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Ottenwess (Schroeder) v Hawkeye Security, et al; (COA-PUB, 6/20/1978; RB #94)

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Michigan Court of Appeals; Docket No. 77-2819; Published    
Judges R. B. Burns, and Allen; 2-1 (With J. Allen Dissenting)   
Official Michigan Reporter Citation: 84 Mich App 292; Link to Opinion alt   


STATUTORY INDEXING:
Exception for Employer Provided Vehicles [§3114(3)]
Exception for Occupants [§3114(4)]

TOPICAL INDEXING:
Workers Disability Compensation Act (MCL 418.1, et seq.)   


CASE SUMMARY:    
In a very lengthy 2-1 decision, the Court of Appeals once again addressed the confusing problem of §3114(3) of the no-fault statute and the workers' comp exclusivity rule. In a majority opinion written by Judge R. B. Burns and joined by Judge Gillis (two members of the panel which decided the Mathis case), the Court held that the decision reached in Mathis was correct and that an employee injured while an occupant of his employer's vehicle in the course of his employment was not entitled to receive no-fault benefits from the employer's no-fault insurer as such liability is prohibited by the exclusive remedy rule of the worker's compensation act In so holding, the majority made the following points:

1.    §3114(3) of the no-fault statute is merely a priority section. It was not intended to create a liability that the workers' compensation act had prohibited by the exclusive remedy rule. The phrase "to which he is entitled" used in §3114(3) indicates that an insured person's right to recover is limited by a prior existing exclusivity rule.

2.    The majority held that §3114(3) only permits the injured employee to turn to his employer's carrier where the employee sustains bodily injury while an occupant of the employer's vehicle outside of the course of his employment. An example of this would be where an employee or members of his family were riding in a company car outside of the employee's course of employment.

3.    The Court rejected the argument that the "to which he is entitled" language refers to §3109(1) subtractions.

4.    The Court rejected the recent decision in Hawkins v Auto-Owners Insurance Company (item number 73). In particular, the Court disagreed with the distinction made in Hawkins that the Mathis case only dealt with self-insurers. The Court held that there is no valid distinction between self-insurers and insurers and the liabilities of both must be coextensive. Under the Hawkins rationale this Court reasoned that the liability of insurers would be greater than that of self-insurers. For purposes of applying the exclusive remedy rule, an employer's no-fault insurer must be considered the alter ego of the employer.

5.    The Court also rejected the plaintiff’s argument that plaintiff’s claim was based on contract rather than tort. The exclusivity rule does not turn upon the characterization of the asserted cause of action.

6.    The Court did hold, however, that the plaintiff was entitled to no-fault benefits from plaintiff’s private insurance carrier inasmuch as the worker's comp exclusivity rule did not bar recovery against a private carrier. The Court reasoned mat the private carrier's liability for no-fault benefits was based on §3114(4)(b). In reaching that conclusion the Court held that the plaintiff was an "occupant" of the employer's vehicle in that he was crushed to death when the dump truck box trapped him between the box and the frame of the truck during a maintenance operation. Because §3114(3) did not permit the employee to recover no-fault benefits from the employer's carrier, the priority provisions of §3114(4)(b) require that the employee turn to his own private company as they were the insurer of "the operator of the vehicle occupied." In finding that the employee was an "occupant" the Court cited the Supreme Court decision in Nickerson v Citizens Mutual, 393 Mich 324 (1975).

Judge Allen filed a lengthy dissent. In his dissent he wrote that §3114(3) is more than a priority provision. It evidences a legislative intent to authorize receipt of no-fault benefits from the employer's carrier. He also argued that the majority's limitation of §3114(3) to nonemployment related accidents was ill-founded in that it was an awkward way for the Legislature to express such an intent It applies to a situation which would occur so infrequently that it appears to be illogical for the Legislature to have intended the section to include such a situation, and the legislative history of the bill discloses that the "to which he is entitled" language refers to reducing no-fault benefits to the extent of workers' comp benefits received. Judge Allen also concurred with the recent Court of Appeals decision in Hawkins but disagreed that there was any valid distinction between self-insurers and insurers. Finally, Judge Allen held that there should be no liability as to the plaintiff’s private carrier because his reading of §3114(3) indicates that no-fault benefits are due from the employer's carrier.


Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit SinasDramis.com.

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