Michigan Court of Appeals; Docket No. 195936; Unpublished
Judges White, Bandstra, and Smolenski; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Liability Policy Exclusions for Owned and Non-Owned Vehicles [§3131]
Liability Exclusions Prohibiting Stacking of Coverages [§3131]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unpublished per curiam Opinion, the Court of Appeals found that a definition of the term "non-owned vehicle" contained a policy of insurance was ambiguous and therefore to be construed in favor of coverage. The case arose out of an accident involving a 16-year old boy who resided with his parents at the time of the accident. The boy was driving a truck owned by his father's employer that was involved in an accident. The plaintiff had issued a policy of no-fault insurance covering two automobiles owned by the parents. The accident vehicle was covered under a policy issued by a different insurer to the employer of the boy's father. Third-party liability coverage was sought under the policy issued by plaintiff covering the parents' vehicles which were not involved in the accident, in addition to the insurance that covered the accident vehicle.
The plaintiff insurer filed a declaratory relief action seeking a determination that coverage was not applicable under the policy because the accident vehicle was one neither "owned” nor "non-owned” for which coverage was afforded under the terms of the subject policy, and therefore; excluded from coverage. The term "non-owned automobile," for which coverage was provided, was defined in the plaintiffs policy as follows:
“'Non-owned automobile' means an automobile or trailer not owned by or furnished for the regular use of either the named insured or any relative, other than a temporary substitute automobile."
The insurer contended that this definition operated to exclude coverage for the vehicle involved in the subject accident if.it was furnished for the regular use of the driver or his father.
The Court of Appeals found this case to be controlled by the Michigan Supreme Court's plurality opinion in Powers v DAIIE, All Mich 602 (1986) (Item No. 979). The policies at issue in the Powers case contained essentially the same definition of "non-owned vehicle." In Powers, the plurality opinion of the Supreme Court concluded that the definition of "non-owned automobile" was a term in common use with unambiguous meanings and the insurer's construction gave meaning to that term which differed from the common understanding of it. Furthermore, the insurer was attempting to exclude coverage through a definition, whereas the insured would expect for the limitation of coverage to be contained in the exclusions section of the policy. This definition of the term "non-owned automobile" resulting in an exception to coverage violated the reasonable expectations of the insured that coverage would be provided under the circumstances of the case because the policy did provide coverage for the use of a "non-owned" vehicle, but only as that term was defined by the policy.
The Court of Appeals was also persuaded by the fact that since the accident vehicle was insured, the plaintiff insurer was not being asked to assume the risk oh an uninsured vehicle. Furthermore, the Court of Appeals found significant that "the limits of liability on the accident vehicle exceeded the limits on the instant policy, so it cannot be said that the insured was attempting to obtain higher limits for a lesser premium." For these reasons, the Court of Appeals held that the trial court did not err in granting summary disposition in favor of the insureds and permitting third-party liability coverage to be "stacked” under the policies issued on the “non-owned" vehicle in addition to coverage available on the accident vehicle.
