Michigan Court of Appeals; Docket Nos. 48721 and 49891; Published
Judges Maher, R. B. Burns, and Walsh; 2-1 (With Burns Dissenting)
Official Michigan Reporter Citation: 108 Mich App 46; Link to Opinion
Garage Keeper’s Liability Act (MCL 256.541, et seq.)
In this 2-1 decision by Judge Maher, the Court of Appeals dealt with vehicular and nonvehicular property damage claims arising out of garage repair incidents. First, insofar as the nonvehicular claim (fire damage to the building caused by fuel line explosion), the court held that property protection insurance benefits were clearly payable under §3121 of the Statute in that the fire damage arose out of the maintenance of the motor vehicle. The court applied the same type of "causal connection" analysis as has been applied to the phrase "arising out of" as that phrase is used in the personal insurance protection provisions of §3105. The court stated that:
"Contrary to defendant's suggestion, the statute in no way requires that the maintenance be done personally by the policy holder. . . .While the intervening negligence of one party may be sufficient to defeat a claim that another party's negligence was a proximate cause of an accident in a fault based system, the term 'arising out of does not require as strict a showing of causation as does the concept of proximate cause. . . . The relationship between the maintenance and the damage must, however, be more than incidental, fortuitous, or but for."
Second, with regard to the vehicular property damage claim, the court rejected the prior holding of another panel of the Court of Appeals in Liberty Mutual v Allied Truck Equipment Co. (Item No. 361), and held that the garage keeper's liability does not apply to cases where the No-Fault Act applies. The court stated:
"In this regard, we respectfully suggest that Liberty Mutual was wrongly decided. The garage keepers’ liability act is principally designed to set up certain presumptions of negligence applicable to a fault based theory of recovery. The no fault act on the other hand, is clearly designed to replace a fault based system for claims of property damage with a sufficient causal connection to the maintenance of a motor vehicle. That causal connection, once established, controls despite the existence of other, independent causes. While the garage keepers' liability act would set up a presumption of negligence on the part of the dealership (at least as to claims on behalf of the owners of motor vehicles entrusted to the dealership), that presumption is meaningless in a no fault system. Accordingly, the garage keepers' liability act cannot logically supersede the no-fault act in cases where the no-fault act applies."