Michigan Court of Appeals; Docket No. 121337; Published
Judges M. J. Kelly, Jansen, and Lesinski; 2-1 (with Judge Kelly, Dissenting)
Official Michigan Reporter Citation: 195 Mich App 127; Link to Opinion
Definition of Owner [§3101(2)(h)]
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Medicaid Benefits [§3109(1)]
Replacement Service Expense Benefits: Nature of the Benefit [§3107(1)(c)]
Disqualification for Uninsured Owners or Registrants of Involved Motor Vehicles or Motorcycles [§3113(b)]
One-Year Back Rule Limitation [§3145(1)]
Motor Vehicle Code (Registration and Title Requirements) (MCL 257.201, et seq.)
Private Contract (Meaning and Intent)
In this 2-1 published Opinion by Judge Lesinski, the Court of Appeals reversed and remanded for new trial on the issue of whether the injured plaintiff, Christopher Noel, was the owner of an uninsured motor vehicle and thereby ineligible for no-fault benefits, including benefits through the Assigned Claims Plan under the provisions of §3113(b). The key issue at trial turned on who was the owner of a Mercury Monarch being driven by Christopher Noel at the time of his injury. The vehicle was uninsured, as were two other vehicles in the Noel household. The license plate on the Mercury Monarch was registered to another automobile owned by Mr. Noel's wife, Mary Noel.
When application for no-fault benefits was made pursuant to the procedures of the Assigned Claims Facility, Mr. Noel answered the question concerning who was the owner of the vehicle, with the statement "just purchase [sic] by Chris Noel." On the basis that he was the owner of the vehicle according to his application, the Assigned Claims Facility denied benefits. A second application was submitted by Mr. Noel. and this time stated that the owner of the vehicle was "Mary Noel." Citizens Insurance Company was assigned the claim, and the matter proceeded to trial. Botsford General Hospital was allowed to intervene to pursue its claim for medical expense losses. The question of ownership of the vehicle was submitted to the jury and a verdict was rendered in favor of the plaintiff’s.
On the issue of ownership of the vehicle, evidence indicated that not long before the accident, the Monarch had been purchased from Dennis Howder. Christopher Noel gave Howder $300 cash and took possession of the car. Howder signed the Certificate of Title, but neither he nor Noel filled in the line designated for the new owner. At the time of sale, a license plate registered to Mary Noel was placed on the car. Over a hearsay objection by Citizens, a handwritten receipt dated 25 days before the accident was allowed into evidence. This receipt stated mat the $300 paid for the Monarch was "received from Mary Noel." Evidence was also admitted that at the time of the accident, no application for a new title had been filed with the Secretary of State, and title was still under the name of Dennis Howder. Mr. Noel claimed that although he conducted the purchase transaction with Howder, the purchase money was his wife's and was merely taking delivery of the car as her agent Citizens argued that the transfer of title statute, MCLA 257.233 had not been complied with and based upon the undisputed fact that plaintiff had actually handed the money to the seller, taken possession of the vehicle, and received delivery of the Certificate of Title, conclusively established him as the owner.
The Court of Appeals held that legal title and ownership of a vehicle are not co-extensive terms under the Michigan Vehicle Code. More than one person can be liable as "owner," even if no one possesses all the normal incidents of ownership. Messer v Averill, 28 Mich App 62 (1970). The court also held that the question of ownership is one of fact that is to be decided by the fact finder. The court held that the proper focus of inquiry in this case was whether Christopher Noel was an "owner" of the vehicle, not whether Howder had effectively transferred title. The court held that Christopher Noel would be entitled to PIP benefits regardless of whether Howder or Mary Noel owned the vehicle, so long as plaintiff himself was not an owner. Therefore, the court held that the lower court did not err by permitting the question of Mary Noel's ownership to be decided by the jury rather than grant Citizens' motion for a directed verdict.
However, the Court of Appeals went on to determine that the admission of the written statement over Citizens' objection that it was hearsay was error, and required reversal and remand for a new trial. Although MRE 803(15) contains an exception from the hearsay rule for documents affecting an interest in property, the Court of Appeals held that for the receipt to qualify as a hearsay exception, it must be established that the receipt was made under circumstances that promote reliability. The court held that the handwritten receipt at issue was not made under such circumstances. Handwritten documents that would neither be filed nor signed by anyone not a party to the transaction do not satisfy the reliability element. A certificate of title, on the other hand, would meet the reliability standard where filed with the appropriate agency. The court therefore concluded that the receipt did not satisfy the exception to the hearsay rule and should not have been admitted.
In a related issue, the Court of Appeals held that if Noel qualifies for PIP benefits, he is not entitled to receive Medicaid benefits, since he is not "medically indigent" within the meaning of MCLA 400.106(l)(b)(ii). Therefore, Botsford General Hospital was pot precluded from pursuing its claim for medical expenses, since it was not obligated to accept the amounts received from Medicaid as payment in full for its services, if, in fact, Noel was entitled to receive PIP benefits.
The court also held that the decision by the Department of Social Services not to pursue its Medicaid claim did not automatically preclude Botsford General Hospital from seeking recovery from Citizens for services it provided to Noel. The Michigan Medicaid statute does not create an exclusive right of subrogation, and in fact, establishes the right of the injured person to seek payment for reasonable medical costs. MCLA 400.106(1)(b)(ii).
The Court of Appeals also rejected an argument by Citizens that the one year limitation contained in §3145(1) precluded Botsford's claim. The court held that Botsford's claims, made in a cross-complaint filed after the original complaint, did not enlarge upon the claims filed by Noel within the one year time limitation seeking compensation for medical expenses. Therefore, the statute of limitations contained in §3145(1) did not bar Botsford's claim.
The Court of Appeals also addressed an issue of entitlement to replacement service expenses for care provided by Mrs. Noel to her husband at home. The Court of Appeals affirmed that case law permits the recipient of no-fault PIP benefits to recover replacement services, including those provided by family members.
Finally, the Court of Appeals addressed the issue of plaintiff s claim for wage loss benefits. Citizens argued that Plaintiff had failed to produce income tax returns or business records in response to a request for production. The Court of Appeals held that the trial court properly denied Citizens' request for the standard jury instruction 6.01(a) regarding evidence under a party's control, since Citizens had never pursued production of the tax documents during discovery.
In his dissent, Judge Kelly would hold that the admission of the handwritten receipt was harmless error and did not require reversal.