Fuller v. Geico Indemnity Co
872 N.W.2d 504
Mich. Ct. App.2015Background
- Saundra House rented a Lakeside Chevy Impala for one week while her personal car (insured by GEICO) was in the shop; she permitted Gregory Fuller to drive the rental.
- Gregory and passenger Patrice Fuller were injured in an accident while occupying the rental and sought first-party PIP benefits from House’s GEICO policy.
- GEICO denied the PIP claim, asserting Lakeside (the rental company) — as vehicle owner/registrant — was statutorily required to provide no-fault (PIP) coverage for the Impala.
- The Fullers sued GEICO for declaratory relief and alleged violation of the no-fault statute; Lakeside’s insurer was not notified within the one-year statutory window.
- The trial court (after clarification on rental duration) granted summary dismissal for GEICO; the court held Lakeside remained owner/registrant and could not contractually shift PIP responsibility to the renter.
- The Fullers’ equitable-estoppel claim failed because GEICO’s communications did not reasonably induce them to forgo notice to Lakeside’s insurer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GEICO (insurer of the renter’s personal vehicle) must pay PIP for occupants of a short-term rental | Fullers: GEICO’s policy covers permissive users and thus must pay PIP for injuries in the rental | GEICO: Policy’s PIP section only covers "insured autos" for which the named insured is required to maintain security; House was not owner/registrant of the rental | Held: GEICO not liable; Lakeside, as owner/registrant, was required to maintain PIP and cannot shift that duty to the renter’s insurer |
| Whether a rental agreement can make renter’s insurer primary for statutorily mandated coverage | Fullers: Contract terms and policy language should bind parties to make GEICO primary | GEICO: Statute and caselaw prevent owners from shifting mandatory no-fault responsibilities to renters | Held: Contractual attempts to shift mandatory coverage are void under precedent (rental owner must carry required coverage) |
| Whether GEICO is equitably estopped from denying coverage for failure to notify Lakeside’s insurer | Fullers: GEICO’s communications misled them into not timely notifying Lakeside’s insurer | GEICO: Correspondence did not represent deception; Fullers could and should have notified Lakeside’s insurer within one year | Held: Equitable estoppel not available; Fullers did not justifiably rely or show prejudice from GEICO’s communications |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. Enterprise Leasing Co., 452 Mich. 25 (Mich. 1996) (rental companies, as owners, must maintain mandated no-fault/residual liability insurance and may not shift that duty to renters)
- Citizens Ins. Co. v. Federated Mut. Ins. Co., 448 Mich. 225 (Mich. 1995) (owner/registrant is required to provide residual liability coverage; attempts to deny coverage to permissive users are void)
- McDonald v. State Farm Ins. Co., 480 Mich. 191 (Mich. 2008) (elements and narrow application of equitable estoppel against insurers)
- Maiden v. Rozwood, 461 Mich. 109 (Mich. 1999) (summary disposition standard; de novo review)