Michigan Supreme Court; Docket No. 83892; Published
Opinion by Justice Archer (with Justices Griffin and Brickley, Concurring; with Justices Levin and Cavanagh, Concurring Separately)
Official Michigan Reporter Citation: 434 Mich 288; Link to Opinion 
STATUTORY INDEXING:
General / Miscellaneous [§3135]
TOPICAL INDEXING:
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this opinion by Justice Archer, joined by Justices Riley and Boyle, the Supreme Court interpreted an "omnibus clause" in Aetna's no-fault policy in a case where Celina, a general liability insurer, sought to make Aetna an additional insured under the omnibus clause, requiring Aetna to insure and defend a landowner's liability claim against Corrosion Control, Celina's insured.
In this case, Russell Naasko, an employee of B & L Hotshot, Inc. (BLH), was involved in the delivery and pickup of pipes to and from Corrosion Control's premises. Naasko drove to Corrosion Control's premises in a BLH boom truck to retrieve certain sandblasted pipes. During the loading operation, Naasko held a guideline attached to the pipe being lifted by the boom. Naasko was injured when the boom came into contact with an overhead electrical power line maintained on Corrosion Control's premises. Naasko sued Corrosion Control on the theory that Corrosion Control was negligent in directing that the pipes be delivered near the power line. Naasko claimed that by storing the sandblasted pipes near an overhead power line, Corrosion Control created a hazardous work environment.
Corrosion Control's general liability insurer, Celina, defended Corrosion Control but following mediation, tendered the defense to defendant Aetna Life & Casualty. Aetna was BLH's no-fault motor vehicle insurer. Celina claimed that, through the acts or omissions of Naasko, Corrosion Control became an additional insured under the omnibus clause of Aetna's no-fault policy issued to BLH. Aetna refused to defend Corrosion Control. The case was settled, and Celina filed suit seeking recovery of the amount paid for settlement.
The issue on appeal was whether Corrosion Control had contractual rights under the Aetna no-fault policy pursuant to the omnibus clause. Aetna contended that Naasko's original lawsuit against Corrosion Control did not state a claim arising out of the use, ownership, or maintenance of a motor vehicle; and, therefore, Aetna had no duty to defend or insure. The trial court rejected Aetna's argument, holding that even though Naasko's complaint alleged a landowner's liability claim, his injuries arose from the use of a motor vehicle. In light of the language of the omnibus clause of Aetna's policy, the trial court concluded that Corrosion Control was an additional insured under Aetna's policy. On appeal, the Court of Appeals affirmed in an unpublished per curiam opinion. (See Item No. 1326 following.)
The Court of Appeals held that Corrosion Control was "using" the boom truck as a motor vehicle when Naasko was injured.
In reversing the Court of Appeals and the trial court, Justices Archer, Riley, and Boyle held that the No-Fault Act did not abrogate a non-motorist defendant's tort liability even though his negligence caused a motor vehicle accident. In citing Citizens Insurance v Tuttle, 411 Mich 536 (1981), the court would hold that in order for tort liability to be abrogated, the No-Fault Act required more than a plaintiff’s injury having arisen merely from the use of a motor vehicle. The defendant's wrongful act or omission, upon which his liability was predicated, must also have arisen from the ownership, maintenance, or use of a motor vehicle. Therefore, the question presented in the present case was whether Corrosion Control was a "motorist defendant whose tort liability falls within the scope of the No-Fault Act and Aetna's policy."
Justice Archer wrote that they were unpersuaded that Corrosion Control was a motorist defendant because its alleged wrongful act, and hence, its alleged liability, did not arise from the use, ownership, or maintenance of the BLH boom truck. Corrosion Control, therefore, had no contractual rights under Aetna's policy. Nowhere on the face of the complaint did Naasko allege facts indicating that Corrosion Control's wrongful conduct arose from the use, maintenance, or operation of a motor vehicle. Even though Naasko's allegations would form a basis for entitlement to first party no-fault benefits against his employer, those facts were insufficient to support the legal conclusion that Corrosion Control's own negligence also arose from the use of the BLH boom truck and fell within the scope of Aetna's no-fault policy. Justice Archer stated that he could only conclude that Corrosion Control was negligent, if at all, for directing BLH employees to place the pipes near the overhead power lines in the first place. Although the boom truck was involved, Corrosion Control's conduct no more arose from the use of the boom truck than did the defendants from the beverage truck in Tuttle. Corrosion Control was negligent, if at all, for failing to maintain a safe work place.
Justice Archer wrote that, under the plain language of the No-Fault Act:
"... the tortfeasor's conduct, upon which liability is predicated, must also arise from the use, maintenance, or operation of a motor vehicle in order for the tortfeasor's liability to be abolished and for the plaintiff to receive no-fault compensation under the tortfeasor's liability policy. Absent this causal link between the plaintiff’s injury and the tortfeasor's conduct, the no-fault act does not abrogate the tortfeasor's liability, and the plaintiff’s right to compensation, as against the tortfeasor, is determined only with regard to fault under common law tort principles."
Consequently, Justice Archer held that since Corrosion Control was negligent, if at all, under a landowner's liability claim and not from the use, ownership, or maintenance of the boom truck, Corrosion Control is a non-motorist defendant whose tort liability is beyond the scope of the No-Fault Act and Aetna's policy.
Justice Archer concluded that the Court of Appeals incorrectly decided that Corrosion Control "used" the boom truck thereby triggering the omnibus clause of Aetna's policy making Corrosion Control an insured. Under the facts of this case, it could not be concluded that Corrosion Control was legally responsible for the use of BLH's boom truck at the time of Naasko's injury.
In a separate concurring opinion by Justice Brickley, joined by Justice Griffin, Justice Brickley would have decided the case based upon interpretation of the omnibus clause of the contract, without creating "new law to resolve a contractual dispute." Justice Brickley stated that the analysis conducted in Tuttle is simply not necessary in this case.
In a separate concurring opinion by Justice Levin, joined by Justice Cavanagh, Justice Levin would have concluded that Corrosion Control was not an insured under Aetna's policy and Aetna was therefore not subject to liability.
