Michigan Court of Appeals; Docket No. 316142; Unpublished
Judges Riordan, Cavanagh and Talbot; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Exception for Commercial Vehicles [§3114(2)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals held that the plaintiff’s personal insurer was primarily responsible for paying plaintiff’s claim for no-fault benefits even though the plaintiff was occupying a vehicle owned by an auto dealer at the time of the accident, because the primary use of the accident vehicle was to be displayed for sale and was not designated for use in transporting customers.
The plaintiff in this case was injured while occupying a car that was owned by an auto dealership. At the time of the accident, the plaintiff was being driven to work by an employee of the dealership. Following the accident, the plaintiff sought to recover no-fault benefits. The vehicle that the plaintiff was occupying was insured by Defendant Travelers, and the plaintiff’s personal automobiles were insured by Defendant Starr Indemnity. Each of these insurers disputed that they were the priority insurer under the provisions set forth in MCL 500.3114. The Court of Appeals held that Starr Indemnity was the insurer of higher priority despite the fact that the accident vehicle was being operated in connection with a business at the time of the accident.
In reaching this conclusion, the Court noted that generally, “an injured person is required to seek compensation from his own no-fault insurer, regardless of whether that person’s insured vehicle is involved in the accident.” The Court then noted that this general rule was subject to some exceptions, and that a person who is injured “while an operator or passenger of a motor vehicle operated in the business of transporting passengers, shall receive [PIP] benefits. . . from the insurer of the motor vehicle.” The Court then clarified that determining whether this exception is applicable, requires the application of a two part test. In this regard, the Court explained:
This Court applies “a primary purpose/incidental nature test . . . to determine whether at the time of an accident a motor vehicle was operated in the business of transporting passengers pursuant to subsection 3114(2).” The application of this test involves a two-part analysis: (1) whether the vehicle was transporting passengers in a manner incidental to the vehicle’s primary use; and (2) whether the transportation of the passengers was an incidental or small part of the actual business in question.
After applying this two-part test, the Court held that the exception for motor vehicles operated in the business of transporting passengers does not apply under these circumstances. The Court reasoned:
Under the first prong of the test, the evidence shows that the primary use of the vehicle in this case was to be displayed for sale. Neither the vehicle in question, nor any other vehicle at the dealership, was designated for use in transporting customers. The fact that only approximately 25% of the dealership’s business is gained from customers being transported to the dealership further supports that the transportation use of the vehicle was merely incidental to its primary use of being on display for sale. Under the second prong of the test, the evidence shows that the use of the vehicle in this case for transportation was an incidental and relatively small part of the dealership’s business. Again, only 25% of the dealership’s customers required transportation services to the dealership. While there is no percentage requirement for this prong to be met, 25% is a relatively small part of the dealership’s total business. The fact that there was no assigned vehicle for transporting customers is also indicative of the minor significance of the transportation service to the primary business. Accordingly, the facts establish that transportation was not an integral part of the dealership's business.
The Court therefore concluded that Starr Indemnity is primarily liable for the plaintiff’s no-fault benefits under the priority provisions contained in MCL 500.3114(2).
