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Grubish v State Farm Mutual Automobile Insurance Company and United States Fire Insurance Company and Meridian Mutual Insurance Company; (COA-UNP, 2/07/1997; RB #1917)


Michigan Court of Appeals; Docket No. 183116; Unpublished
Judges Michael Kelly, Saad, and H. A. Beach; Unanimous; Per Curiam
Official Michigan Reporter Citation:  Not Applicable; Link to Opinion alt  

Exception for Employer Provided Vehicles [§3114(3)]
Definition of Owner [§3101(2)(h)]  
Coordination with Other Health and Accident Medical Insurance [§3109a]   
Persons Affected by Coordination [§3109a]

Not Applicable   

In this unpublished per curiam Opinion in a case for no-fault first party benefits, the Court of Appeals found that a labor broker's customer was plaintiffs employer for purposes of the employer furnished vehicle provision of §3114(3) of the no-fault act. The court also limited a coordination of benefits clause contained in a no-fault policy to exclude its application to the insured's employees.   

Plaintiff, an Ohio resident, was injured in an automobile accident which occurred in Michigan. The plaintiff was a passenger in a pick-up truck owned by Advanced Communications. At the time of the accident, plaintiff was employed by ACI Group, a company related to Advanced Communications. ACI Group was formed for the purpose of providing employees to Advanced Communications and other related companies. The issue in the case was whether plaintiff was injured while in a vehicle owned by his "employer." The trial court found that, in fact, the vehicle was not owned by plaintiffs employer, ACI Group, and therefore, plaintiffs personal no-fault insurer, State Farm, was obligated to provide benefits under §3114(3) of the no-fault act.   

The Court of Appeals held that a two-step process is involved in determining whether the employer furnished vehicle exception of §3114(3) applied to require plaintiffs employer to provide the no-fault benefits. First, it must be determined whether the purported employer is the owner of the vehicle for purposes of the no-fault act. Here, the Court of Appeals found the trial court properly ruled on summary disposition that ACI Group was not the owner of the pick-up truck because it was titled in the name of Advanced Communications and utilized in connection with the work of Advanced Communications. The second step of the analysis is whether the owner of the vehicle is considered plaintiffs employer. In making this determination, the appellate court found that the "economic reality test" was appropriate, and in this regard, the trial court was to consider the following factors: 

"1) control of a worker's duties, (2) payment of wages, (3) right to hire, fire and disciple, and (4) performance of the duties as an integral part of the employer's business towards accomplishment of a common goal. No single factor is controlling, but rather, all the factors are viewed as a whole."   

Applied here, the court held that plaintiff, as an employee of the labor broker, ACI Group, was also an employee of ACI Group's customer, Advanced Communications and that the four factors of the economic reality test were each satisfied. First, ACI Group was established solely for the purpose of leasing workers to Advanced Communications and therefore controlled plaintiffs duties. Although plaintiff was paid by Advanced Communications, that company was reimbursed by ACI Group, and therefore, the court found that ACI Group actually paid plaintiff. Regarding the third factor, the contract between ACI Group and Advanced Communications provided that Advanced Communications would discipline and terminate workers. The court found that the fourth factor was also satisfied, since it concluded that ACI Group's entire existence was dependent upon the needs of Advanced Communications, and therefore, the two companies are "so integrally related that their common objectives were only realized by combined business efforts." Therefore, the court deemed plaintiff to be an employee of Advanced Communications.  

Advanced Communications had admitted, in requests for admissions, that it had use of the subject pick-up truck for greater than 30 days, and therefore was the "owner" of the truck for purposes of the no-fault act under §3I0l(2)(g)(i). Based on this, the Court of Appeals concluded that plaintiff was injured while a passenger in a vehicle owned by Advanced Communications, who was plaintiffs employer under the economic reality test. Therefore, United States Fire Insurance Company, the insurer of Advanced Communications, was liable to provide plaintiffs no-fault first party benefits.   

United States Fire Insurance Company argued that if it was liable to provide coverage, it was entitled to coordinate its coverage with plaintiffs health insurer. The coordination rider to the United States Fire policy provided in this regard as follows: 

"MICHIGAN PERSONAL INJURY PROTECTION for you or any 'family member' is changed as follows:  

The insurance does not apply to the extent that any benefits, indicated above by an ‘X,’ are paid or payable under any other insurance, service, benefit or reimbursement plan providing similar benefits."  

The "medical expenses and work loss benefits" item on the form was marked with an "X."   

The Court of Appeals found that the above quoted coordination provision did not apply to plaintiff as an employee of the named insured. The policy states the term "you" as used in the policy refers "to the named insured shown on the declarations" which was Advanced Communications and, therefore, did not include plaintiff who was merely an employee of the named insured. Likewise, the court held that the term "family members" does not include unidentified employees. Therefore, the coordination clause did not operate here to preclude coverage under the policy. More importantly, the court noted that under §3109a of the no-fault statute, a coordination claim only extends to persons named in the policy and their resident relatives.

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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