Auto-Owners Insurance v. Stenberg Bros.
575 N.W.2d 79
Mich. Ct. App.
1998
Check Treatment

*1 Stenberg Auto-Owners v Bros BROTHERS, AUTO-OWNERS INSURANCE COMPANY STENBERG INC 9, 1997, Marquette. Docket No. 198645. Submitted October at Decided 16, 1997, appeal sought. December at 9:05 A.M. Leave to Company brought Auto-Owners Insurance an action in the Delta Cir- against Stenberg cuit Court Ronald J. and Linda L. Budkis and Brothers, Inc., seeking regarding duty a declaration Auto-Owners’ liability policy covering Stenberg under a commercial insurance indemnify Stenberg against Brothers to defend and Brothers an negligence warranty action the Budkises for and of breach in connection with Ronald Budkis’ fall from tanker-trailer leased Stenberg employer. tanker-trailer, Brothers to Ronald Budkis’ The designed originally transport liquids, regis- used to was not solely tered as a motor vehicle and was as static tank for storage injury. policy at the time of Budkis’ The Auto-Owners automobiles, equipment, coverage excluded but not mobile from subject and defined “mobile as a vehicle not to motor registration. court, Payant, J., judg- vehicle John D. entered a defendants, ruling coverage in ment favor of the for the tanker- policy trailer was not excluded under the Auto-Owners because the qualified special equipment tanker-trailer as mobile under MCL 257.62; special equipment exempt MSA 9.1862 and mobile from 257.216(d); 9.1916(d). motor vehicle under MCL MSA appealed, appealed. Brothers cross Appeals The Court of held: 257.62; 1. MCL MSA 9.1862 defines as “every primarily transportation vehicle not or used persons property incidentally operated of or or moved over the highways.” definition, incidentally To meet a vehicle must be highways or moved over the and either must not be designed primarily transportation persons for or primarily transportation prop- must not be used for erty. case, qualifies special In equipment only incidentally highway because it was moved over a primarily transportation. and was not used for appeal by Stenberg 2. The cross Brothers need not be addressed light disposition appeal. of Auto-Owners’ Affirmed.

Opinion the Court only result, J., concurring stated that vehicles in the Bandstra, and are that are not highways operated moved over the can be 257.62; 9.1862, tanker- that the under MCL designed primarily and there- *2 trailer at issue was special equipment, that the tanker-trailer but fore cannot be equipment as defined nevertheless was covered subject policy to motor vehicle because it was not Auto-Owners stationary storage registration during its use as a tank. — — Exemption Special Equipment from Motor Vehi- Mobile Automobiles Registration. cle subject vehicle, to A in order to be vehicle, must be as a motor designed prima- highways, not be over the and either must moved persons rily or must not be used for property (MCL 257.62, for 9.1862, 9.1916[d]). 257.216[d];MSA Cotant, Aardema, (by Menkes & P.C. Bensinger, Auto-Owners Insurance Smith), Glenn W. Company. P.C. Filoramo, McNamara, (by Jarvi &

Olsen, Inc. Stenberg Brothers, Dennis D. Moffit), and Hood JJ. Murphy, P.J., Before: Bandstra, appeals Plaintiff as of the trial right P.J. Murphy, in in entry court’s favor of defendants judgment declaratory action. We affirm. judgment a tanker-trailer Stenberg Defendant Brothers leased for use as a tank. The Corporation storage to Mead tanker-trailer was built in 1955. It was so liquids bulk, and had been used to do transport 1987, 1987. Since the tanker-trailer has not been until solely storage as a tank. registered and has been Corporation, When Mead leased fifteen miles to its pulled public highway on a Corporation Mead was no and, destination when Stenberg Bros pul- longer tanker-trailer, it was to be in need of the way. During the course of the lease back the same led Corporation, Budkis, who defendant Ronald to Mead Corporation, allegedly sustained for Mead worked personal injuries falling ground a result of to the top Ronald of the tanker-trailer. Defendants from Stenberg L. Budkis sued defendant J. and Linda negligence asserting of war- Brothers, ranty. and breach Stenberg who was defendant Brothers’ Plaintiff, declaratory judgment insurer, commercial filed plaintiff asking for a determination whether action indemnify duty defendant had a to defend underlying action. The trial Brothers in the plaintiff duty ruled that did have a to defend court indemnify. agree. We liability policy general at issue in commercial following: the case at bar contained the “automobile *3 exclusion”: policy apply agreed

It is that the does not to the owner- ship, maintenance, operation, use, loading unloading or any by operated

(1) automobile owned or or rented or insured, loaned to the named or by any any person (2) in the other automobile employment by insured, course of his the named or any conveyed (3) being mobile while towed or by automobile, an any

(4) designed therewith; snowmobile or trailer for use apply parking of an auto- but this exclusion does not to the premises by, to or controlled mobile on owned rented ways immediately adjoining, if the named insured or the automobile not owned or rented to or loaned to such is the named insured. policy’s of “automobile” is “a land

The definition designed semi-trailer, vehicle, motor trailer or . . . public travel roads but does not include equipment.” policy, mobile to the a vehicle According if subject is “mobile it is “not to motor vehicle registration.” Therefore, policy, under the if a subject vehicle is not to motor vehicle it registration, equipment,” is “mobile and not an “automobile,” which means that the automobile exclusion does not apply plaintiff duty and has a to defend and indemnify.

