934 N.W.2d 674
Mich.2019Background
- Matthew Dye was severely injured in a car accident while driving a BMW he had recently bought; his father registered the car in Dye’s name and purchased a no-fault policy that listed the father as the named insured.
- Esurance (father’s insurer) initially paid PIP benefits but contended GEICO (insurer for Dye’s household via his wife's policy) had priority; GEICO later denied coverage after the Court of Appeals published Barnes.
- Barnes held that when none of the owners maintains the required coverage, no owner may recover PIP benefits; that decision prompted GEICO to refuse settlement and to assert Dye was barred from PIP because he (an owner) did not obtain the insurance.
- Lower courts split: trial court awarded Dye PIP (finding father was owner/registrant or that coverage existed); the Court of Appeals reversed in part, siding with Barnes on registrant issue but remanding unresolved owner fact issues; the settlement-enforcement dispute between insurers remained undecided on appeal to the Supreme Court.
- Michigan Supreme Court granted limited review to resolve whether an owner/registrant must personally procure the insurance required by MCL 500.3101(1) to avoid the MCL 500.3113(b) PIP exclusion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an owner/registrant must personally purchase/no-fault policy to avoid MCL 500.3113(b) exclusion | Dye: No; what matters is that the vehicle was covered — insurance can be maintained by another person on the owner’s behalf | GEICO: Yes; the statute requires the owner/registrant to "maintain" security, meaning the owner (or an owner) must be the one to obtain/maintain the policy | Held: Owner/registrant need not personally purchase the policy; “maintain” does not require the owner to be the purchaser — coverage in effect for the vehicle suffices |
| Proper antecedent of “which” in MCL 500.3113(b) — vehicle or person? | Dye: “Which” refers to the vehicle; the exclusion attaches if the vehicle lacked required security | GEICO/Dissent: “Which” refers to the owner/registrant (person); the statute connects the owner’s duty to the vehicle via the person | Held: The phrase modifies the vehicle (last-antecedent rule and ordinary usage of “which”); exclusion refers to vehicles lacking security in effect |
| Whether Barnes (308 Mich App 1) correctly interpreted the statute and binds outcome | Dye: Barnes was wrongly decided and should be overruled insofar as it requires an owner to procure the policy | GEICO: Barnes was correct and should bar Dye from PIP because no owner procured coverage | Held: Barnes and related cases were overruled to the extent inconsistent with the Court’s holding that an owner need not personally obtain the policy |
| Whether this opinion resolves a separate settlement-enforcement dispute between Esurance and GEICO | Esurance sought enforcement of a settlement with GEICO | GEICO disputed that a binding agreement existed before Barnes published | Held: The Supreme Court did not disturb the Court of Appeals’ decision on the settlement-enforcement issue; that part of the Court of Appeals’ judgment remains intact |
Key Cases Cited
- Barnes v. Farmers Ins. Exch., 308 Mich. App. 1 (Mich. Ct. App. 2014) (Court of Appeals decision holding that when no owner maintains required coverage, no owner may recover PIP benefits)
- Iqbal v. Bristol West Ins. Group, 278 Mich. App. 31 (Mich. Ct. App. 2008) (Court of Appeals held that MCL 500.3113(b) ties required security to the vehicle and who procured the policy is irrelevant)
- Shavers v. Attorney General, 402 Mich. 554 (Mich. 1978) (discussing no-fault act purpose: assured, adequate, and prompt reparation and the system of compulsory insurance)
- Citizens Ins. Co. of Am. v. Federated Mut. Ins. Co., 448 Mich. 225 (Mich. 1995) (prior Michigan Supreme Court discussion of owner/registrant duties under no-fault act; clarified here not to mandate owner as purchaser)