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Vitale v Auto Club Insurance Association and Meridian Mutual Ins Co; (COA-PUB, 1/22/1999; RB #2041)


Michigan Court of Appeals; Docket No. 200452; Published   
Judges Hoekstra, Doctoroff, and O'Connell; Unanimous; Opinion by Judge O’Connell   
Official Michigan Reporter Citation:  233 Mich App 539; Link to Opinion alt   

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

Not Applicable    

In this unanimous published Opinion by Judge O'Connell, the Court of Appeals held that a person injured in an accident involving a motor vehicle provided to that person by his former employer as part of a severance package, was not an employee for purposes of triggering the priority provisions of section 3114(3) of the No-Fault Act, which would make the insurance company for the employer liable for personal injury protection benefits.

In this case, plaintiff sustained injury in 1994 in an accident involving a vehicle leased to plaintiff’s former employer, The Greeson Company. The employment relationship between plaintiff and Greeson ended in 1993. However, plaintiff continued to retain possession of the company car pursuant to the terms of a severance agreement which provided that Greeson would transfer ownership of the vehicle to plaintiff at the end of the lease period. As of the time of the accident, the former employer, Greeson, had yet to transfer ownership of the vehicle to plaintiff. Further, although the severance agreement provided that as of January 1,1994, the employer would have no further obligation to maintain insurance on the vehicle, as of the date of the accident in October, 1994, defendant Meridian Mutual continued to provide insurance on the vehicle under a fleet no-fault policy provided to Greeson. Following the accident, plaintiff filed claims for personal protection benefits against Meridian, together with his own personal automobile insurance company, Auto Club Insurance Association. Both insurance companies denied coverage under the priority provisions of the No-Fault Act.

The Court of Appeals held that under the circumstances, the employment relationship between plaintiff and Greeson was long past, and plaintiff was not in any way operating the vehicle in the service of Greeson when the accident occurred. Enjoyment of the fruits of a severance benefit does not constitute continuing employment for purpose of section 3114(3). Therefore, plaintiff was not an employee suffering accidental bodily injury while occupying a motor vehicle owned or registered by his employer within the meaning of section 3114(3).

The Court of Appeals also distinguished this case from Celina Mutual Insurance Company v Lake States Insurance Company, 452 Mich 84 (1996) (Item No. 1851), on the ground that in Celina there was no dispute that the injured party was hurt in the course of his employment, albeit a self-employment situation.  In that case, the court found that a self-employed person constituted an employee for purposes of section 3114(3).  Here, because the plaintiff was not in any way operating the vehicle in the service of his former employer, the court concluded that section 3114(3) was not satisfied.  The court held that the Legislature intended that section to cover only “active, presently existing employment relationships.”

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