Adanalic v. Harco National Insurance Company
309 Mich. App. 173
| Mich. Ct. App. | 2015Background
- Plaintiff Salko Adanalic was injured while unloading a pallet from a disabled box truck to his semi-trailer using a ramp; the pallet fell and pulled him down.
- The box truck and semi-trailer were insured under a DIS policy with Harco (which had Michigan no-fault coverage); Adanalic had no-fault coverage through Millers under his wife’s policy.
- Adanalic sought PIP benefits from Millers and Harco; both denied coverage and suit followed; Spectrum Health Hospitals and Orthopaedic Associates intervened for medical charges.
- The trial court granted summary disposition for plaintiffs: Adanalic was entitled to PIP benefits, Millers (his personal insurer) was first in priority, Millers owed penalty interest, but trial court denied attorney fees.
- On appeal, the court affirmed entitlement to PIP benefits, affirmed that Millers had priority (Adanalic was an independent contractor, not an employee of DIS), affirmed penalty interest, but reversed the denial of attorney fees and remanded to calculate and award fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether injuries fall within parked-vehicle loading/unloading exception (MCL 500.3106(1)(b)) | Adanalic: was in physical contact with the pallet being loaded and his injury directly resulted from that contact | Millers: injury resulted from contact with the ground when he hit it; statute requires the property itself to inflict the injury | Court: Held exception satisfied — physical contact with the property that directly results (in an unbroken sequence) in injury qualifies; Millers’ narrower reading rejected |
| Whether workers’ compensation benefits were “available” so as to bar no-fault PIP (MCL 500.3106(2)) | Adanalic: DIS denied WC benefits; thus WC were not "available" and Millers must pay PIP promptly | Millers: alleged WC coverage available; so no-fault insurer may withhold PIP pending WC determination | Court: Held WC benefits were not “available” because DIS denied coverage; no-fault insurer cannot withhold PIP pending WC adjudication and may pursue subrogation/party-in-interest remedies |
| Which insurer has priority (employee vs independent contractor for MCL 500.3114(3)) | Adanalic: he was an independent contractor retained by DIS | Harco/Millers: argue employee status so Harco (owner’s insurer) would be priority | Court: Applied economic-reality test; found Adanalic was an independent contractor, so Millers (his personal insurer) is first in priority |
| Whether insurer’s denial/delay was unreasonable and entitled plaintiffs to attorney fees (MCL 500.3148) | Spectrum/Adanalic: Millers unreasonably refused/delayed payment and plaintiffs are entitled to statutory fees | Millers: denial raised legitimate questions of statutory construction (parked-vehicle exception and WC availability) | Court: Held Millers’ refusal was unreasonable on all grounds; reversed trial court and remanded for award and calculation of attorney fees |
Key Cases Cited
- Perez v. State Farm Mut. Auto. Ins. Co., 418 Mich 634 (Mich. 1984) (no-fault purpose requires prompt PIP payment; interplay with workers’ compensation)
- Auto-Owners Ins. Co. v. Amoco Production Co., 468 Mich 53 (Mich. 2003) (no-fault insurer is a party in interest in WC proceedings and may pursue subrogation)
- Moore v. Secura Ins., 482 Mich 507 (Mich. 2008) (standards for awarding attorney fees under MCL 500.3148)
- Ross v. Auto Club Group, 481 Mich 1 (Mich. 2008) (insurer bears burden to justify refusal/delay; legitimate statutory question defense)
- Winter v. Auto Club of Michigan, 433 Mich 446 (Mich. 1989) (limits of loading/unloading exception where object was not being loaded/unloaded)
- Arnold v. Auto-Owners Ins. Co., 84 Mich App 75 (Mich. Ct. App. 1978) (construction of MCL 500.3106(1)(b) into two independent clauses)