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McMillan v Auto Club Insurance Association; (MSC-PUB, 11/28/1995; RB #1808)


Michigan Supreme Court; Docket No. 100463; Published  
Per Curiam; (with Justices Cavanagh and Levin Opposing Per Curium)  
Official Michigan Reporter Citation:  450 Mich 557; Link to Opinion alt   

Not Applicable

Motor Vehicle Code (Civil Liability of Owner) (MCL 257.401)  
Private Contract (Meaning and Intent)   

In this per curiam Opinion issued in lieu of granting leave to appeal, the Supreme Court reversed the Court of Appeals and held that a no-fault insurance company, who, at the request of an insured, issues a policy for a reduced premium which excludes a certain named individual, is not legally obligated to extend liability coverage where that excluded individual steals the insured car and causes damage. In so holding, the Supreme Court rejected the argument of the insured person that the policy was ambiguous by not making clear whether the exclusion would apply where the insured vehicle was stolen by the excluded driver. In rejecting the ambiguity argument, the Supreme Court stated:

"Mr. McMillan [the insured person] bargained with defendant that he would not be covered under the policy when Mr. Timmerman [excluded driver] drove his car. In exchange, defendant charged Mr. McMillan a reduced premium. There was no indication that the parties did not freely enter into this bargain in order to gain their respective financial benefits of doing so. Unfortunately, the event that Mr. McMillan declined to hedge against happened: Mr. Timmerman drove his van and caused damage to it. Defendant can now enforce its end of the bargain and refuse coverage for the damage."

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