Michigan Court of Appeals; Docket No. 148573; Published
Judges Sawyer, Neff, and Talbot; 2-1 (with Judge Talbot dissenting); Opinion by Judge Sawyer
Official Michigan Reporter Citation: 205 Mich App 273; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this published Opinion authored by Judge Sawyer, the Court of Appeals defined the scope of a "named driver exclusion" in this suit for collision damage coverage.
Plaintiff was the owner of a 1989 van. The vehicle was insured under a policy of no-fault automobile insurance that included collision damage coverage. The policy also had a "named driver exclusion" for plaintiff’s roommate, who had previously been involved in an accident with one of plaintiff s vehicles. While plaintiff was in the hospital, the roommate drove the van without plaintiff’s permission and was involved in an accident that resulted in damage to plaintiff’s vehicle. There was no dispute that the roommate had taken the vehicle without plaintiff’s permission, and in fact, had been instructed on prior occasions that he was not to drive the van.
The "named driver exclusion" provided that the non-mandatory coverages under the policy would not be applicable in the event that the roommate was driving the vehicle at the time of the loss. The issue before the court was whether this exclusion applied when the excluded driver was operating the vehicle without the permission of the named insured.
The majority of the panel found that since the "named driver exclusion" was silent on the issue of what effect, if any, theft of the insured vehicle by a named excluded driver may have on the coverage, the policy could be interpreted as to either provide or exclude coverage under these circumstances. The majority applied the rule of "reasonable expectations" to conclude that the insured would reasonably expect coverage when the named excluded driver was operating the vehicle, where such use was non-permissive. The court also found that the policy exclusion was ambiguous and therefore, was to be construed against the insurer and in favor of coverage.
The majority noted that it was not addressing the issue of whether it is legally proper to draft a "named driver exclusion" so as to preclude coverage, even when the named excluded driver is operating the vehicle without die consent of the insured person.
Judge Talbot dissented and would hold that the exclusion applies to preclude coverage anytime the named driver is operating the vehicle, regardless of whether such use of the vehicle is permissive or non-permissive.
