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Parham v Preferred Risk Mutual Insurance Company; (COA-PUB, 4/5/1983; RB #636)


Michigan Court of Appeals; Docket No. 61538; Published  
Judges Walsh, Beasley, and T. R. Thomas; Unanimous; Opinion by Judge Thomas  
Official Michigan Reporter Citation: 124 Mich App 618; Link to Opinion alt    

Exception for Employer Provided Vehicles [§3114(3)]

Not Applicable    

In this unanimous Opinion by Judge T. R. Thomas, the Court of Appeals held that the "economic reality test" was to be applied to the determination of whether or not an employer-employee relationship existed for purposes of determining priority of payments under §3114(3) of the Act. That section provides that if an accident victim was an occupant of a vehicle owned or registered by the "employer," it is the employer's carrier which pays no-fault benefits.

In adopting the economic reality test, the Court said the factors to be considered are (1) control of the worker's duties, (2) payment of wages, (3) right to hire, fire, and discipline, and (4) the performance of the duties as an integral part of the employer's business towards the accomplishment of a common goal. In so holding, the Court of Appeals reversed the Circuit Court's ruling that the "right of control" test should be utilized to determine the existence of an employer-employee relationship. The case was remanded for an evidentiary hearing on the economic reality test.

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