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State Farm Mutual Automobile Insurance Company v Houghtaling and Auto-Owners Insurance Company; (COA-UNP, 1/31/2006, RB #2667)


Michigan Court of Appeals; Docket #256815; Unpublished
Judges Fitzgerald, O’Connell, and Kelly; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion courthouse image

Exception for Employer Provided Vehicles [3114(3)]

Not applicable

In this unanimous unpublished per curiam opinion, the Court of Appeals reversed the trial court’s decision in which it found the claimant was an employee entitled to coverage under his employer’s no-fault insurance. The injured claimant in this case “chased cars.” Car chasers are hired by dealerships to pick up vehicles the dealerships purchase at auction. On one such trip, the claimant was involved in an accident in which he was seriously injured. Plaintiff, the claimant’s no-fault insurer, filed this action claiming the dealership’s no-fault insurer was liable under MCL 500.3114(3) because the claimant was an employee of the dealership.

In reversing the trial court’s decision, the Court of Appeals found that under the facts of this case the claimant was an independent contractor, not an employee. In so finding, the court applied the economic reality test in which the following four factors are considered: (1) control over the worker’s duties; (2) payment of wages; (3) right to hire, fire and discipline; and (4) performance of the duties as an integral part of the employer’s business towards the accomplishment of a common goal. Based on these factors, the court found the claimant set his own hours, he turned down assignments, could drive for other dealerships and the dealership did not withhold any taxes from his pay checks or provide him with benefits. In this regard, the court stated:

After considering the circumstances as a whole, we conclude that the trial court erred in concluding that Houghtaling was Sunrise’s employee. While Houghtaling characterized himself as Sunrise’s ‘number one call,’ he had the option to turn down Sunrise’s requests to drive and did so periodically. Moreover, Sunrise allowed Houghtaling to ‘chase cars’ for other dealers. He did not have set hours and was able to pick up vehicles essentially at any reasonable time after receiving a call from Sunrise. These facts indicate lack of control. Further, the drivers were paid a flat fee depending on the trip’s distance and all drivers were paid the same fee. Sunrise did not withhold any taxes from Houghtaling’s checks, did not provide him with benefits, and gave him a 1099 tax form at the end of each year instead of a W-2 tax form. These facts are indicative of the lack of an employer-employee relationship.”

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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