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DAIIE v Irvine; (COA-PUB, 9/6/1979; RB #232)


Michigan Court of Appeals; Docket No. 78-5222; Published   
Judges T. M. Burns, Allen, and Holbrook; Unanimous; Opinion by T. M. Burns   
Official Michigan Reporter Citation: 92 Mich App 371; Link to Opinion alt   

Compulsory Insurance Requirements for Owners or Registrants of Motor Vehicles Required to Be Registered [§3101(1)]
Security Requirement Applicable for Highway Use [§3101(1)]
General / Miscellaneous [§3131]

Not Applicable   

In a unanimous Opinion by Judge T. M. Burns, the Court of Appeals held that a residual liability exclusionary clause in DAIIE's insurance contract excluding liability coverage "to any automobile while operated in a prearranged race or speed contest" was void as against public policy. Accordingly, DAIIE's liability coverage applied to a lawsuit filed by a spectator who was injured when a car went out of control in an "autocross" race that was being held on a local public high school parking lot. The Court stated that the Legislature intended that automobile insurance policies conform to the dictates of the no-fault statute. Thus, where an insurance policy contains an exclusionary clause that has not contemplated by the Legislature, that clause is invalid and unenforceable. In this case, the insurance company could point out no legislative authorization for the exclusionary clause that it sought to use to avoid liability. Thus, because the effect of the exclusionary clause's operation would be to limit the coverage acquired by the financial responsibility law, the clause was declared unenforceable by the Court.

In addition, the Court also rejected the argument that the no-fault status has no application to this case because the accident occurred on private property and not on a public highway. The Court noted that the operator of the vehicle was driving a motor vehicle that was "designed or operation on a public highway" as provided for in §3101(2). The fact that the accident occurred on private property as opposed to a public highway was "irrelevant for the purpose of the no-fault act's applicability."

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