Michigan Court of Appeals; Docket No. 85329; Published
Judges Kelley, Shepherd, and Simon; Unanimous; Per Curiam
Official Michigan Reporter Citation: 152 Mich App 817; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Casualty Insurance Policies – Minimum Coverages and Required Provisions (MCL 500.3009)
CASE SUMMARY:
In this unanimous Opinion by Judge Simon, with Judge Shepherd concurring in the result only, the Court of Appeals affirmed summary judgment in favor of the defendant on the question of a named driver exclusion contained in defendant's insurance policy.
The undisputed facts involved an accident occurring in 1981, when plaintiff was injured by the alleged negligence of the owner and operator of a pick-up truck. At the time of the accident, the truck was insured under a policy issued by defendant (AAA) to the driver's mother. The policy listed the mother as the named insured and principal driver and specifically excluded her son as an insured.
After bringing suit against the driver for the injuries sustained in the accident, defense of the lawsuit was tendered to AAA, which refused to defend on the grounds of the express driver exclusion contained in its policy. A default judgment was entered against the driver, and plaintiff then instituted a declaratory judgment action seeking to have the "named driver exclusion" found invalid in the instance where the named driver is also the owner of the vehicle. Plaintiff claimed in her action that it is against public policy to allow the vehicle owner to be named as an excluded driver on an insurance policy.
Citing the case of Allstate Insurance Company v DAIIE, 142 Mich App 436; 369 NW2d 908 (1985), the Court held that the named driver exclusion provided for in MCLA 500.3009(2); MSA 24.13009(2) may properly be applied to the owner of a motor vehicle. The Court held that plaintiff’s public policy arguments had previously been addressed in DAIIE v Commissioner of Insurance (Item No. 127), and that the Court of Appeals had found that the Legislature had balanced other countervailing public policy considerations in favor of allowing driver exclusions. Further, the Court held that requiring that owners not be permitted to be "named excluded driver on insurance policies" would not solve plaintiff’s public policy considerations because the excluded driver herein could have easily transferred the car to his mother's name so that she could have obtained a policy excluding him, and such an exclusion would have been valid.
In his strongly worded concurring opinion, Judge Shepherd noted that this "state of affairs allows fraud to be perpetrated upon the people of this State by incompetent drivers in wholesale quantities. An uninsurable driver (i.e. a menace on the highways) can purchase a motor vehicle and arrange to have someone else who seldom, if ever, drives it place the insurance in his or her own name. The net result is that the owner/driver can proceed to endanger the public with impunity while the public is without the complete protection of the law." Nevertheless, Judge Shepherd concluded that this result is either what the Legislature intended or the result was unintended because the consequences were simply not anticipated or contemplated.
Judge Shepherd noted that the Supreme Court was never given the opportunity to address the public policy issue raised by plaintiff because an application for leave to appeal was never filed in Allstate (supra), a case involving two insurance companies. The result, according to Judge Shepherd, is to allow insurance companies to "deliberately close their eyes to reality and forces the rest of us to drive on the highways under the illusion that the law has taken every precaution to force owners of automobiles not to drive without insurance.”
