Michigan Court of Appeals; Docket # 322072; Published
Judges M.J. Kelly, Murray, and Shapiro; Unanimous; Per Curiam
Official Michigan Reporter Citation: 313 Mich App 94 (2015); Link to Opinion 
On 5/25/2016, the Michigan Supreme Court denied the application for leave to appeal; Link to Order
STATUTORY INDEXING:
Deletion of Mandatory Coverages for Stored Vehicles [§3101(1)]
Property Protection Insurance (PPI) Benefits [§3121]
Priority Rules for Payment of PPI Benefit [§3125]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous published per curiam Opinion involving MEEMIC Insurance Company’s subrogation claim for property damage loss incurred in connection with a fire caused by a motor vehicle insured by Home-Owners, the Court of Appeals held that MEEMIC was not entitled to reimbursement from Home-Owners because the vehicle that caught fire was not being driven on the highway and, therefore, was not covered for purposes of PPI under the Home-Owners policy.
This case arises out of stored 1966 Corvette that caught fire and caused damage to plaintiffs’ nearby property in the same storage facility as the vehicle. MEEMIC was the insurer of the property that was damaged and paid the claims. MEEMIC then sought to subrogate its losses against: 1) the individuals who caused the fire while working on the Corvette and their no-fault insurers, Michigan Millers and Auto-Owners; 2) Putvin, who owned the stored Corvette, which Putvin did not drive on the highway and for which Putvin had purchased comprehensive coverage for through State Farm; and 3) Home-Owners, which had issued a no-fault policy to Putvin for his personal vehicles that he drove on the highway. MEEMIC claimed, given that Putvin was the owner of the Corvette, Home-Owners was liable for PPI benefits pursuant to MCL 500.3121 and MCL 500.3125, even though Home-Owners did not insure the Corvette. Home-Owners moved for summary disposition, arguing the policy language excluded the Corvette from coverage and, therefore, it was not liable for the damage that was caused. The trial court granted Home-Owners’ motion for summary disposition and dismissed MEEMIC’s claim. On appeal, the Court of Appeals addressed whether the no-fault policy issued by Home-Owners provided PPI coverage for the Corvette.
The Court of Appeals first found that PPI coverage could be excluded for a vehicle that is not driven on the highway. In this regard, the court said:
“[C]onstruing MCL 500.3125 in harmony with MCL 500.3101(1), we conclude that an insurer of an owner of a motor vehicle involved in an accident is not statutorily required to pay property protection insurance benefits to a person suffering accidental property damage where the motor vehicle involved in the accident was not driven or moved upon a highway and the owner or registrant elected to forego that coverage in favor of comprehensive coverage, as permitted under MCL 500.3101(1). Because the coverage is optional in such cases, whether the policy provides coverage must be determined from the policy itself.”
After determining that PPI coverage was optional for a vehicle not driven on the highway, the Court of Appeals noted that the policy language controls. The court explained:
“Because the coverage is optional in such cases, whether the policy provides coverage must be determined from the policy itself. See Husted v Auto-Owners Ins Co, 459 Mich 500, 511-512; 591 NW2d 642 (1999) (stating that, where coverage is not mandatory under the no-fault act, the terms of the insurance agreement control whether there is coverage).”
After evaluating the language of the Home-Owners policy, the Court of Appeals held that PPI benefits were unavailable through the policy. In so finding, the court said:
“In this case, it is undisputed that the Corvette had not been driven or moved upon a highway during the relevant period. Consequently, … Putvin was not required to maintain security for the payment of benefits under MCL 500.3101(1), and, because he purchased a policy from State Farm insuring the Corvette with comprehensive coverage, Home-Owners could lawfully exclude the Corvette from coverage under the no-fault policy that it issued to him.”
Accordingly, the Court of Appeals held that Home-Owners was not obligated to pay PPI benefits, because Putvin did not drive the Corvette on the highway and had elected to insure it with a policy that provided comprehensive coverage alone.
In conclusion, the Court of Appeals ruled that Home-Owners’ motion for summary disposition was properly granted.
