800 F. Supp. 2d 877
E.D. Mich.2011Background
- Auto Club seeks reimbursement from Great American for MACF-paid no-fault benefits to Eric Joye stemming from a July 24, 2008 dirt-bike accident with a Freightliner in Detroit.
- Joye rode Warns's motorcycle on a public road without a license or motorcycle endorsement; the motorcycle had been reported stolen about two weeks earlier.
- Warns testified he did not grant permission to anyone to use the motorcycle; Joye believed he had permission to test-drive it, not steal it.
- Michigan no-fault statute Mich. Comp. Laws § 500.3113(a) excludes no-fault benefits where the vehicle was taken unlawfully unless the claimant reasonably believed entitlement to take/use the vehicle.
- Joye had a suspended license since 2003 and no plate or valid registration; Joye lacked insurance coverage for the injuries; Plaintiff paid over $150,000 in benefits.
- The court analyzes whether Joye’s taking was unlawful and whether the safe-harbor provision could avoid the exclusion, under Michigan law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Joye unlawfully took the motorcycle under § 500.3113(a). | Joye did not steal; there was no proof of theft or lack of consent. | Owner did not consent; taking was unlawful unless implied consent via unbroken permissive use. | Yes; Joye unlawfully took the motorcycle under § 500.3113(a). |
| Whether the safe-harbor provision can defeat the exclusion. | Possibly entitled to benefits if reasonably believed entitlement to take/use the vehicle. | No reasonable belief to use the vehicle given license status and absence of permission. | No; safe harbor not satisfied. |
| Whether Joye could reasonably believe he was entitled to use the motorcycle. | Reliance on implied permission via owner’s authorization chain. | No reasonable belief given lack of license, registration, and explicit permission. | No; Joye could not reasonably believe entitlement to use. |
Key Cases Cited
- Bronson Methodist Hospital v. Forshee, 198 Mich.App. 617, 499 N.W.2d 423 (Mich. Ct. App. 1993) (unbroken chain of permissive use may negate unlawful taking)
- Plumb, 766 N.W.2d 883 (Mich. Ct. App. 2009) (unlawful taking includes lack of consent or implied consent to take)
- Butterworth Hospital v. Farm Bureau Insurance Co., 570 N.W.2d 304 (Mich. Ct. App. 1997) (consent analysis in owner liability context informs § 500.3113(a) proper interpretation)
- Mester v. State Farm Mutual Insurance Co., 596 N.W.2d 205 (Mich. Ct. App. 1999) (unlawful taking does not require intent to permanently deprive)