Michigan Court of Appeals; Docket No. 236657; Published
Judges Bandstra, Zahra, and Meter; unanimous
Official Michigan Reporter Citation: 256 Mich. App. 541, Link to Opinion 
STATUTORY INDEXING:
Nature and Scope of PPI Benefits (Property Damage and Loss of Use) [3121(1)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous published opinion by Judge Meter, the Court of Appeals held that a no-fault insurer was responsible for coverage for property damage under MCL 500.3121(1) of the No-Fault Act in a case where a vehicle located on the premises of a car dealership awaiting repairs, caught fire and damaged the dealership.
The dispute concerned interpretation of 3121(1) which provides:
“Under property protection insurance, an insurer is liable to pay benefits for accidental damage to tangible property arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle, subject to the provisions of this section and sections 3123, 3125, and 3127. However, accidental damage to tangible property does not include accidental damage to tangible property, other than the insured motor vehicle, that occurs within the course of a business of repairing, servicing, or otherwise maintaining motor vehicles.”
The vehicle was involved in an accident and had been taken to an automobile dealership for repair. While awaiting necessary parts for the repair, the vehicle was placed in a storage location. Both parties concede that the fire resulted from a wire problem unrelated to the repair work.
Universal Underwriters paid for the property damage to the dealership, and sought reimbursement from Auto-Owners, the insurer of the automobile. Auto-Owners argued that the second sentence of the statute barred recovery from it, because the fire occurred within the course of the dealership. The trial court agreed with Universal Underwriters, finding that the fire had occurred for reasons completely unrelated to the work being performed on the vehicle and, therefore, concluding there was not a causal connection between the maintenance work and the property.
In reversing the trial court decision, the Court of Appeals held that the plain language of the statute barred recovery from Auto-Owners, because the accidental damage to the dealership property occurred within the course of the dealership business. The court stated that the statute is clear and unambiguous and does not require a causal connection between the maintenance work and the property damage. The statute states that damage occurring “within the course of a business” that involves repairing, servicing, or otherwise maintaining automobiles is excluded from coverage. Here, storing a vehicle pending the arrival of parts, constituted part of the dealership’s “course of business” and, therefore, coverage under the Auto-Owners’ policy was precluded.
