Michigan Court of Appeals; Docket #321328; Unpublished
Judges Markey, Murphy, and Stephens; (Judge Markey concurring in result only) (Judge Murphy concurring); Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion; Link to Markey Concurrence; Link to Murphy Concurrence 
STATUTORY INDEXING:
Disqualification for Nonresidents [§3113(c)]
Rights and Immunities Applicable to Nonresident Claimants and Foreign Insurers [§3163(3)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion (with Judge Markey and Judge Murphy concurring) involving an uninsured out-of-state claimant who was a passenger in a rental car driven by her boyfriend, the Court of Appeals held the claimant was entitled to PIP benefits under an Illinois policy issued to her boyfriend's parents, because the policy endorsement could not exclude coverage for an out-of-state accident simply because the vehicle involved was a rental car.
Plaintiff in this case, Yu Ju Chen, was a passenger in a rental car driven by her boyfriend, Jason Liao, when the car was in an accident on a Michigan highway. The accident left plaintiff paralyzed. Plaintiff and Liao were Illinois residents and the rental car was registered in Nebraska. Plaintiff did not have any insurance of her own. Liao was insured by defendant Farmers Insurance through a policy issued to his parents in Illinois. Plaintiff filed an action against Farmers, claiming it was liable for PIP benefits because it was Liao's insurer under the policy issued to Liao's parents. Both parties moved for summary disposition. Farmers claimed that under MCL 500.3113(c), plaintiff was not its insured and was not entitled to benefits. Alternatively, Farmers argued that if it was found responsible, its losses should be capped at $500,000 under MCL 500.3163(4). Plaintiff argued that §3113(c) should be read in harmony with MCL §3163(3) to provide that "3163(3) grants coverage where there is an individual that is 'insured' under an out-of-state policy, and 3113(c) excludes coverage where there is no individual 'insured' under the out-of-state policy." Plaintiff argued against a benefit cap of $500,000, contending that §3163(4) applied to an insured and not a claimant. The trial court denied Farmers' motion for summary disposition, and granted in part and denied in part plaintiff's summary disposition motion. The trial court found that plaintiff was an insured under Farmers' policy, but that the losses were capped at $500,000.
The Court of Appeals held that plaintiff was entitled to PIP benefits under the policy issued by Farmers to Liao's parents. In so holding, the Court noted that §3113(c) provides an exclusion from PIP benefits if three conditions are met: 1) the claimant was not a resident of Michigan; 2) the claimant was an occupant in a vehicle not registered in Michigan; and 3) the claimant was not insured by an insurer that has filed a §3163 certification.
According to the Court of Appeals, the first two conditions were clearly met in this case and the third condition was in dispute. In this regard, the Court noted that Farmers admitted it filed a certificate under §3163, availing itself of Michigan's no-fault system, but denied it was liable for PIP benefits, claiming it was not Chen's insurer under the policy and the vehicle was not covered.
Addressing Farmers' argument, the Court focused on the interplay between §3113(c) and §3163(3):
"Upon initial read, MCL 500.3113(c) and MCL 500.3163(3) appear to be in conflict where 3113(c) entitles only an 'insured by an insurer' to PIP benefits and 3163(3) entitles both an insured and 'insurance claimants' to the same benefits. Defendant would have us decline to afford Chen PIP benefits because she was not 'insured by an insurer.' It would also have this Court find that Chen's status as an insurance claimant is irrelevant to access PIP benefits. We disagree. ... The Legislature included two classes of persons entitled to PIP benefits in MCL 500.3163: insureds and insurance claimants. Because the language in MCL 500.3163 is clear and unambiguous, judicial construction is neither required nor permitted, and we must apply the statute as written."
The Court of Appeals continued by noting the following:
1) the parties agreed that Chen did not have any insurance of her own, nor did she have a family member under whose insurance policy she could obtain coverage;
2) the parties agreed that Chen's accident occurred in a rental vehicle insured by its owner, The Hertz Corporation;
3) the parties did not dispute the fact that the rental vehicle was registered in Nebraska and was not required to be registered in Michigan; and
4) there was no evidence that The Hertz Corporation filed a certificate under §3163 subjecting itself to the Michigan no-fault system.
Based on the foregoing and pursuant to MCL 500.3114(4)(a), the Court of Appeals said Chen could not claim PIP benefits from The Hertz Corporation, as the insurer of the owner or registrant of the vehicle that was occupied.
Next, the Court of Appeals found unpersuasive Farmers' claim that it was not liable for benefits because the vehicle was rented. Looking to the language of the policy, the Court said the fact that a rental car was involved made no difference under §3114(4)(b) and that, under §3163, Farmers was responsible for any accidental bodily injury due to its nonresident insured's operation of a vehicle. According to the Court, the policy endorsement could not exclude coverage of an accident that an insured was involved in out-of-state, merely because the vehicle involved was a rental car.
Regarding Farmers' argument that benefits should be capped at $500,000, the Court of Appeals agreed. The Court held that damages were limited by §3163(4), and that Farmers assumed the risk of loss for which its insured was liable, as well as liability for the medical expenses for any other person occupying the vehicle.
In conclusion, the Court of Appeals applied penalty interest under MCL 500.3142 because the benefits were overdue. According to the Court:
"We agree that, because the benefits to be paid in this case were limited to $500,000, the 12% per annum interest should be calculated on that amount and not the $691,901.55 amount originally submitted with plaintiffs' proof of loss."
In a separate concurring opinion, Judge Murphy said that, while he agreed the trial court's ruling should be affirmed, he would "analyze the case differently."
Judge Markey concurred in the result only.
