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Fuller v GEICO Indemnity Co; (COA-PUB, 3/5/2015; RB #3414)


Michigan Court of Appeals; Docket #319665; Published  
Judges Gleicher, Cavanagh, and Fort Hood; Unanimous; Opinion by Judge Gleicher  
Official Michigan Reporter Citation: 309 Mich App 495; Link to Opinion   

Compulsory Insurance Requirements for Owners or Registrants of Motor Vehicles Required to Be Registered [§3101(1)]
Definition of Owner [§3101(2)(h)]
One-Year Notice Rule Limitation [§3145(1)]

Equitable Estoppel  

In this unanimous published Opinion written by Judge Gleicher, the Court of Appeals held that a rental car agency cannot shift the MCL 500.3101 mandate of maintaining no-fault onto the customers who rent vehicles for short periods of time.
Saundra House (not a party to this case) rented a vehicle from Lakeside Car Rental while her own car was being repaired. She let plaintiff Gregory Fuller drive the rental car and he was in an accident. Plaintiff Gregory Fuller and his passenger, plaintiff Patrice Fuller, were injured and claimed they were entitled to PIP benefits. Because neither plaintiff owned a vehicle nor was covered under a relative’s no-fault policy, plaintiffs sought PIP benefits from the GEICO policy that House had obtained for her personal vehicle (the vehicle being repaired). When defendant GEICO learned that Lakeside Car Rental owned the rental car that plaintiff was driving at the time of the accident, it claimed the no-fault insurer of the rental car was liable for PIP coverage. The trial court agreed with GEICO and dismissed plaintiffs’ action.

The Court of Appeals agreed with the trial court, finding that Lakeside Rental was required to maintain no-fault insurance on the rental car because it was the vehicle’s owner and registrant under §3101(1) and, therefore, its insurer was responsible for PIP benefits. The court said:

“Lakeside was prohibited from shifting that burden onto a short-term renter by State Farm Mut Auto Ins Co v Enterprise Leasing Co, 452 Mich 25; 549 NW2d 345 (1996). Accordingly, Lakeside’s insurer was liable to pay the Fullers’ PIP benefits, not GEICO as the insurer of House’s personal vehicle, and the circuit court properly dismissed plaintiffs’ claims.”

The Court of Appeals explained that eligibility for PIP coverage was governed by Section II of House’s GEICO policy. The court pointed out that, pursuant to the GEICO policy, plaintiffs were not the “named insureds” (House was the named insured) and plaintiffs were not in the vehicle covered by the GEICO policy (it was being repaired). The court said:

“GEICO gave ‘insured auto’ a particular definition for purposes of Section II. It is an auto (1) ‘with respect to which you are required to maintain’ no-fault coverage, and (2) ‘to which the Bodily Injury liability coverage policy applies,’ and (3) ‘for which a specific premium is charged.’ (Bold added.) ‘You’ is defined in the policy as only the named insured — House — and her spouse, if any.”

According to the Court of Appeals, House was not required to maintain no-fault insurance on the rented vehicle. As a result, the court said it was not an “insured auto” under the PIP benefits section of House’s GEICO policy.

Further, pursuant to §3101(2)(h), a person renting a car can only become the owner or registrant of that car if the rental term is more than 30 days, the Court of Appeals noted. In this case, House’s rental agreement was for one week and, therefore, Lakeside remained the owner and registrant of the vehicle “at all relevant times.” The court said:

“In its rental agreement, Lakeside attempted to shift the burden of paying PIP benefits onto its renters’ insurance providers. This is not permitted under Michigan law. … Lakeside could not avoid its insurance requirements and its contractual attempt to do so is void.”
In conclusion, the Court of Appeals said plaintiffs filed their action against the wrong insurer and it was too late for them to seek PIP benefits from another insurer because, under MCL 500.3145, notice must be given to an insurer within one year of the accident.

Michigan auto accident attorney 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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