Michigan Court of Appeals; Docket No. 164081; Unpublished
Judges Murphy, White, and Collette; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Uninsured Motorist Benefits
Revised Judicature Act – Arbitration (MCL 600.5001, et seq.)
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this per curiam unpublished Opinion, the Court of Appeals addressed the issue of whether the trial court had the authority to order arbitration of an uninsured motorist claim, where the subject policies did not provide for "statutory arbitration."
Plaintiff’s minor son, Thomas Tagg, was killed while driving an uninsured automobile owned by a person named William Sprague. Tagg's father was insured under separate policies issued by Transamerica and Frankenmuth. The decedent's mother was insured under a policy issued by Farmers. All three policies contained uninsured motorist coverages that provided for the arbitration of disputed claims. The plaintiff submitted a claim for uninsured motorist benefits under each policy which was denied by each of the insurance companies for various reasons. Subsequently, plaintiff sought arbitration which was refused by the insurers. Plaintiff then filed suit pursuant to MCR 3.602, requesting that the court order arbitration. However, MCR 3.602 pertains to arbitration clauses that specifically provide for a judgment to enter upon an arbitration award, pursuant to statute, MCLA 600.500I. As the subject insurance policies did not contain the statutory language to this effect, the trial court found that the action was not properly brought pursuant to MCR 3.602 and, further, that the court did not have the authority to order an arbitration. Accordingly, the trial court granted summary disposition in favor of the insurers pursuant to MCR 2.116(C)(8).
The Court of Appeals noted that each of the three subject policies contained arbitration clauses in the event of a dispute over uninsured motorist benefits. Each of the policies contained a provision that if the parties could not agree to the appointment of an arbitrator, the judge of a court having jurisdiction had the authority to appoint the arbitrator. The Court of Appeals held that although the action was improperly brought pursuant to MCR 3.602, the trial court, in fact, had the authority under the insurance policies to appoint an arbitrator. As plaintiffs were not afforded an adequate opportunity to address any deficiencies in the complaint through an amendment, the trial court's grant of summary disposition was improper. The Court of Appeals held:
"The trial court apparently concluded that absent language making the arbitration provisions 'statutory,' it had no authority to grant plaintiffs any relief. The court erroneously failed to recognize that it could appoint an arbitrator and compel defendants to arbitrate, although it was correct in concluding it lacked authority to confirm or enter judgment on any resulting arbitration award under the court rule....
Each arbitration clause at issue here contemplates resort to the courts by providing that either party may request a court to appoint an arbitrator. Additionally, the Farmers' arbitration provision provides: 'formal demand for arbitration shall be filed in a court of competent jurisdiction,' although also allowing demand by letter.
We conclude the trial court had authority to appoint an arbitrator and enforce the common law agreements to arbitrate. Each of the policies, reasonably construed, requires arbitration of the issue whether an insured is legally entitled to recover damages if the insured and insurer cannot agree on the issue and either party requests arbitration."
Plaintiffs claim against the uninsured owner of the vehicle, Sprague, was brought under a theory of negligent entrustment. Farmers Insurance Company claimed the plaintiff did not have a viable legal claim in this regard, asserting that the entrustee, plaintiff’s decedent Thomas Tagg, would not have a claim against the entrustor. However, the Court of Appeals rejected this argument, noting that the courts of the state of Michigan have never expressly held that the entrustee does not have such a cause of action. In any event, the issue of whether plaintiffs had legal entitlement to uninsured motorist benefits was a subject to be resolved through arbitration. Accordingly, the case was remanded to the trial court for the entry of an order to appoint an arbitrator to address the coverage issues.
