Michigan Court of Appeals; Docket No. 241171; Published
Judges Griffin, Neff, and Murray; Unanimous
Official Michigan Reporter Citation: 260 Mich. App. 662, Link to Opinion 
STATUTORY INDEXING:
Entitlement to PIP Benefits: Transportational Function Requirement [3105(1)]
TOPICAL INDEXING:
Private Contract (Meaning and Intent)
CASE SUMMARY:
In this unanimous published opinion by Judge Murray, the Court of Appeals held that Auto-Owners, the no-fault auto insurer for a school district, was responsible for insuring injuries sustained by two students kidnapped while being discharged from the insured’s school bus.
The injuries arose from an incident in which two elementary school-aged girls, ages 9 and 6, were dropped off at the wrong location and kidnapped and assaulted by three men. A civil action was filed against the employees of the school district for gross negligence in the “operation” of a motor vehicle, alleging that the bus driver drove the children to an ultimate destination that was not assigned or approved by the board of education, and allowed the kidnappers to enter the bus and remove the girls into their custody.
A dispute arose between the general commercial liability insurance company for the school district and Auto-Owners, the no-fault automobile insurer, as to whether or not Auto-Owners was obligated to defend and indemnify, with regard to claims for bodily injury arising out of the “ownership, maintenance or use” of the school bus. Auto-Owners argued that injuries from criminal acts are not covered by no-fault auto insurance because they do not meet the requirement of being “foreseeably identifiable with the normal use, maintenance and ownership of the vehicle.”
The Court of Appeals held that most courts find that injuries caused by assaults with dangerous weapons are not sufficiently related to the use of a motor vehicle for no-fault benefits under MCL 500.3105(1). That statute requires that the injury arise out of the use of the motor vehicle “as a motor vehicle.”
However, the court held that the fact this case involves an insurance policy for the use of school buses, as opposed to a case involving a no-fault policy or the no-fault statute with respect to a motor vehicle, is a critical distinction. The court held that under Pacific Employers Insurance Company v Michigan Mutual Insurance Company, 452 Mich 218; 549 NW2d 872 (1996), which focused on the specific language of the insurance policy, the courts are required to focus on the particular use of a school bus, i.e., to transport children to and from school while insuring that “the child reaches the predetermined bus stop under the supervision of the school bus driver.” The court here held that the undisputed facts caused the school bus driver’s conduct in disembarking the girls into the hands of strangers to fall within the definition of “use” under Auto-Owners’ policy as broadly interpreted in Pacific Employers. The policy defined use as:
“School bus means use of your automobile to transport school students and teachers:
(1) to and from school; and
(2) to and from school sponsored games and activities;
including incidental transportation of school officials, board members, doctors, nurses, parents, or guardians of school students and guests in connection with school activities. . . . School and church bus use include any operations necessary and incidental to such use and the care and maintenance of your automobile.
Therefore, the court held that Auto-Owners was liable under its automobile liability policy for defense costs and indemnity in the lawsuit arising from the incident.
