Auto-Owners Insurance v. All Star Lawn Specialists Plus, Inc.
303 Mich. App. 288
Mich. Ct. App.2013Background
- Plaintiff insurer Auto-Owners sought a declaratory judgment about which of its policies (workers’ compensation, commercial general liability, commercial auto) covered injuries sustained by Joseph Derry while working for All Star Lawn Specialists.
- Derry was injured when a leaf-vacuum machine tipped; he sued All Star and sought no-fault benefits; Auto-Owners sued to determine coverage, which turned on whether Derry was an "employee" under the WDCA (MCL 418.161(1)).
- Derry conceded he met the "service of another" prong but argued he was an independent contractor because he met elements of MCL 418.161(1)(n) (maintained a separate business; held himself out to the public).
- The trial court granted summary disposition for Derry, finding he was not an employee; a prior panel of this Court had affirmed under binding precedent Amerisure but noted it would have ruled differently.
- This special conflict panel reviewed whether the three criteria in MCL 418.161(1)(n) are conjunctive (all must be met to negate employee status) or disjunctive (any one suffices).
- The panel concluded all three criteria must be satisfied; because Derry met only two, he remained an employee and only the workers’ compensation policy applied; the judgments for coverage under the other two policies were reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MCL 418.161(1)(n) requires all three listed criteria to be satisfied to negate employee status | Auto-Owners: the three criteria are conjunctive; all must be met before a person is not an "employee" | Derry: any one of the three "does not" clauses suffices to remove employee status (Amerisure) | All three criteria must be met; Amerisure was overruled |
| Whether Derry was an "employee" under the WDCA at the time of injury | Auto-Owners: Derry was an employee because he did not satisfy all three criteria | Derry: he was an independent contractor because he held himself out to the public and maintained a separate business | Derry was an employee (met only two of three criteria) |
| Which Auto-Owners policies must provide coverage for Derry's injury | Auto-Owners: only workers’ compensation policy applies; other policies excluded workers’ comp claims | Derry: general liability and commercial auto policies applied | Only the workers’ compensation policy provides coverage; other policies exclude WC claims |
| Precedential effect of Amerisure on interpretation of §161(1)(n) | Auto-Owners: Amerisure misread the statute and should be overruled | Derry: Amerisure controls and supports disjunctive reading | Court overruled Amerisure and adopted conjunctive reading |
Key Cases Cited
- Auto-Owners Ins Co v All Star Lawn Specialists Plus, Inc, 301 Mich App 515 (2013) (prior panel opinion addressing employee status under §161 and applying Amerisure)
- Amerisure Ins Cos v Time Auto Transp, Inc, 196 Mich App 569 (1992) (interpreted §161(1)(n) as disjunctive; any one "not" clause negates employee status)
- Hoste v Shanty Creek Mgt, Inc, 459 Mich 561 (1999) (held subsections §161(1)(i) and (n) must be read together as necessary qualifications)
- Reed v Yackell, 473 Mich 520 (2005) (plurality restatement of §161(1)(n) in the positive suggesting all three conditions exclude employee status)