Michigan Court of Appeals; Docket No. 149786; Published
Judges Brennan, Corrigan, and Anderson; Unanimous; Opinion by Judge Corrigan
Official Michigan Reporter Citation: 201 Mich App 635; Link to Opinion
In this unanimous published Opinion by Judge Corrigan, the Court of Appeals interpreted the obligation of an insurance company to insure and defend where a named excluded driver pursuant to an authorization under MCLA 500.3009(2) was operating the vehicle at the time of the accident.
Plaintiff’s automobile was insured with defendant Auto Club pursuant to the Michigan no-fault act. The policy included an "authorization for excluded driver (named excluded person)" endorsement, pursuant to the authorization contained in §3009(2). The authorization named plaintiff’s wife as an excluded person. The endorsement included the statutorily required warning indicating that when a named excluded person operates a vehicle "all liability coverage is void — no one is insured."
Plaintiff did not permit his wife to operate the vehicle, but she found a hidden set of keys, took the car, and was involved in an automobile accident The injured motorist sued plaintiff under the owner's liability statute. Auto Club denied coverage or a defense on the grounds that the vehicle was being operated by an excluded driver, and, therefore, all coverage was void. Plaintiff contended that §3009(2) unconstitutionally authorizes the deprivation of a property right without due process of law.
The Court of Appeals, in upholding the decision of the trial court granting summary disposition to Auto Club, held that §3009(2), was presumed constitutional, and although the issue has not squarely been presented, a number of decisions have concluded that the provisions of §3009(2) are a valid exercise of legislative power, and that the "rational basis" test of Shavers v Attorney General, 402 Mich 554 (1978) has been met.
The Court of Appeals rejected plaintiff’s argument that the excluded driver endorsement should be limited only to those instances when the named insured has consented to the excluded driver's use of the vehicle. The court held that no panel of the Court of Appeals has construed this statute in this fashion.
The court also rejected plaintiff’s argument that he did not knowingly waive his right to due process because he was not fully informed of the consequences of executing the "named driver" exclusion. In rejecting this argument, the court pointed out that the warning on the policy plainly stated that when a named excluded person operates a vehicle, all liability coverage is void and no one is insured. Therefore, the validity of the excluded driver endorsement was affirmed.