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Grange Ins v Lawrence; (MSC-PUB, 07/29/13; RB #3351)


Michigan Supreme Court; Docket No. 145206; Published  
Opinion by Justice Mary Beth Kelly; 4-3 ( with Justice Zahra Concurring in Result)
Official Michigan Reporter Citation:  ___ Mich ___; Link to Opinion alt   

Determination of Domicile [§3114(1)]   
Separtated and Divorced Spouses [§3114(1)]  
Equal Priority Situations [§3114(6)]  

Not Applicable  

In this 4-3 Opinion by Justice Mary Beth Kelly regarding "domicile" under MCL 500.3114(1), the Supreme Court held that "a child of divorced parents has only one domicile at any given point in time" ; and further held that for minor children of divorced parents where a courth has entered a custody order, "the child's domicile is established by operation of law and that the custody order is thus determinative of the child's domicile for all purposes, including the no-fault act."

This case is a consolidated appeal involving two priority disputes over payment of PIP benefits for minor children of divorced parents, the outcome of which turned on the "domicile" of the children. In the first case, Grange Ins v Lawrence, the parents' Judgement of Divorce gave both parents "joint legal custody" of the child,and gave the child's mother "primary physical custody" of the child. However, the judgment of divorce provided the father (Defendant Lawrence) with "frequent parenting time, including alternating weekends, Wednesday evenings, alternating holidays ,liberal phone contact, and liberal parenting time when Rosinski was unavailable." The Judgment further provided that "[a] parent whose custody or parenting time of a child is governed by this order, shall not change the legal residence of the child except in compliance with "MCL 722.31] . . . ." The child was fatally injured in an accident while riding as a passenger in a car "owned and driven" by the child's mother. The mother's no-fault insurer paid approximately $30,000 in PIP benefits under MCL 500.3115(2), arguing that the child was "domiciled" in both households for purposes of MCL 500.3114 such that the two insurers were the same in order of priority for payment of PIP benefits.In the second case, ACIA v State Farm, primary physical custody of the minor child was given to the father during the divorce. The father later obtained permission from the court to move the child to Tennessee. The mother remained in Michigan and was given six weeks of visitation in the summer. When the child was 16 years old, the parents agreed to allow the child to remain in Michigan with the mother beyond the six-week visitation period. The child therfore enrolled in school and continued to live in Michigan with her mother in a home that belonged ot the child's great uncle. Subsequently, the child was involved in an ultimately-fatal single-car accident while riding as a passenger in a vehicle owned and driven by a friend from school. ACIA was the no-fault insurer for the household where the mother and the child had been residing, and State Farm was the no-fault insurer for the accident vehicle. ACIA sought a determination that State Farm was responsible for paying no-fault PIP benefits for the accident, arguing that the child was not "domiciled" in the home of the mother for purposes of MCL 500.3114 such that State Farm was the priority payer.

The Court determined that resolving the foregoing priority disputes presents two issues: "(1)whether a child of divorced parents who has a legal residence in both parents' homes and who is injured in an automobile accident can be 'domiciled' in more than one household within the meaning of MCL 500.3114; and (2) whether a family court order establishing the custody of minor children is conclusive evidence of a child's domicile for puposes of determining coverage under MCL 500.3114(1)."

With regard to the first issue, the Court held that "a child of divorced parents has only one domiciled at any given point in time." In so holding, the Court found the common-law principles of "domicile" to be controlling, stating:

"Notably, the no-fault act does not define the term 'domiciled.' The unambiguous language of MCL 500.3114 simply states that 'a personal protection insurance policy. . . applies to accidental bodily injury to the peron named in the policy, the pern's spuse, and relative of either domiciled in the same household . . . .' When construing this statutory language, our main objective is to discern the Legislature's intent through the language plainly expressed. Normally, this Court will accord an undefined statutry term its ordinary and commonly used meaning. However, where the Legislature uses a technical word that has acquired a particular meaning in the law, and absent any contrary legilative indication, we construe it 'according to such peculiar and appropriate meaning.' The term 'domicile' is just such a word that has precise, technical meaning in Michigan's common law, and thus must be understood according to that particular meaning."

The Court then went on to explain that "our common law has recognized that from the time of a person's birth—from childhood through adulthood—a person can only have a single domicile at any given point in time. Indeed, there are few legal axioms as established as the one providing that every person has a domicile, and that a person may have one—and only one—domicle." The Court further explained that "the common law has necessarily distinguished between the concepts of 'domicile' and residence."  In keeping with these principles, the Court concluded that "because a person, from the moment of his birth onward, can only have one domicile within the traditional meaning of that term, it follows that a child, regardless of his parents' marital status or his multiple legal residences, may also have only one domicile at any given point in time."

With regard to the second issue, the Court held that "in the event that the child's parents are divorced and a family court has entered an order relating to custody . . . , the child's domicile is established by operation of law and that the custody order is thus determinative of the child's domicile for all purposes, including the no-fault act." The Court reasoned that "Once a custody order is entered pusuant to a judgment of divorce or otherwise, that custody order is legally binding on the parents and the order cannot be modified absent court approval or compliance with the applicable provisions of the Child Custody Act 68. Because parents are legally bound by the terms of the custody order, the order therfore negates the parents' legal capacity, which is necessary to establish a domicile of choice for the minor child that is different from that established in the custody order."

After applying these principles, the Court held in Grange that because a judgment of divorce conclusively established the minor child's domicile with her mother at the time of the accident, the father's no-fault insurer, Grange Ins., was not liable for providing PIP benefits. In ACIA, the Court held that because the custody order conclusively established the monor child's domicile with her father at the time fo the accident, the no-fault insurer insuring the mother's household, ACIA, was therfore not liable for providing PIP benefits.

Notably, in footnote 78 of the Court's Opinion, the Court recognized that determining domicile by reference to a custody order may appear to lead to a perflexing result where the order grants each parent joint physical custody under MCL 722.26a(7) and creates an equal 50/50 division of physical custody." However, the Court emphasized that "an award of joint physical custody alone does not automatically create this potentially perplexing situation," explaining:

". . . although an order may award joint physical custody, it may also establish that one parent has primary physical custody. Alternatively, the details of the physical custody division may reveal that one parent has physical custody of the child more often than the other parent despite the joint physical custody arrangement. Thus, it is only in the very rare event that a custody order awards joint physical custody and grants both parents an equal amount of time to exercise physical custody that this issue arises. Indeed, MCL 722.26a(7) does not require that parents share equal physical custodial time for a court to award joint physical custody; rather, [MCL 722.36a(7)(a)] merely defines joint physical custody as an order '[t]hat the child shall reside alternately for specific periods with each of the parents.' The statute does not, however, require that the child reside with each parent for an equal amount of time to constitute joint physical custody."

In a concurring opinion by Justice Zahra (joined by Justices Markman and McCormack), Justice Zahra agreed with the result reached by the majority and would hold that a family-court custody order merely establishes a presumption of domicile that could be rebutted by evidence that the child's actual living arrangements are so clearly inconsistent with the family court's custody order that it is reasonable to conclude that the parents have expressly or impliedly reached an agreement regarding the child's domicile. To make such a determination, courts should consider the factors traditionally used to assess domicile.







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