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Vanderkooy v Young, Enterprise Leasing Company of Detroit, and State Farm Mutual Insurance Company; (COA-UNP, 2/27/2007, RB #2863)


Michigan Court of Appeals; Docket #270980; Unpublished
Judges Kelly, Davis, and Servitto; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion courthouse image

Entitlement to Benefits for Out of State Accidents [3111]
Exception for Motorcycles Injuries [3114(5)]
12% Interest Penalty on Overdue Benefits – Nature and Scope [3142(2)]
Requirement That Benefits Were Overdue [3148(1)]
Requirement That Benefits Were Unreasonably Delayed or Denied [3148(1)]

Leased / Rented Vehicles

In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed summary disposition in favor of plaintiffs, finding that defendant Enterprise, as the insurer of the motor vehicle involved in an accident with a motorcycle in Tennessee, had priority for the injured person’s personal injury protection benefits.

The plaintiff in this case was riding a motorcycle in Tennessee when he was involved in a motor vehicle accident with a vehicle leased from defendant Enterprise which insured the vehicle through a self-funded policy. Plaintiff sued the driver for negligence and sought personal injury protection benefits from Enterprise. The trial court found Enterprise was liable for plaintiff’s PIP benefits and granted plaintiffs summary disposition. On appeal, Enterprise argued that it was not liable for PIP benefits under MCL 500.3111, which provides:

Personal protection insurance benefits are payable for accidental bodily injury suffered in an accident occurring out of this state, if the accident occurs within the United States, its territories and possessions or in Canada, and the person whose injury is the basis of the claim was at the time of the accident a named insured under a personal protection insurance policy, his spouse, a relative of either domiciled in the same household or an occupant of a vehicle involved in the accident whose owner or registrant was insured under a personal protection insurance policy or has provided security approved by the secretary of state under subsection (4) of section 3101.”

Enterprise argued that it is responsible for benefits only if plaintiff was the named insured under its no-fault policy. The Court of Appeals disagreed, explaining that Enterprise’s reliance on §3111 is misplaced, because that section only provides a basis for determining whether a person is entitled to PIP benefits. Instead, the court stated the priority of insurers for a person injured while riding a motorcycle is controlled by MCL 500.3114(5), which provides:

A person suffering accidental bodily injury arising from a motor vehicle accident which shows evidence of the involvement of a motor vehicle while an operator or passenger of a motorcycle shall claim personal protection insurance benefits from insurers in the following order of priority:

(a) The insurer of the owner or registrant of the motor vehicle involved in the accident.

(b) The insurer of the operator of the motor vehicle involved in the accident.

(c) The motor vehicle insurer of the operator of the motorcycle involved in the accident.

(d) The motor vehicle insurer of the owner or registrant of the motorcycle involved in the accident.”

Applying that statute, the court determined that because the plaintiff was injured while riding a motorcycle which was involved in an accident with a vehicle insured by Enterprise, Enterprise is liable for the person’s PIP benefits. In this regard, the court stated:

There is no dispute that plaintiff suffered injuries arising from an accident that occurred while he was the operator or passenger of a motorcycle, and which showed evidence of involvement of Young’s motor vehicle. The priority insurer, then, is the insurer of the owner or registrant of the motor vehicle involved in the accident. Here, that is Enterprise. The trial court thus correctly determined that Enterprise was the priority insurer for purposes of PIP benefits payable to plaintiff.”
(emphasis in original)

Further, the Court of Appeals determined that plaintiff was properly awarded attorney fees and interest under MCL 500.3142 and MCL 500.3148. It determined that penalty interest was properly awarded, because Enterprise’s refusal to pay was erroneous. It also determined that attorney fees were properly awarded, because a priority dispute is not a reasonable excuse for non-payment of benefits. In this regard, the court explained:

[A]n insurer will owe penalty interest under MCL 500.3142 if it refuses to pay benefits, its interpretation of a statute relied upon for its refusal is erroneous, and it is determined to be liable for the benefits. . . .  This is precisely the situation that occurred here. Penalty attorney fees, provided for at MCL 500.3148, are payable if the insurer unreasonably refused to pay a claim or unreasonably delayed in making proper payment. . . .  When benefits are overdue within the meaning of §3142(2), a rebuttable presumption of unreasonableness arises and the insurer has the burden to justify its refusal or delay in paying. Under settled case law, however, a priority dispute among no-fault insurers will not justify delay in paying a no-fault claim. . . .  Because the primary reason for Enterprise’s denial of benefits was a priority dispute, its denial of no-fault benefits was unreasonable and the trial court did not clearly err by awarding plaintiff attorney fees under MCL 500.3148(1).”

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

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