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MEEMIC v Allstate; (OCC-UNP, 10/23/1981; RB #472)


Oakland County Circuit Court; Docket No. 80-212574-CZ; Unpublished    
Circuit Judge Gene Schnelz; __________    
Official Michigan Reporter Citation: Not Applicable; Link to Opinion alt    

General Rule of Priority [§3114(1)]  
Exception for Employer Provided Vehicles [§3114(3)]  
Exception for Occupants [§3114(4)]  
PIP Benefits Payable as Loss Accrues [§3142(1)]  
12% Interest Penalty on Overdue Benefits – Nature and Scope [§3142(2), (3)]  
Interest Penalty Additive to Judgment Interest [§3142]

Civil Judgments and Interest (MCL 600.6013)    

The issue presented in this case concerns the interpretation of the employer vehicle priority provisions of §3114(3) of the No-Fault Act Phyllis Casper was a claims agent for Allstate and was furnished an automobile by her employer for personal and business use. The vehicle was titled in the name of Allstate Insurance Company, insured by it, and Phyllis Casper had no other vehicle or insurance in her household. She was involved in a motor vehicle accident while occupying a vehicle owned by another person and insured by MEEMIC. Phyllis Casper sought no-fault benefits from MEEMIC pursuant to the occupant priority provisions of §3114(4). MEEMIC commenced a declaratory judgment claiming that insulating Allstate from liability except in those situations where Phyllis Casper was occupying the Allstate vehicle constituted a violation of equal protection. Judge Schnelz rejected this constitutional challenge to the priority schemata of the Act and applied the "rational relationship" test.

In addition, Judge Schnelz rejected the argument made by MEEMIC that Ms. Casper had not "incurred" any expenses or loss since all of her medical bills and wage losses were compensated by other private insurance coverage. With regard to the meaning of the word "incurred" Judge Schnelz noted, "The Court is aided in its interpretation of 'incurred' by the Michigan Supreme Court's characterization of personal injury protection benefits as all medical costs and expenses occasioned by injury sustained in a motor vehicle accident.” Judge Schnelz applied this standard rather than the more restricted definition of incurred which would require someone "to become liable for or subject to." Finally, Judge Schnelz refused to award attorney fees against MEEMIC, holding that the claims made by MEEMIC "demonstrated legitimate questions of constitutional law and statutory construction." However, Judge Schnelz did award double interest under §3142 of the no-fault statute and 12 percent interest under the prejudgment interest statute.

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