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Nelson v Transamerica Insurance Services and Transamerica Insurance Company; (MSC-PUB, 12/22/1992; RB #1585)


Michigan Supreme Court; Docket No. 92069; Published  
Opinion by Justice Cavanagh; Unanimous  
Official Michigan Reporter Citation:  441 Mich 508; Link to Opinion alt  

Obligation of Motorcycle Owner/Registrant to Insure Motorcycles [§3103]  
Disqualification for Uninsured Owners or Registrants of Involved Motor Vehicles or Motorcycles [§3113(b)]

Legislative Purpose and Intent 
Off-Road Recreational Vehicles and All Terrain Vehicles (ORVs and ATVs)  

In this unanimous Opinion by Justice Cavanagh, the Supreme Court reversed the Court of Appeals in Item No. 1473, and held that even though plaintiff did not have no-fault insurance for his motorcycle, he is entitled to personal injury protection benefits because his motorcycle was only meant for off-road use.  

In this case of first impression, the Supreme Court reconciled §3103(1) of the No-Fault Insurance Act, which requires owners of motorcycles to obtain public liability insurance, with §3 of the Off-Road Recreational Vehicle Act (MCLA 257.1601, et seq), which exempts owners of off-road recreational vehicles, which include motorcycles, from the No-Fault Act's insurance requirement. The court was asked to determine whether a vehicle which may be considered as either an ORV or a motorcycle under the no-fault act, but which is not registered as an ORV, is exempt from having to be covered by a no-fault insurance policy when operating on a public road.  

Plaintiff was riding an uninsured motorcycle when he collided with a pickup truck insured by defendant Transamerica. Plaintiff’s motorcycle was not equipped with necessary safety features which would allow it to be operated on public highways, in that it did not have a headlight, turn signals or brake lights. It was equipped with knobby tires and higher suspension which would be useful only in negotiating difficult terrain. At the time of the accident, plaintiff was operating his motorcycle on off-road vehicle trails. The collision occurred with the pickup truck, as plaintiff traveled on Hillside Road which was a connector between two sections of ORV trails.  

Defendant claimed that plaintiff was barred from receiving benefits because he failed to insure his motorcycle as required by the No-Fault Insurance Action, §3103, and also because he failed to register his motorcycle as an ORV pursuant to MCLA 257.1604. 

The No-Fault Act, §3103(1) provides:

"An owner or registrant of a motorcycle shall provide security against loss resulting from liability imposed by law for property damage, bodily injury, or death suffered by a person arising out of the ownership, maintenance, or use of that motor vehicle. ..."

Plaintiff claimed that his motorcycle was exempt from the no-fault insurance requirement under MCLA 257.1603, because it is an off-road recreational vehicle under the provisions of the ORV Act Plaintiff also argued that it did not matter that the motorcycle was not registered as an ORV, because the provisions of the ORV Act do not disqualify a person from no-fault benefits by reason of failing to register under the act. 

The trial court held in favor of the defendant, ruling that because the term motorcycle falls within both the No-Fault Act and the ORV Act, the No-Fault Act prevails, and therefore, all motorcycle owners must obtain public liability insurance or forfeit personal injury protection benefits. The Court of Appeals affirmed.

In reversing the lower court holdings, the Supreme Court traced the legislative history of both the ORV Act and the No-Fault Act to reach the conclusion that, when read together, the two statutes demonstrate that although motorcycles as defined by the No-Fault Act must be insured, motorcycles that meet the DRV definition are exempt from the insurance requirement under §3103 of the No-Fault Act, regardless of whether the motorcycle is registered as an ORV. A person injured in a collision involving a motor vehicle and a motorcycle meeting the ORV definition is therefore entitled to collect personal injury protection benefits under §3105.  

The court noted that the conflict in this case arose because the Legislature, in amending the No-Fault Act in 1975 to add motorcycles to the list of vehicles for which owners are required to obtain insurance, did not, however, amend the ORV Act, in which motorcycles are included in the definition of off-road vehicles that are exempt from the insurance requirement. The court found, however, that these two legislative enactments could be reconciled. The court held that the legislation intended that only on-road motorcycles be required to obtain public liability insurance. Further, inherent in the definition of ORV is the intention that only off-road vehicles be included. It logically follows, therefore, that in including the term "motorcycle" in the ORV definition, the Legislature intended to include only motorcycles that were specifically designed for off-road use. Just as certain 4-wheel motor vehicles may be exempt under the ORV Act as a subset of 4-wheel motor vehicles required to be insured, so too may certain motorcycles be considered to be ORV exempt from the general category of motorcycles required to be insured. Therefore, any motorcycle not designed for use as an ORV is not protected by the ORV exemption and must be insured under the No-Fault Act.  

Conversely, if the motorcycle meets the definition of an ORV, it remains an ORV even if it is not registered as an ORV. Further, the Legislature, when it enacted §3113 imposing the penalty for failing to obtain appropriate insurance, did not state that ORV motorcycle owners would forfeit benefits for failing to register the vehicle as an ORV.  

The court therefore held that the No-Fault Act and the ORV Act read together, demonstrated that although motorcycles designed for use on public highways must be insured, motorcycles designed for off-road recreational purposes are exempt from the No-Fault Act insurance requirement. Further, failing to register an ORV does not result in forfeiture of personal injury protection benefits. Based on these conclusions, the court reversed the judgment of the Court of Appeals and remanded for further proceedings.

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