Michigan Court of Appeals; Docket #295311; Unpublished
Judges Murphy, Stephens, and M.J. Kelly; unanimous: per curiam
Official Michigan Reporter Citation: Not Applicable, Link to Opinion 
STATUTORY INDEXING:
Compulsory Insurance Requirements for Owners or Registrants of Motor Vehicles Required to Be Registered [§3101(1)]
Exclusion for Vehicles Considered Parked [§3106(1)]
Exception for Occupying [§3106(1)(c)]
PIP Insurer’s Right to Reimbursement for Claims Paid Arising out of Uninsured Vehicle Injuries [§3177(1)]
TOPICAL INDEXING:
Insurer Uninsured Motorist Reimbursement
CASE SUMMARY:
In this unanimous, unpublished per curiam opinion, the Court of Appeals upheld the trial court determination that Farmers was not entitled to reimbursement under the provisions of MCL 500.3177(1) for PIP benefits paid to a person who was injured while sleeping in an uninsured parked vehicle owned by defendant Thomas.
The injury in this case occurred when Thomas drove her sister to a party in Thomas’ uninsured motor vehicle. Thomas’ sister left the party and sat in Thomas’ parked vehicle where she then fell asleep. While she was asleep, an unknown driver struck Thomas’ parked car seriously injuring her sister and resulting in a claim being made through the Assigned Claims Facility for personal injury protection benefits. Farmers was assigned the claim and paid over $160,000 in benefits.
Farmers sued Thomas seeking reimbursement under the provisions of MCL 500.3177(1), which permits reimbursement from the “owner or registrant of an uninsured car that was involved in the accident giving rise to the insurer’s obligation to pay.”
In response, Thomas argued that the car was not required to have insurance because it was not being used as a motor vehicle at the time of the accident, and also because it was not required to be insured at the time that it was parked because it was not being “driven or moved upon a highway” as the compulsory insurance language of MCL 500.3101 would require.
The trial court determined that Thomas’ vehicle was not required to be insured at the time of the accident because it was parked and further because it was not being used as a motor vehicle at the time of the accident.
The trial court also ordered attorney fee sanctions pursuant to the offer of judgment rule based upon an offer of judgment that had been made on behalf of Thomas and to which the insurance company did not respond.
In upholding the trial court ruling with regard to the obligation to reimburse Farmers, the Court of Appeals held that the language of §3177 triggers the obligation for reimbursement where the accidental bodily injury to a person arises out of the “ownership, maintenance, or use of an uninsured motor vehicle as a motor vehicle.” However, in situations where the uninsured vehicle is not involved in the accident “as a motor vehicle,” the owner will not be liable for reimbursement under §3177(1). The Court relied upon Elbode v Allstate Ins Co, 147 Mich App 390 (1985) in support of its holding. The Court of Appeals in the instant case further noted without comment that in Elbode, supra, the Court had summarily rejected the plaintiff’s argument that his car did not have to be insured under the no-fault act because at the time of the accident it was not being driven or moved upon a highway.
In its ruling in the instant case, the Court of Appeals stated that the question was whether the Thomas car was involved in the accident “as a motor vehicle.” The Court pointed out that a substantially similar phrase appears in multiple places throughout the no-fault act, and has been interpreted to mean that use of a motor vehicle must be “closely related to the transportational function and only when engaged in that function.” McKenzie v ACIA, 458 Mich 214 (1998).
In response to Farmers’ argument that the parked vehicle provisions of MCL 500.3106 support the conclusion that reimbursement is permitted, the Court held that the language of that statute did not alone support Farmers’ claim for reimbursement.
Section 3106 provides:
Accidental bodily injury does not arise out of the ownership, operation, maintenance, or use of a parked vehicle as a motor vehicle unless any of the following occur:
(c) Except as provided in subsection (2), the injury was sustained by a person while occupying, entering into, or alighting from the vehicle.
In response to Farmers’ argument that because Thomas’ sister was “occupying” the parked vehicle, the injury arose out of the use of the parked vehicle as a motor vehicle, the Court of Appeals stated that §3106 is only a threshold requirement for concluding that accidental bodily injury arose out of the use of a parked vehicle as a motor vehicle. The Court of Appeals stated that §3106 does not define when a parked vehicle is being used as a motor vehicle but, rather, defines when an injury may arise out of the use of a parked vehicle as a motor vehicle. It is still necessary to determine whether the vehicle’s use in this case, was “closely related to its transportational function and only when engaged in that function.”
The Court of Appeals held that Thomas’ vehicle was merely the scene of the hit-and-run accident that caused Thomas’ sister’s injuries, and there was no connection between the transportational function of defendant’s vehicle and the injuries. Therefore, the trial court determination denying reimbursement to Farmers was affirmed.
The Court of Appeals also addressed the issue of entitlement to sanctions under the offer of judgment rule, MCR 2.405(D)(3). Thomas’ attorney had filed an offer of judgment for $100 in response to Farmers’ lawsuit. Farmers did not respond to the offer, and after the trial court determined that Farmers was not entitled to reimbursement, the trial court ordered attorney fees to be paid. On appeal, the Court of Appeals rejected Farmers’ argument that a novel legal issue precluded entry of an award of actual attorney fees. The Court of Appeals held that although the factual scenario was novel, the legal issue was not, and the trial court was correct in ordering attorney fees. However, the Court ordered the matter remanded to the trial court for further consideration of the amount of attorney fees awarded requiring that the trial court make factual determinations regarding the fee customarily charged for similar services and regarding hours worked by the attorney.
