Michigan Court of Appeals; Docket #300573; Unpublished
Judges P. J. Wilder, Talbot, and Servitto; unanimous: per curiam
Official Michigan Reporter Citation: Not Applicable, Link to Opinion
In this unanimous unpublished per curiam Opinion, the Court of Appeals dealt with a PIP priority dispute involving two insurance companies and the question of whether the injured claimant for PIP benefits was an employee of the owner of the vehicle, within the meaning of MCL 500.3114(3), making the insurer of that vehicle responsible for payment of the benefits.
Nancy Clement was a care giver for Nancy Denman at the time that the two of them were involved in an automobile accident in 2008. Clement was driving Denman's vehicle when they were struck by an uninsured driver. Auto Club was the insurer for Denman's vehicle, while Clement's no-fault carrier was Cincinnati Insurance. When Cincinnati Insurance discontinued paying PIP benefits to Clement, this action was filed to determine which of the two insurers was responsible for the benefits. Auto Club, as the insurer of the vehicle owned by Denman, denied that it was liable for benefits under 3114(3) because of the absence of an employer-employee relationship between Clement and Denman. The trial court rejected Cincinnati Insurance's claim that because an employment relationship existed between Clement and Denman, Auto Club was responsible for the benefits.
In deciding this case and affirming the trial court, the Court of Appeals held that under 3114(3), an employee who suffers accidental bodily injury while an occupant of a motor vehicle owned or registered by the employer shall receive PIP benefits from the insurer of the furnished vehicle. The court noted that §3114(3) has been given a broad reading designed to allocate the cost of injuries resulting from use of business vehicles to the business involved. The court noted that the "economic reality test" is the appropriate standard to determine the existence of an employment relationship under the Michigan No-Fault Act. Factors to be considered include: (1) control of the worker's duties; (2) payment of wages; (3) right to hire, fire, and discipline; and (4) the performance of the duties as an integral part of the employer's business towards the accomplishment of a common goal.
In this case, the court stated that Denman, the owner of the vehicle, for whom Clement was providing caregiving services, did not have control of the worker's duties because Denman's daughter exercised that control. Second, the court stated that Denman did not have the right to hire, fire, and discipline Clement, as that authority also rested with Denman's daughter. Third, the court noted that the payment of Clement's wages was made from a joint checking account held jointly with Denman and her daughter and that there were no deductions made for taxes or benefits. Finally, the court noted that Clement's performance of her duties was not an "integral part of Denman's business," for the reason that Denman was not in the business of "being well." Therefore, the evidence does not show that Clement's duties were integral to a business venture of Denman.
Accordingly, the grant of summary disposition in favor of Auto Club was affirmed.