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Heichel v Geico Indemnity Co; (COA-UNP, 3/1/2016; RB # 3505)


Michigan Court of Appeals; Docket # 323818 and # 324045; Unpublished  
Judges Gleicher, Jansen, and Shapiro; Unanimous; Per Curiam  
Official Michigan Reporter Citation: Not Applicable; Link to Opinion   

Ways to Provide Required Security [§3101(4)]
Exception for Motorcycle Injuries [§3114(5)]

Not Applicable  

In this unanimous unpublished per curiam Opinion, the Court of Appeals held that a rental car owned by a non-resident that was driven in Michigan for less than 30 days was not subject to the No-Fault Act’s security provisions and therefore the owner, a self-insured entity, was not the highest priority insurer pursuant to MCL 500.3114.

Plaintiff was operating a motorcycle on a Michigan roadway when he was struck by a Ford Fusion rental car driven by Krzysztof Pietruczynik. Defendant EAN Holdings, LLC, owned the Ford Fusion, which was registered in North Carolina. EAN was a self-insured company, pursuant to MCL 500.3101(4). Defendant Geico Indemnity insured a vehicle owned by Pietruczynik and his wife, who also had a State Farm policy on another vehicle, on which Pietruczynik was a named insured. Accordingly, there were three potential no-fault insurers: EAN, Geico, and State Farm. EAN was the first to deny plaintiff’s claim for benefits. Plaintiff then brought an action against Geico, which joined State Farm as a party. Various medical providers later intervened, seeking reimbursement for services they provided plaintiff. The trial court summarily dismissed EAN from the case, finding it was not liable for benefits pursuant to Parks v Detroit Auto Inter-Ins Exch, 426 Mich 191 (1986). Geico and State Farm agreed to a consent judgment in favor of Heichel and the medical providers.

On appeal, Geico and State Farm argued that EAN was obligated to pay benefits pursuant to §3114(5), which governs benefits in motorcycle-vehicle accidents, because EAN’s self-insured status meant that it assumed the duties of a commercial insurer.  

The Court of Appeals rejected this argument and held that EAN was not liable for benefits because it was not subject to the security requirements of Michigan’s No-Fault Act and, as a result, the priority provisions of §3114(5) did not apply.

In so holding, the Court of Appeals noted that, under MCL 500.3102(1), an out-of-state vehicle owner must maintain security for the payment of no-fault benefits if he permits a vehicle to be operated in Michigan for more than 30 days, regardless of whether the vehicle is registered in Michigan.

However, Geico and State Farm argued that §3102(1) was inapplicable when a vehicle owner, like EAN, voluntarily filed a certificate attesting that it will provide “security equivalent to that afforded by a policy of insurance.” The Court of Appeals, citing Parks, disagreed with this argument and said:

“Despite EAN’s status as an insurer, the no-fault act simply did not apply to the Ford Fusion. … Consequently, declaring that EAN is an insurer under MCL 500.3114 does not dispose of the broader question: whether the priority provisions of MCL 500.3114(5) pertain at all. … Parks … instructs that the priority provisions set forth in § 3114 apply ‘only in the case in which the insured vehicle is required to be registered in this state.’ In Parks, as here, the involved vehicle was registered in a state other than Michigan and Michigan law did not require Michigan registration. … This fact was central to the Supreme Court’s conclusion in Parks that the vehicle owner could not be held liable for payment of PIP benefits because the involved vehicle ‘was not required to be registered in Michigan and was not subject to the security provisions of the no-fault act.’ … The Court explained that ‘the plain language of § 3101(1) subjects only those vehicles required to be registered in this state to the mandatory security requirements.’”

Based on the analysis in Parks, the Court of Appeals concluded:

“In Parks, the vehicle involved in the accident was owned by a self-insured nonresident company, was registered in another state, and was not required to be registered in Michigan. The same is true here. In Parks, another insurer contended that the nonresident vehicle owner was liable under MCL 500.3114, regardless of whether the no-fault act required the owner to maintain security on the vehicle. Again, the same is true here. In Parks, the Supreme Court rejected the complaining insurer’s argument, holding that the registration requirement set forth in § 3101(1) is the key to liability under the no-fault act. A vehicle that does not need to be registered in Michigan cannot trigger the application of the priority provisions set forth in MCL 500.3114. … This core holding underpins our decision in this case.”

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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