Sevan Maroky v. Encompass Indemnity Company
333489
| Mich. Ct. App. | Oct 19, 2017Background
- In 2013–2014 Maroky, sole member of Envoy Trucking, owned a >10,000 lb Peterbilt semi and leased it to ADM Transit under an owner-operator agreement; he hauled freight for ADM and was paid per loaded mile.
- ADM Transit carried a commercial "trucking" policy with OOIDA; that policy (as produced) included PIP coverage, and an endorsement attempted to exclude Maroky as a driver but lacked the statutory warning.
- Maroky purchased bobtail coverage for the truck from Hudson and had a personal auto policy with Encompass (defendant) that excluded injuries arising from use of vehicles ≥10,000 lbs or used for business.
- On January 22, 2014 Maroky was injured while hauling a load (driving the semi) in Texas; he incurred significant medical costs including $22,000 to Total Health Rehab.
- Maroky sued Encompass and Hudson for PIP; Hudson was dismissed with prejudice; a separate suit against OOIDA was later dismissed with prejudice under the one-year-back rule, MCL 500.3145.
- The trial court granted summary disposition for Encompass, holding OOIDA was the insurer of highest priority under MCL 500.3114(3); Maroky appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which insurer has priority to pay PIP under MCL 500.3114(3)? | Maroky argued Encompass (his personal policy) should cover or Besic is inapplicable. | Encompass argued OOIDA (ADM Transit’s commercial insurer) is highest priority under §3114(3). | Court: OOIDA is highest-priority insurer under MCL 500.3114(3) (Besic controls). |
| Is an OOIDA endorsement excluding Maroky effective? | Maroky asserted OOIDA excluded him (lower priority or no coverage). | Encompass argued exclusion applied; OOIDA argued exclusion valid. | Court: Exclusion invalid because endorsement lacked the MCL 500.3009(2) warning. |
| Does Encompass’s personal-policy exclusion (10,000 lb / business use) bar recovery and is it enforceable/public policy? | Maroky argued the exclusion should not preclude PIP or violates no-fault public policy. | Encompass argued its policy excludes coverage for large/business vehicles, so it has no liability. | Court: Did not reach public-policy challenge; because OOIDA is highest-priority payer, Encompass is not liable. |
Key Cases Cited
- Besic v. Citizens Ins. Co. of the Midwest, 290 Mich. App. 19 (2010) (applies MCL 500.3114(3) to owner-operator leasing facts and holds insurer of furnished vehicle is highest priority)
- Celina Mutual Ins. Co. v. Lake States Ins. Co., 452 Mich. 84 (1996) (broad reading of §3114(3) to allocate commercial vehicle injury costs to business insurer)
- Adanalic v. Harco Nat. Ins. Co., 309 Mich. App. 173 (2015) (applies economic-reality test to determine employee status where facts differ from owner-operator context)
- State Farm Mut. Auto Ins. Co. v. Sentry Ins., 91 Mich. App. 109 (1979) (explains legislative intent to place no-fault burden on commercial insurers in §3114(2)–(3) situations)