Michigan Court of Appeals; Docket No. 119084; Unpublished
Judges Doctoroff, Gillis, and Reilly; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
General Rule of Priority [§3125]
TOPICAL INDEXING:
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals interpreted the property damage priority provision contained in §3125 of the act and concluded that the language of this section is clear regarding issues of priority and that a person suffering accidental property damage claims benefits from the insurer of the owner or registrant first and the insurer of the operator of the vehicles involved second.
In this case, Payson was driving a rented automobile owned by National Auto Leasing Company and insured by Reliance. Payson lost control of the rented vehicle and struck a building owned by Travelers subrogor. Travelers brought action to recover the property damage loss from AAA, the insurer of the Payson family vehicles. AAA provided coverage of the Payson personal vehicles, including coverage for "temporary substitute vehicles" such as the rental vehicle. The lower court held that AAA, as insurer of the Payson family vehicles, had first priority as to the property damage.
The Court of Appeals reversed the lower court's conclusion that AAA was in first priority, and based its ruling upon the plain and ordinary language contained in §3125. That section provides that persons suffering property damage shall claim property protection benefits from the insurer of the owner or registrant of the vehicle involved.
The court also rejected the contention that AAA, by reason of language in its policy, had assumed first priority by contract. The AAA policy contained language stating that a temporary substitute car was an insured car under the AAA policy. In rejecting this argument, the court distinguished the case of Doss v Citizens Insurance Company (Item No. 876), which had held that in that case the defendant's policy language contracted to place the driver's insurance company in first priority. In contrast to the policy language at issue in Doss, supra, which had expressly stated that coverage under that policy was "primary," the language of AAA's policy was held not to contain such express language and, in fact, deferred to the priority language contained in the No-Fault Act, §3125. Consequently, the lower court holding that the driver's coverage was primary was reversed and the matter was remanded for entry of summary disposition in favor of AAA.
