Michigan Court of Appeals; Docket #318912; Unpublished
Judges Servitto, Stephens, and M.J. Kelly; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Resident Relatives [§3114(1)]
Exception for Motorcycle Injuries [§3114(5)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion involving a priority dispute between Auto Club Insurance and Auto-Owners over PIP benefits for a motorcyclist struck by a motor vehicle, the Court of Appeals held the motorcyclist’s father’s insurer (Auto Club) was obligated to pay benefits under MCL 500.3114, because Auto-Owners did not insure the striking driver’s vehicle, nor the striking driver.
Plaintiff was injured when a Crown Victoria driven by Bryant Lee collided with his motorcycle. Plaintiff resided with his parents and his father had a no-fault policy with defendant Auto Club (ACIA). Bryant was the owner and registrant of the Crown Victoria that struck plaintiff, but he did not maintain insurance on it. Bryant resided with his father, Odell Lee, who had a no-fault policy with defendant Auto-Owners. Plaintiff brought this action for benefits against ACIA and Auto-Owners. The trial court denied Auto-Owners’ motion for summary disposition and granted summary disposition for ACIA, finding that Auto-Owners was first in priority for PIP benefits.
The Court of Appeals reversed the trial court’s ruling, pointing out that Bryant was not a “named insured” on his father’s (Odell’s) policy. However, the court also noted that:
“… it is not necessary for an owner, registrant, or operator of a vehicle to be listed as a ‘named insured’ in order to be covered by an insurance policy if the other terms of the policy indicate that the individual is ‘insured.’ …
In light of this, the Court of Appeals examined the other terms in Odell’s policy to determine whether Auto-Owners was Bryant’s “insurer” for purposes of §3114(5). In this regard, ACIA asserted that Bryant was insured under the definition of “relative” in the policy’s endorsement, which said: “14. ‘Relative means: a. The named insured’s spouse; and b. Any other person who resides with and is related to the named insured by blood, marriage, or adoption. Relative includes a ward or foster child who resides with the named insured.’”
The Court of Appeals rejected ACIA’s argument and said:
“[D]espite the inclusion of this definition [of relative], the endorsement does not include any language indicating that a relative, as defined in the policy, is ‘insured’ under the policy. Likewise, contrary to the trial court’s reasoning, it appears that the mere inclusion of this definition is insufficient to demonstrate that Odell and Auto-Owners intended to render Bryant a contractual ‘insured’ under the policy. … Furthermore, the ‘coverage’ section under ‘Section II – Personal Injury Protection’ also includes no indication that a resident relative is an ‘insured’ under the policy. … Likewise, … the reference to the no-fault act in the coverage section of the endorsement does not, on its own, demonstrate that Auto-Owners is the ‘insurer’ of Bryant. Under MCL 500.3114(1), an injured resident relative of a person named in an insurance policy is entitled to receive PIP benefits under that policy except as provided in the statute; MCL 500.3114(1) does not provide that the insurance provider is automatically the ‘insurer’ of a resident relative with respect to third parties when the resident relative is not injured. … Thus, given that this Court may not ‘hold an insurance company liable for a risk that it did not assume,’ … the language of the policy indicates that Bryant was not a contractual insured under the no-fault endorsement.”
The Court of Appeals further held that the language of the policy’s general insuring agreement evidenced that Odell and Auto-Owners did not intend to include Bryant as an insured. The court said:
“[I]t is clear that the general coverage applied to damages for which Odell became legally responsible on Bryant’s behalf as long as Bryant was using one of Odell’s automobiles, as described in the declarations, which was not the case here. … As a result, ACIA, as the ‘insurer of the operator of the motorcycle involved in the accident,’ is first in priority for the payment of plaintiff’s PIP benefits pursuant to MCL 500.3114(5)(c).”
The Court of Appeals also rejected ACIA’s claim that Bryant was an insured because the Auto-Owners policy “incorporated by reference” §3114(1). In this regard, the court said:
“ACIA has erroneously expanded the principle that an injured individual’s ‘own insurer’ includes the insurance company that provides no-fault coverage in his household, mistakenly concluding that the insurer of the person named in the policy is also the ‘insurer’ of the relative domiciled in the household in all situations, even when the relative is not injured.”
Based on the foregoing conclusions, the Court of Appeals held the trial court erroneously denied Auto-Owners’ motion for summary disposition and improperly granted summary disposition for ACIA.
