Titan Insurance v. American Country Insurance
312 Mich. App. 291
| Mich. Ct. App. | 2015Background
- Two consolidated appeals from motor-vehicle accidents involving uninsured vans used in the business of transporting passengers (Docket Nos. 319342 and 321598).
- Both injured drivers/operators (Hughes and Slack) lacked personal no-fault (PIP) policies; the accident vehicles were uninsured.
- Titan Insurance Company was assigned the claims by the Assigned Claims Plan and sought reimbursement from American Country Insurance, which insured other vehicles owned/registered to the same transportation companies (Safe Arrival and Bronco Express).
- Lower courts reached opposite results: in Docket No. 319342 the Wayne Circuit Court granted summary disposition for American Country (assigned insurer liable), while in Docket No. 321598 the Kalamazoo Circuit Court held American Country liable and affirmed the district court.
- Central statutory provision: MCL 500.3114 (priority rules for PIP benefits), particularly subsections (1), (2) and (4); dispute whether subsection (4) applies when subsection (2) would govern but the vehicle insurer is uninsured.
- The Court of Appeals reversed in Docket No. 319342 and affirmed in Docket No. 321598, holding that when coverage under subsections (1)–(3) is unavailable, subsection (4) governs and American Country (insuring other vehicles of the owners) is higher-priority.
Issues
| Issue | Plaintiff's Argument (Titan) | Defendant's Argument (American Country) | Held |
|---|---|---|---|
| Whether MCL 500.3114(4) applies when subsection (2) would govern but the vehicle insurer is uninsured | If subsections (1)–(3) would apply but no insurer is available, subsection (4) supplies the next priority; American Country (insuring other fleet vehicles) is liable | “Except as provided in subsections (1)–(3)” excludes subsection (4) when (2) is the controlling rule even if that insurer is nonexistent; assigned insurer remains liable | Court held subsections (1) and (4) operate in tandem: when coverage under (1)–(3) is unavailable, (4) governs; American Country is higher-priority and liable |
| Whether an insurer that did not insure the accident vehicle can be required to pay because it insured other vehicles of the same owner | The priority statute authorizes liability to an insurer that insures other vehicles of the owner/registrant under (4)(a) when (1)–(3) yield no available insurer | Imposing liability on an insurer that never assumed risk for the uninsured vehicle is improper — insurer did not underwrite that vehicle | Court concluded (4)(a) can impose liability on an insurer that covers other vehicles owned/registered by the same owner when no insurer is available under (1)–(3) |
| Whether the Assigned Claims Plan (MACP) remains insurer of last resort when vehicle insurer is uninsured | Titan (as assignee) sought reimbursement from higher-priority private insurer (American Country) under (4) before resorting to MACP | American Country argued assigned plan should cover because (2) was the only applicable subsection and it provided no insurer | Court determined MACP is not automatically sole payer if a private insurer exists in the priority order under (4) |
| Proper interpretive approach to the statute’s “except as provided” language | Titan: read to mean ‘‘if insurance is not available under subsections (1)–(3), then (4) applies’’ | American Country: reads the clause to bar (4) where (2) is the governing rule, even if uninsured | Court adopted Titan’s interpretation; avoided rendering (4) surplusage and followed precedent construing (1) and (4) together |
Key Cases Cited
- Vitale v. Auto Club Ins. Ass'n, 233 Mich. App. 539 (de novo review of statutory interpretation)
- Farmers Ins. Exch. v. Farm Bureau Gen. Ins. Co., 272 Mich. App. 106 (discusses interaction of MCL 500.3114 subsections)
- Pioneer State Mut. Ins. Co. v. Titan Ins. Co., 252 Mich. App. 330 (priority analysis when owner insured other vehicles)
- Cason v. Auto-Owners Ins. Co., 181 Mich. App. 600 (Assigned Claims Plan as insurer of last resort)
- Auto-Owners Ins. Co. v. Lombardi Food Serv., Inc., 137 Mich. App. 695 (when subsection exception applies but vehicle insurer is uninsured, injured party looks to personal insurer)
- Parks v. Detroit Auto Inter-Ins. Exch., 426 Mich. 191 (priority framework; instructive footnote directing parties to consider subsections 1–3 before 4)
- Frierson v. West Am. Ins. Co., 261 Mich. App. 732 (when exception insurers unidentifiable, general rule applies)
- Mich. Mut. Ins. Co. v. Farm Bureau Ins. Group, 183 Mich. App. 626 (when no insurance under subsection (1), subsection (4) applies)
- Belcher v. Aetna Cas. & Sur. Co., 409 Mich. 231 (policyholder-first rule under no-fault scheme)
- Auto-Owners Ins. Co. v. Churchman, 440 Mich. 560 (insurer liability limited to risks assumed)