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Michigan Head & Spine Institute, PC v Auto Club Ins Ass’n, et al; (COA-UNP, 9/4/2014; RB #3361)


Michigan Court of Appeals; Docket #313208; Unpublished  
Judges Murray, Jansen, and Shapiro; Unanimous; Per Curiam  
Official Michigan Reporter Citation: Not Applicable; Link to Opinion alt  

Definition of Owner [§3101(2)(h)]
General Rule of Priority [§3114(1)]
Exception for Employer Provided Vehicles [§3114(3)]

Not Applicable 

In this unanimous unpublished per curiam Opinion involving a priority dispute between insurers, the Court of Appeals held the trial court erroneously found that an injured driver’s personal auto insurer was liable for paying PIP benefits pursuant to MCL 500.3114(1). Instead, MCL 500.3114(3) applied in this case, the Court of Appeals ruled, because the injured driver was an employee who was operating a furnished business vehicle (truck) at the time of the accident. Accordingly, the Court of Appeals remanded the case to determine which trucking insurer was liable for benefits under §3114(3).
Plaintiff Michigan Head and Spine Institute treated Daher Al-Mayahi for injuries he suffered in an accident while driving a furnished business vehicle. Defendant ACIA insured Al-Mayahi’s personal vehicles. Al-Mayahi also had an occupational accident policy issued by defendant Great American. Under that policy, Great American paid approximately $90,000 in benefits to Al-Mayahi. Great American then sought reimbursement from ACIA for the benefits it had paid. The trial court held that, pursuant to MCL 500.3114(1), ACIA was first in priority for PIP benefits and granted summary disposition for Great American, denied ACIA’s motion for summary disposition, and ordered ACIA to reimburse Great American.

In reversing the trial court’s decision, the Court of Appeals said the trial court erroneously ruled the No-Fault Act was a “similar law” within the meaning of an exclusion in the injured driver’s occupational accident policy. The court said:

“That exclusion provided that no benefits would be payable with regard to any losses for which the insured ‘claims coverage under any workers’ compensation, employers’ liability, occupational disease or similar law.’ … The trial court determined that the no-fault statute was a ‘similar law’ within the meaning of the policy exclusion and that Great American was therefore not required to pay benefits to its insured. … We conclude that Michigan’s no-fault insurance scheme is not ‘similar’ in kind or purpose to the work-related and occupational laws listed in the exclusion. … The no-fault act provides personal injury and property protection benefits for those injured in motor vehicle accidents, irrespective of whether the accidents are work-related.”

The Court of Appeals then examined the subrogation clause in the injured driver’s occupational accident policy and said:

“Under the principle of subrogation, Great American, as subrogee, acquired no greater rights than those possessed by the subrogor, Al-Mayahi. … Since Al-Mayahi had no right to recover the benefits that he had already received from ACIA, Great American also lacked the right to recover those same benefits from ACIA. The trial court erred by ordering ACIA to reimburse Great American for benefits that ACIA had already paid to Great American’s insured and subrogor, Al-Mayahi.”

Regarding ACIA’s claim that it did not have priority as Al-Mayahi’s personal insurer, the Court of Appeals pointed out that Great American and Great West insured the business vehicle that Al-Mayahi was driving. The court stated:

“Pursuant to MCL 500.3114(3), when an ‘employee’ is involved in an … accident while occupying a vehicle ‘owned’ and ‘furnished’ by his ‘employer,’ the insurer of the furnished business vehicle, not the personal no-fault insurer, is highest in the order of priority. Further, our Supreme Court has held that, in a business vehicle accident involving injuries to a self-employed person, the highest priority rests on the business vehicle’s no-fault insurer, rather than on the injured person’s personal no-fault household policy. … In this case, therefore, the highest priority does not attach to ACIA, the insurer of Al-Mayahi’s personal vehicles, but to Great American or Great West, the insurers of the business truck. The trial court erred by ruling that Al-Mayahi’s personal no-fault provider had priority in this case.”

Furthermore, the Court of Appeals said the trial court improperly held that Bryant Transport was the owner of the truck and that Al-Mayahi, a self-employed individual, was not an employee of Bryant Transport. The court said:

“This holding was against the applicable statutory and case law. The no-fault act specifies that there can be more than one statutory owner of a vehicle. … In this case, Bryant Transport was an owner of the truck as the long-term lessee, … but was not the only owner. Good Trucking was also an owner as the truck’s titleholder and registrant. … Moreover, Al-Mayahi was an owner of the truck based upon his long-term possession, use, and operation of the truck. … Additionally, Al-Mayahi could be considered an equitable owner of the truck as the sole shareholder of Good Trucking. Al-Mayahi could also be considered an employee of the truck’s statutory owners. Al-Mayahi was his own employee as a self-employed independent contractor and also worked for his company, Good Trucking. … [B]ecause Al-Mayahi was self-employed, he does not have to qualify as an employee of all of the vehicle’s statutory owners for MCL 500.3114(3) to apply ….”

In conclusion, the Court of Appeals held that §3114(3) controlled and the trial court improperly relied on §3114(1) to determine insurer priority. The court said:

“Both our Supreme Court and this Court have held that MCL 500.3114(3) is the appropriate statutory section for determining priority in situations involving self-employed persons injured in a business vehicle. … Since Al-Mayahi was self-employed, MCL 500.3114(3) applies here. Under MCL 500.3114(3), priority for payment of the PIP benefits at issue falls upon the insurer of the furnished business vehicle, either Great American or Great West, and not on ACIA, insurer of Al-Mayahi’s personally-owned vehicles. Because the trial court erroneously found that ACIA had first priority to pay no-fault benefits, it did not proceed to determine priority between the two insurers of the business vehicles.”

Accordingly, the Court of Appeals reversed and remanded for a determination whether Great American or Great West had priority to pay benefits.

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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