Michigan Court of Appeals; Docket No. 297891; Unpublished
Judges Talbot, Donofrio, and Servitto; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not applicable; Link to Opinion 
STATUTORY INDEXING:
General Rule of Priority [§3114(1)]
Equal Priority Situations [§3114(6)]
Compulsory Insurance Requirements for Owners or Registrants of Motor Vehicles Required to be Registered [§3101(1)]
Recoupment Between Equal Priority Insurers [§3115(2)]
Reasonable Proof Requirement [§3142(2)]
Bona Fide Factual Uncertainty/Statutory Construction Defense [§3148]
Calculating Attorney Fees Not Based on Contingent Fee [§3148]
TOPICAL INDEXING:
Legislative Purpose and Intent
Reformation of Insurance Contracts
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Michigan Court of Appeals reversed the grant of summary disposition in favor of Daimler Chrysler Insurance Company (DCIC) and determined that DCIC had equal priority for payment of the plaintiff’s PIP no-fault benefits with Allstate with respect to providing PIP benefits to plaintiff Mason where the DCIC insurance policy was determined to be void because it improperly attempted to shift its statutory responsibility for its share of the injured person’s PIP benefits. The Court of Appeals reformed the policy and found that DCIC was responsible for a portion of the PIP benefits due.
Robert Mason was driving an automobile that was owned by his employer, Chrysler, LLC, when he was rear-ended by another vehicle in 2007. Mason was leasing the vehicle from Chrysler through a program whereby eligible Chrysler employees and retirees may lease a Chrysler vehicle directly from Chrysler, and the payment for the vehicle is deducted from the employee’s paycheck or retiree’s pension check. The vehicle remains titled and registered to Chrysler, which also maintains a policy of insurance on the vehicle issued through DCIC.
Mason sustained injuries in the accident and made a claim for PIP benefits. At the time of the accident, Mason also had a no-fault insurance policy through Allstate Insurance on another vehicle he owned. Allstate claimed it was not the first insurer in order of priority under §3114(1) and asserted that DCIC was responsible for payment of the plaintiff’s PIP benefits. The trial court granted summary disposition in favor of DCIC and held that Allstate was responsible for the PIP benefits. The trial court also awarded penalty interest and attorney fees.
On appeal, the Court of Appeals determined that the DCIC policy failed to comply with the Michigan No-Fault Act and should be reformed to comport with §3101(1) of the Act. The court held that because the plaintiff leased the vehicle from Chrysler, his employer, for a period longer than 30 days, under MCL 500.3101(2)(h), Mason was considered to be an “owner” of the vehicle for purposes of §3101(1) of the Act. As such, Mason was required to obtain security for the vehicle under the statute. Since payment for the DCIC insurance policy on the vehicle was bundled into Mason’s monthly lease payment, the court held he was deemed to have paid for the security required by §3101. However, the court accepted Allstate’s contention that the DCIC policy violated Michigan no-fault law because it allowed DCIC to shift its liability for PIP payments for injuries arising out of accidents involving vehicles it ostensibly insures. The court reasoned that DCIC shifted its responsibility by naming itself as the “named insured” under the policy, reasoning that a corporation can never suffer bodily injury and, therefore, cannot obtain first-party benefits. Further, the policy contained an exclusion stating that it would not pay personal injury protection benefits for “bodily injury” to anyone entitled to Michigan no-fault benefits as a named insured under another policy.
In reversing the trial court determination in favor of DCIC, the court referred to the published decision in Corwin v Daimler Chrysler Ins Co, 296 Mich App 242 (2012), which found that the exact same DCIC policy was in violation of the legislative intent of the No-Fault Act and required reformation treating Mason as a named insured. Since plaintiff Mason was, therefore, deemed to be a “named insured” in the DCIC policy as well as the Allstate policy, the two insurers were deemed to be of equal priority responsible for paying a share of the PIP benefits, pursuant to §3114(6). Since Allstate had paid part of the benefits, it was entitled to recoupment of a portion of those benefits under §3115(2).
The court also addressed an issue relating to the requirement of reasonable proof of loss with respect to plaintiff’s claim for replacement services. Plaintiff kept a log of services performed for a period of time, but after Allstate discontinued benefits, the log was no longer kept. However, plaintiff testified that the services performed continued, consistent with the previously kept log, generally on a daily basis. The Court of Appeals found this evidence to be sufficient proof of the fact and the amount of the loss, and it was not required that there be “specific proof of every hour of every day for replacement services.”
The Court of Appeals also reviewed the determination of the trial court to award actual attorney fees pursuant to §3148 of the No-Fault Act. The court found that the hourly rate of $350 established by the trial court represented an “upward departure” from the median hourly billing rate for Oakland County, which is $200-$205 per hour. The court stated that Allstate properly challenged the rate charged as unreasonable and, therefore, an evidentiary hearing should have been held to allow Allstate to challenge the hourly rate and present any countervailing evidence pursuant to the procedures outlined in Smith v Khouri, 481 Mich 519 (2008).
