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Spectrum Health Hospitals v Farm Bureau; (COA-UNP, 2/24/2011; RB #3160)

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Michigan Court of Appeals; Docket #296976; Unpublished 
Judges Owens, Markey, and Meter; unanimous: per curiam 
Official Michigan Reporter Citation:  Not applicable, Link to Opinion alt
The Michigan Supreme Court reversed the Court of Appeals decision on 7/31/12;  Link to Opinioncourthouse graphic


STATUTORY INDEXING: 
Disqualification for Unlawful Taking and Use of a Vehicle [§3113(a)] 
Bona Fide Factual Uncertainty / Statutory Construction Defense [§3148] 

TOPICAL INDEXING: 
Not Applicable


CASE SUMMARY: 
In this unanimous unpublished per curiam opinion, the Court of Appeals held that the provisions of MCL 500.3113(a) did not exclude the plaintiff from receiving PIP benefits because, in this situation, there was no evidence that there had been an unlawful taking of the vehicle involved in the accident within the meaning of MCL 500.3113(a). 

Craig Smith, Jr. was injured while driving a Ford Explorer owned by his father, Craig Smith, Sr. Craig Smith, Jr. was intoxicated and had no valid license at the time of the accident. His vehicle struck a tree causing injuries which were treated at plaintiff Spectrum Health Hospitals. Spectrum brought this action to collect its unpaid bill.

Plaintiff filed a motion for summary disposition arguing that Craig Sr. had given permission to Craig Jr.’s girlfriend to drive the Explorer and that she subsequently gave permission to Craig Jr. to drive that vehicle at the time of the accident. Farm Bureau argued that Craig Jr. knew that his father did not want him to drive the vehicle and therefore there was an unlawful taking of the vehicle within the meaning of MCL 500.3113(a) which states that

“[a] person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident any of the following circumstances existed:

(a) The person was using a motor vehicle or motorcycle which he or she had taken unlawfully, unless the person reasonably believed that he or she was entitled to take and use the vehicle.”

The trial court in granting summary disposition in favor of Spectrum relied on Cowan v Strecker, 394 Mich 110 (1975). In rejecting Farm Bureau’s contention in this case, that Craig Jr. could not have reasonably believed that he was entitled to take or use the vehicle, the Court of Appeals also relied on language from Cowan:

“when an owner willingly surrenders control of his vehicle to others he ‘consents’ to assumption of the risks attendant upon his surrender of control regardless of admonitions which would purport to delimit his consent.”

Citing from Bronson Methodist Hosp v Forshee, 198 Mich App 617 (1993), the Court of Appeals stated:

“the implication in Cowan is that, when an owner loans his vehicle to another, it is foreseeable that the borrower may thereafter lend the vehicle to a third party and such further borrowing of the vehicle by the third party is, by implication, with the consent of the owner. … As noted in Cowan, the mere fact that the borrower violates the restrictions placed on him by the owner does not negate the fact that the subsequent taking by a third party is, by implication, with the owner’s consent.”

Based upon Cowan and Bronson, the Court of Appeals held that there was no unlawful taking of the vehicle owned by Craig Smith, Sr., and therefore no reason to engage in an analysis of the “reasonably believed that he or she was entitled to take and use” language of MCL 500.3113(a).

The Court of Appeals also addressed plaintiff’s contention that the trial court should have awarded attorney fees under MCL 500.3148(1). In denying this request, the Court of Appeals held that the issue was one for review under the “abuse of discretion” standard. The trial court denied the request for attorney fees because there was a legitimate question of statutory construction. The Court of Appeals upheld the trial court ruling stating that one could characterize as legitimate defendants’ argument that there was an unlawful taking based on Craig Jr.’s intoxication and lack of a valid license.


Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit SinasDramis.com.

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