Michigan Court of Appeals; Docket No. 170289; Unpublished
Judges Sawyer, Bandstra, and Burns; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Legislative Purpose and Intent
In this unanimous unpublished per curiam Opinion, the Court of Appeals reversed the trial court in a priority dispute among insurers. The case arose out of an accident in which an individual named Robert Rood sustained personal injuries. The facts were undisputed that Rood was a self-employed owner of a tow truck service which was a sole proprietorship. Rood owned the business vehicle involved in the accident which occurred during the course of his business. The vehicle was titled in Rood's name and insured by plaintiff insurance company in Rood's name. The defendant insured three personal vehicles jointly owned by Rood and his wife. Plaintiff, the business vehicle insurer, filed suit against defendant, the personal vehicle insurer, seeking reimbursement for benefits it had paid.
The trial court granted summary disposition in favor of defendant personal vehicle insurance company under §3114(3), which provides an "employee ... who suffers accidental bodily injury while an occupant of a motor vehicle owned or registered by the employer, shall receive personal protection insurance benefits to which the employee is entitled from the insurer of the furnished vehicle." The trial court held that Rood was an employee of his sole proprietorship business and thus, this section applies.
The Court of Appeals noted that the term "employer" and "employee" are not defined by the no-fault act. The Court of Appeals, utilizing a legal dictionary definition, found that the term "employee" means "a person in the service of another" and an "employer" as "one who employs the services of another." The court found that implicit in these definitions is the assumption that the existence of an employer-employee relationship requires more than one individual or entity, and therefore, a sole proprietor, like Rood, could not be an "employee" of his business. The court noted that this approach is consistent with the workers' compensation laws, where a sole proprietor is not considered an "employee" for purposes of that act. Accordingly, the Court of Appeals held that the trial court erred in granting summary disposition in favor of defendant personal vehicle insurer and the court remanded the case to the trial court for further proceedings consistent with its opinion.