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Hamdi v Citizens Ins Co; (COA-UNP, 10/7/2014; RB #3372)


Michigan Court of Appeals; Docket #314255, #316334, #317008; Unpublished  
Judges Gleicher, Servitto, and Krause; Unanimous; Per Curiam 
Official Michigan Reporter Citation: Not Applicable; Link to Opinion alt  

Definition of Owner [§3101(2)(h)]
Definition of Registrant [§3101(2)(i)]
Exception for Employer Provided Vehicles [§3114(3)]

Not Applicable  

In this unanimous unpublished per curiam Opinion involving which insurer had priority under MCL 500.3114(3) to pay benefits to the driver of a tractor trailer, the Court of Appeals held that Citizens Insurance Company, which insured only the tractor through a policy issued to the owner of the tractor and trailer, was obligated to pay benefits to the injured driver.

In so ruling, the Court of Appeals reasoned that, at the time of the accident, the Citizens policy was the only “active” policy. And according to the court, “the insurer” is not connected to the employer but instead is tied to the “furnished vehicle,” which in this case was the tractor.

Plaintiff was injured while driving a tractor trailer in the course of his employment with Ayat Trucking. The tractor he was driving was owned by 2 M’s, but was leased to Ayat. Citizens insured the tractor under a policy obtained by 2 M’s and National insured the trailer under a policy obtained by Ayat. Plaintiff brought this action against Citizens, National, Ayat Trucking, and 2 M’s for no-fault benefits after Citizens and National denied his claims. Citizens and National disputed which insurer was liable for paying benefits. The trial court granted National’s motion for summary disposition, finding that Citizens was responsible for benefits as the first in priority insurer under §3114(3). After paying the benefits, Citizens filed an action against National, Ayat, and others alleging that National was the highest priority insurer, and sought reimbursement for the no-fault benefits that it had paid, in addition to recovery from Ayat, alleging that Ayat was required to insure both the tractor and the trailer. The trial court granted summary disposition for National based upon res judicata and collateral estoppel, and awarded it sanctions against Citizens for filing a frivolous claim.

Affirming the trial court’s ruling, the Court of Appeals said there was no dispute that Ayat owned both the tractor and the trailer and that Ayat was required to maintain insurance for both the tractor and the trailer. The court said:

“Ayat did obtain insurance on the … trailer through its National policy … [the day before the accident]. However, the … tractor was not added to the National policy until … [two days after the accident]. Thus, at the time of the accident, the only active policy of insurance on the tractor was a policy obtained by 2 M’s issued by Citizens. While Ayat may have had an obligation to obtain insurance on the tractor, the fact that it did not does not make National liable le. A court will not hold an insurance company liable for a risk that it did not assume.”

Finding that Citizens was liable for paying benefits, the Court of Appeals examined §3101 and §3114(3) and noted there was no dispute that plaintiff, the driver and an employee, suffered an accidental bodily injury and that he did so while “occupying” a motor vehicle. A tractor and a trailer are two separate vehicles pursuant to the No-Fault Act, the court said, which is evidenced by the fact that a tractor and a trailer must be separately insured.

According to the Court of Appeals:

“The tractor was owned by Hamdi’s employer, Ayat, by virtue of the 12 month lease under application of MCL 500.3101. Pursuant to MCL 500.3114(3), then, Hamdi ‘shall receive personal protection insurance benefits to which the employee is entitled from the insurer of the furnished vehicle.’ The insurer ‘of the furnished vehicle’ is Citizens, given that the furnished vehicle, i.e., the one Hamdi was occupying at the time of the accident and the one provided by his employer, was the tractor. There is simply no other way to read the plain and unambiguous language of this statute. Much as Citizens would like us to read the statute otherwise, ‘the insurer’ is not tied to the employer, but is, instead, tied to the furnished vehicle. … Clearly, the legislature recognizes a distinction between an insurer of a furnished vehicle and the insurer of an owner or registrant. Had the legislature intended MCL 500.3114(3) to apply to the insurer of the owner or registrant of the furnished vehicle it would have so stated. It did not. It explicitly stated that an injured party was entitled to PIP benefits simply from the insurer of the furnished vehicle. The insurer of the furnished vehicle is Citizens.”

The Court of Appeals rejected Citizens argument that case precedent supported its position that National should be considered first in priority. And while Citizens argued that its policy was a bobtail policy, the appeals court said this fact was “irrelevant.”

The court concluded:

“The relevant fact is that the injured party was occupying a motor vehicle owned or registered by his employer. … It is clear that National did not have a policy of insurance in place on the tractor and that Citizens did. Consistent with the relevant statutory language, Citizens, being the undeniable insurer of the tractor, is the first in priority under MCL 500.3114(3).”

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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