Michigan Court of Appeals; Docket No. 113942; Unpublished
Judges Michael J. Kelly, Sullivan, and G.S. Allen; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
General Rule of Priority [§3114(1)]
TOPICAL INDEXING:
Leased / Rented Vehicles
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals decided a priority dispute as between the insurer for the owner and driver of a tractor-trailer, and the insurance company for his former employer under a lease agreement.
Plaintiff Coy, a truck driver, was the registered owner of a semi-tractor-trailer which he insured through Prestige Casualty Company. Prior to the accident, plaintiff entered into a lease agreement with Top Line Trucking Company, whereby he leased his tractor-trailer to Top Line and hauled loads for that company. The lease was subject to the rules and regulations of the Interstate Commerce Commission. Prior to the accident, plaintiff orally terminated the lease agreement Top Line Trucking Company confirmed this termination by letter. However, plaintiff failed to return the lease agreement as requested by Top Line, and failed to remove Top Line's ICC placards from the tractor-trailer. Prestige alleged that the failure to return the lease and remove the placards violated ICC rules and regulations and consequently, the lease agreement was not properly terminated. Because the lease agreement was in effect Prestige contended that Top Line was deemed to be both the owner of the tractor-trailer and plaintiffs employer as of the date of the accident.
Plaintiff was in fact driving the truck pursuant to a trip-lease agreement with another company on the day of the accident.
Pursuant to an exclusion in its policy, Prestige contended that its insurance did not apply to a truck "hired or borrowed" by any trucker if the trucker had Michigan no-fault insurance. Prestige argued that since the lease agreement was still in effect at the time of the accident the tractor-trailer was "hired or borrowed" by Top Line.
In rejecting this argument and reversing the trial court conclusion, the Court of Appeals held that failure to terminate me lease agreement in accordance with the ICC regulations does not preclude a finding that the tractor-trailer was neither hired nor borrowed by Top Line at the time of the accident in this case. At the time of the accident, Plaintiff had not worked for Top Line for a couple of months. The letter from Top Line showed that both parties considered their relationship as having ended. Therefore, notwithstanding the fact that the lease agreement might not have been technically terminated under the ICC regulations, the court found that plaintiffs tractor-trailer was not hired by Top Line at the time of the accident. Therefore, if plaintiffs claim otherwise falls under the language of the insurance contract, then Prestige is liable for no-fault benefits under the priority provision of §3114(1).
