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Perkovic v Hudson Ins Co; (COA-UNP, 12/20/2012; RB #3309)


Michigan Court of Appeals; Docket No 302868; Unpublished
Judges Stephens, Owens, and Murray; Unanimous; Per Curiam
Official Michigan Reporter Citation:  Not Applicable; Link to Opinion alt 
On April 29, 2013, the Michigan Supreme Court DENIED Leave to Appeal; Link to Order courthouse graphic

Exception for Employer Provided Vehicles [§3114(3)]

Not Applicable 

In this unanimous unpublished per curiam Opinion --- involving a priority dispute between a the insurer that provided commercial trucking coverage for the commercial truck plaintiff was driving when he was injured (Zurich), the insurer that provided “bobtail” coverage for that same truck (Hudson), and the insurer that provided coverage for plaintiff’s personal vehicles (Citizens) --- the Court of Appeals REVERSED the trial court’s finding that Hudson was the priority insurer, finding instead that Zurich was the priority insurer because at the time of the accident, “plaintiff was an employee who suffered accidental bodily injury while an occupant of a motor vehicle owned by the employer (himself), and he [was] therefore entitled to receive PIP benefits” from the insurer of the vehicle under MCL 500.3114(3), which the Court determined to be Zurich regardless of the fact that Plaintiff operated the truck as an independent contractor.

The plaintiff in this case was an over-the-road trucker who hauled freight for a commercial trucking company (Hollingsworth) pursuant to an “Independent Contractors Operating Agreement.”  The plaintiff owned the truck that he used to haul the freight and leased to Hollingsworth.  The lease agreement provided that Hollingsworth had exclusive possession and control of the truck for greater than a 30-day period.  Defendant Zurich issued a commercial trucking insurance policy to Hollingsworth that covered the truck while it was hauling freight for Hollingsworth, which policy also included an endorsement for PIP coverage.  Defendant Hudson issued to a non-trucking insurance policy to the Plaintiff commonly known as “bobtail” insurance, which also included an endorsement for PIP benefits. However, the Hudson policy specifically excluded PIP coverage while the truck was being used by a commercial lessee in furtherance of its business.  The Court noted that “the Hudson and Zurich policies together” provided continuous coverage for the truck. Defendant Citizens was the insurer for Plaintiff’s personal vehicles.  

While carrying an actual load for Hollingsworth, the plaintiff was injured in an accident and became entitled to receive PIP benefits.  However, all three insurers denied coverage, and this action was commenced to determine which insurer was obligated to pay PIP benefits.  Zurich argued that it was not the priority insurer because the plaintiff was an independent contractor and therefore not covered under the trucking policy.  Hudson argued that coverage was excluded under its policy because at the time of the accident, the truck was being used to haul freight for Hollingsworth under a lease agreement.   Citizens argued that plaintiff was an employee of Hollingsworth and suffered accidental bodily injury while occupying a motor vehicle owned by Hollingworth and therefore was entitled to receive PIP benefits under the Zurich policy.The trial court held that Hudson was the priority insurer.  The Court of Appeals noted that it was not clear as to why the trial court’s reasoning was, but noted that the exclusion Hudson was relying on was void as against public policy.

This appeal followed, and after applying MCL 500.3114(3) to determine priority, the Court of Appeals REVERSED the trial court’s decision, finding instead that Zurich was the priority insurer.

In reaching this result, the Court relied on the case of Besic v Citizens Ins Co, 290 Mich App 19 (2010), wherein the court held that where a truck is owned by the claimant, leased to a commercial trucking company, and operated pursuant to an independent contractor agreement, both the claimant and the commercial trucking company are considered to be “employers” and therefore MCL 500.3114(3) is controlling where PIP benefits are owed  to independent freight operators who are injured while operating a truck that is insured by both a commercial trucking policy and “bobtail” policy.  The Court then concluded that even though plaintiff was an in dependent contractor to Hollingsworth, he was nonetheless an “employee,” albeit of himself.  After further concluding that Zurich was the insurer of the truck at the time of the accident, the Court held that Zurich was therefore was the priority insurer under §3114(3).

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