Michigan Court of Appeals; Docket No. 112670; Published
Judges Reilly, Cynar, and Wahls; 2-1 (with Judge Reilly Dissenting)
Official Michigan Reporter Citation: 190 Mich App 540; Link to Opinion
Legislative Purpose and Intent
In this 2-1 decision by Judge Wahls, the Court of Appeals interpreted the language of Hawkeye's insurance policy governing whether a "covered person" was "occupying" the automobile at the time of the accident, thereby entitling that person to no-fault benefits and uninsured motorist benefits.
The claimant was a passenger in a van which was towing a small utility trailer when the trailer became unhitched and overturned. The claimant then exited the van and walked to the trailer intending to lift it upright, and while in the process of doing so, was struck by an unidentified hit and run driver. Approximately two minutes had elapsed from the time that plaintiff had exited the van until he was struck by the vehicle. Plaintiff had no insurance coverage of his own and claimed PIP benefits and uninsured motorist benefits from Hawkeye, which insured the van.
The trial court, relying upon the Michigan Supreme Court holding in Nickerson v Citizens Mutual Insurance Company, 393 Mich 324 (1975), ruled that plaintiff was "occupying" the van at the time of the accident, as was required by the terms of the policy. In affirming the trial court, the Court of Appeals held that the trial court correctly followed the rule of stare decisis, and the holding in Nickerson, supra, which construed the term "occupying" broadly so as to include those persons not actually inside or in contact with the vehicle at the time of the accident if there was "immediate prior occupying of the insured vehicle" and the subsequent injury arose "out of the use or repair of the same vehicle."
In distinguishing this case from the Supreme Court's holding in Royal Globe Insurance Company v Frankenmuth Mutual Insurance Company (Item No. 177), which distinguished and limited the holding in Nickerson, the majority affirmed the trial court and held that Nickerson involved construction of the term "occupying" as used in a private insurance contract, while Royal Globe construed the term "occupant" as used in the No-Fault Act. Doubtful or ambiguous terms in a private insurance policy are to be construed against the drafter. In contrast, construction of the statutory term "occupant" as contained in §3114(3) required that such terms be given their general or primary meanings in accordance with legislative intent.
The majority also distinguished the case of Lankford v Citizens (Item No. 766), which held that the "immediate prior occupancy" test derived from Nickerson, supra, was no longer valid in light of Royal Globe, supra. The Court of Appeals stated that the Lankford panel's reliance on Royal Globe was erroneous and transgressed the doctrine of stare decisis, and was an unwarranted extension upon the holding in Royal Globe. Since Lankford involved the interpretation of the term "occupying" as used in a private insurance contract, and not as used in the No-Fault Act, the Lankford panel was bound to follow our Supreme Court's decision in Nickerson. In light of the above, the majority held that plaintiff was entitled to PIP benefits under Hawkeye's policy, since construction of the term "occupying" as used in the Policy required application of the Nickerson test.
Judge Reilly dissented from this holding and stated that the concept of stare decisis did not bind the Court of Appeals to follow Nickerson where Nickerson was based on policy considerations which no longer existed. Nickerson was a "pre-no-fault law case in which the plaintiff would not be covered for injuries caused by an uninsured motorist unless determined to have been occupying the insured automobile." Judge Reilly would hold that the public policy considerations voiced by Nickerson, supra, were not relevant in the instant case and therefore should not control the court's decision. Since plaintiff was not "in, upon, getting in, on, out of, off of " either the van or the trailer when the collision occurred, Judge Reilly would hold that plaintiff was not entitled to benefits because he was not "occupying" either vehicle at the time of the injury.