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Palmer v Citizens Ins Co of America, et al; (COA-UNP, 7/3/2014; RB #3346)


Michigan Court of Appeals; Docket #314755; Unpublished  
Judges Jansen, Murray, and Boonstra; Unanimous; Per Curiam  
Official Michigan Reporter Citation: Not Applicable; Link to Opinion alt  

Security for Payment of Benefits; Definitions [§3101]
Exception for Motorcycle Injuries [§3114(5)]

Not Applicable 

In this unanimous unpublished per curiam Opinion concerning a priority dispute over no-fault coverage for an accident involving a motorcycle and a motor vehicle, the Court of Appeals held the motorcycle operator’s no-fault insurer had the obligation to pay no-fault benefits because the driver of the involved motor vehicle was not a “named insured” on the vehicle’s no-fault policy, which “precluded the application of the PIP endorsement” to the motor vehicle.

Sarah Reynolds was driving a Saturn when she struck plaintiff on his motorcycle. Reynolds owned the Saturn and it was registered in her name. Plaintiff brought a claim to recover no-fault benefits from Citizens Insurance Company, which insured the Saturn under a policy issued to Sarah’s parents. Plaintiff also brought a claim to recover benefits from his own insurer, State Farm. However, State Farm asserted that Citizens was first in line for paying benefits under the policy it had issued Sarah’s parents, William and Deborah Reynolds. Both State Farm and Citizens moved for summary disposition. The trial court granted Citizens’ motion, finding that State Farm was liable for paying benefits.

Finding that Citizens was not the priority insurer under the policy it issued to Sarah’s parents, the Court of Appeals held that: 1) Sarah was not a “named insured” under the Citizens policy — her parents were; 2) the vehicle Sarah was driving did not meet the definition of “your covered auto” within the meaning of the Citizens policy; and 3) although Sarah was listed as a “principal driver” on the no-fault policy’s declaration sheet, this did not automatically mean that she was also a “named insured.”

To determine whether Citizens was Sarah’s insurer as a family member of the named insureds (her parents), the Court of Appeals examined the language of the Citizens policy. The court specifically looked at the policy’s definition of “insured” as it related to third-party claims, like plaintiff’s claim, in which there was an accident involving “your covered auto.” The court said:

“Sarah testified that she was the sole owner and registrant of the Saturn that she was driving when she collided with plaintiff. Therefore, Sarah was the only person required to maintain no-fault PIP insurance on the Saturn. … Because William and Deborah, the ‘named insureds,’ were not required to maintain no-fault PIP insurance on the Saturn, the Saturn did not meet the definition of ‘your covered auto’ within the meaning of the PIP coverage endorsement. It does not matter that the Saturn may be covered under the bodily injury liability coverage portion of the Citizens insurance contract because the PIP endorsement additionally required that the vehicle be one that the ‘named insureds’ were required to insure.”

The Court of Appeals further rejected the argument that because Sarah was listed as a “principal driver” on the declaration sheet of the policy, she had coverage. According to the court, it was clear that Citizens did not insure the “owner or registrant” or the “operator” of the vehicle that struck plaintiff. The court said:

“The applicable no-fault laws required that Sarah, as the owner and registrant of the Saturn, maintain PIP insurance on her automobile. … The parties’ apparent decision to include Sarah on the insurance policy as only a principal driver, and not as a named insured, precluded the application of the PIP endorsement to the Saturn.”

The Court of Appeals also held as inapplicable that section of the policy which would have provided benefits if Sarah was living with her parents and if she had been injured in the accident. According to the court, it was undisputed that Sarah was not living with her parents at the time of the accident and that she was not injured in the accident. Further, the court said that even if this section did apply, it would only provide benefits to Sarah, and not to plaintiff, as a third party.

Therefore, the Court of Appeals concluded the trial court properly ruled that State Farm was the highest priority insurer.

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

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