the defendant car dealer would have been immune from tort liability to the tanker truck driver because it was insured at the time of the accident and, therefore, plaintiffs were not obligated to provide the uninsured motorist coverage.
Finally, plaintiff argued that it was entitled to recover the uninsured motorist benefits under the doctrine of common law indemnification, which is based upon the equitable principle that where a wrongful act of one results in another being held liable, the latter party is entitled to restitution from the wrongdoer. The Court of Appeals affirmed the lower court's dismissal of this cause of action because it could discern no relationship among the parties that warranted defendant car dealer being held liable for the uninsured motorist carrier's losses. 1982.
