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Bledsoe v Auto-Owners Insurance Company and National Union Fire Insurance Company of Pittsburgh; (COA-UNP, 4/24/2003, RB #2390)


Michigan Court of Appeals; Docket No. 236735, Unpublished
Judges Markey, Smolenski, and Meter; unanimous; per curiam
Official Michigan Reporter Citation: Not applicable, Link to Opinion alt

Definition of Owner [3101(2)(h)] 
Exclusion for Vehicles Considered Parked [3106(1)] 
Exception for Occupying [3106(1)(c)] 
Exception for Entering Into or Alighting From [3106(1)(c)] 
Exception for Employer Provided Vehicles [3114(3)] 
Exception to General Priority for Non-Occupants [3115(1)]

Uninsured Motorist Benefits: Physical Contact Requirement

In this unanimous unpublished per curiam opinion, the Court of Appeals determined a priority dispute between two insurers, where the determining issue was whether or not the plaintiff was an occupant of a parked truck at the time of the accident.

Auto-Owners insured Bledsoe Trucking for whom the plaintiff was driving a truck and hauling freight for CTX a freight broker. The plaintiff stopped the truck at customs on his re-entry from Canada, exited the vehicle to retrieve some change out of his pants pocket in order to pay a toll, at which point a quarter rolled underneath the truck. The plaintiff testified he knelt down to retrieve the quarter, balancing himself with one hand on the step of the truck. As he did so, a different truck ran over his right foot and pulled away.

Plaintiff claimed PIP benefits from both Auto-Owners, the insurer of Bledsoe Trucking, and National Union Fire Insurance Company, the insurer of CTX. Plaintiff also claimed uninsured motorist benefits from Auto-Owners.

With respect to the PIP claim, Auto-Owners conceded that plaintiff was entitled to PIP benefits, but denied responsibility, contending that plaintiff was not an “occupant” of the parked truck at the time of the accident within the meaning of section 3115(1), which provides that a person suffering accidental bodily injury while not an occupant of a motor vehicle shall claim personal protection insurance benefits from insurers of the “owners or registrants of motor vehicles involved in the accident.” Auto-Owners further argued that there were no applicable exceptions to the “parked vehicle exclusion” contained in 3106(1)(c), which states that accidental bodily injury for purposes of PIP does not arise out of the ownership, operation, maintenance, or use of a parked vehicle as a motor vehicle unless one of the exceptions contained in that statute applies. Specifically, Auto-Owners claimed that 3106(1)(c), one of the exceptions, did not apply because plaintiff did not sustain his injuries “while occupying, entering into, or alighting from the vehicle” as required by that statute.

Although the Court of Appeals agreed that looking solely to the provisions of the No-Fault Act, plaintiff was not an “occupant” of the vehicle for purposes of 3106, nor was he entering into or alighting from the vehicle at the time, nevertheless, the policy of insurance contained actual policy language which was broader than that mandated under the No-Fault Act. The Auto-Owners policy specifically provided for payment of PIP benefits for bodily injury arising out of the ownership, operation, maintenance, or use of a parked vehicle, unless “the bodily injury was sustained by the injured person while occupying the motor vehicle.” The policy endorsement further defined “occupying” as “in or upon or entering into or alighting from a motor vehicle.”

Relying on the previous Court of Appeals decision of Rednour v Hastings Mutual Insurance Company, 245 Mich App 419 (2001), the Court of Appeals stated that the term “upon” does not require that an object or person be positioned so that the object or person is totally and completely in contact with or supported by the underlying object or person. The court held that the facts of this case, viewed in the light most favorable to plaintiff, demonstrated that plaintiff qualified for the recovery of PIP benefits, because, according to his testimony, he was resting his hand on the truck in question and thus “occupying” it at the time of the accident.

The court then addressed Auto-Owners’ argument that Bledsoe Trucking, Auto-Owners’ insured, was not plaintiff’s employer nor the owner of the truck for purposes of MCL 500.3114(3) which provides that an employee suffering accidental bodily injury while an occupant of a motor vehicle owned or registered by the employer shall receive PIP benefits from the insurer of the furnished vehicle.

In this case, the truck had been leased to CTX for more than 30 days, therefore making CTX the statutory “owner” under MCL 500.3101(2)(g)(i) and (ii). The Court of Appeals held, however, that the phrase “owned or registered by the employer” in MCL 500.3114(3) indicates that the identity of the statutory owner is not dispositive of the issue of priority of payment of PIP benefits, but rather that the inquiry should center on the identity of the employer.

The court applied the “economic reality test” discussed in Parham v Preferred Risk Mutual Insurance Company, 124 Mich App 618 (1983), in order to determine plaintiff’s employer. The economic reality test looks to the totality of the circumstances surrounding the work performed and considers the following factors: (1) control of a 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 toward accomplishment of a common goal.

Addressing these factors, the court determined that both Bledsoe Trucking and CTX had some control over plaintiff’s duties. As to the second factor, plaintiff received his wages exclusively from Bledsoe Trucking. Further, Bledsoe Trucking had the ultimate authority to hire, fire, and discipline plaintiff. Finally, the evidence indicated that plaintiff’s performance of his duties was an integral part of Bledsoe Trucking but not an integral part of CTX. Considering all of the factors of the economic reality test, the Court of Appeals held that the trial court correctly found that Auto-Owners did insure plaintiff’s employer and, therefore, was liable for plaintiff’s PIP benefits.

With respect to plaintiff’s claim for uninsured motorist benefits, the court upheld the grant of summary disposition based upon language in the insurance policy requiring that the plaintiff occupy the insured vehicle. The policy did not define the term “occupying” with respect to the uninsured motorist portion of the policy. The Court of Appeals applied the generally understood meaning adopted by the Supreme Court in Rohlman v Hawkeye Security Insurance Company, 442 Mich 520 (1993), which held that someone is not an occupant unless he is “physically inside” the vehicle at the time of the accident. In this case, plaintiff was not physically inside the vehicle at the time of the accident and, therefore, is precluded from recovering uninsured motorist benefits from Auto-Owners.

[Editor’s Note: Note that Rednour v Hastings Mutual Insurance Company, 245 Mich App 419 (2001) [RB #2206], upon which the Court of Appeals relied, has since been reversed by the Michigan Supreme Court in Rednour v Hastings Mutual Insurance Company [RB #2357]. Note further that the Michigan Supreme Court remanded Bledsoe to the Court of Appeals for reconsideration in light of the Supreme Court’s decision in Rednour v Hastings Mutual Insurance Company, and the Court of Appeals decision in Bledsoe II reaffirming its first decision in this matter is summarized below [RB #2421].

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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