Under Michigan law, type one of vehicle not sub- ject to motor vehicle is equipment.” MCL 257.216(d); 9.1916(d). There- fore, the determinative issue we must address whether qualified as “special mobile equipment” pursuant to MCL 257.62; MSA 9.1862. provides statute in part: The “Special every means vehicle not incidentally operated or moved over the highways, including tractors, farm road construction machinery, trailers, maintenance mobile office mobile tool trailers, shed housing mobile trailer units used for station- ary equipment, ditch-digging construction apparatus, well-boring well-servicing apparatus. foregoing partial operate enumeration shall be deemed and shall not general to exclude other such vehicles which are within the terms of this definition.

The trial court ruled that the tanker-trailer spe- cial equipment because, although it was transport property, at the time of the inci- *4 dent it was not being used in such a manner and was only incidentally operated on the On highway. appeal, plaintiff claims ruling that this was error. 49 v Bros plaintiff support claim, relies on Davidson

In of its (1957). Secretary 4;Mich 87 NW2d 131 State, 351 v of plaintiffs the Davidson, the issue whether In transport “batching con- which were used to trucks,” plant paving mixing and trav- to a site crete from a “special qualified public highways, eled over Supreme equipment.” in Court answered The stating: negative, the pri- (2) “batching (1) designed and

The tracks” were oper- marily property, (3) and their of open public roads to travel ation in 1955 over the service any Sfac-, 1 these was more than incidental. Existence of of tors, present, will the claimed all them here of defeat exemption. (emphasis added).] at 9 [Id. portion emphasized Plaintiff concentrates on the argues case, Davidson and that because transporta- “designed”primarily tanker-trailer was property, Supreme tion of one of the Court’s three exemption factors exists and the claimed is defeated.1 plain language There is a clear conflict between Supreme Court’s statement in of the statute plain regarding lan- Davidson the statute. Under the equip- guage special statute, a vehicle is ment if it is not or used for trans- portation incidentally moved or on the spe- highway. According Davidson, a vehicle is not prima- cial mobile if it is rily moved on NW2d 755 opinions See Community OAG, 1960, Attorney are not Hosp Authority No is based on the precedentially binding General has 3456, p adopted (April Supreme Michigan, 4, an 1960). interpretation Court’s statements However, Attorney Court. Chapman App 696, 702; in Davidson. General Peoples *5 App 50 227 Mich Opinion of the Court highway. The conflict can be illustrated as follows: designed under the if statute, the vehicle was for such special equipment use, it could still be mobile if it is only (and not used as such moved on highway); whereas, the under if Davidson, the vehicle special use, for such then it is not equipment actually no matter how it is used. problem appears regard The to be that in to the phrase “not or used,” statute, on its face, promotes disjunctive relationship between “designed” promotes “used,” whereas Davidson conjunctive relationship between the words. There- key interpretation fore, the to the conflict, is the to be placed appears on the word “or” as it in the statute. primary statutory goal of construction is to give Legisla ascertain and effect to the intent of the Livingston Dep’t ture. Co Bd Social Services v App Social Services, 208 Mich 402, 406; 529 NW2d308 (1995). language When the the statute is clear, that statute must be enforced as written. Id. In construing language every of a statute, word or phrase plain ordinary should be accorded its meaning unless defined in the statute. Id. The word generally “or” refers to a choice or alternative things. between two or more Root v Ins Co North App America, 214 Mich 106, 109; 542 NW2d (1995). popular “The use of ‘or’ and ‘and’is so loose frequently and so inaccurate that it has infected statu tory quoting Esperance enactments.” Id., v Chester Twp, 456, 460-461;280 NW2d 559 field interchangeable However, the words are not “ meaning and their strict ‘should be followed when reading their accurate does not render the sense dubi- Bros ” legislative to have intent no clear and there is ous’ conjunctive. Id. read in the words or clauses plain reading opinion, lan- of the a literal In our equipment special guage statute does of the not been dubious, and we have render the sense Legislature part glean of the on the an intent able to conjunctive. result, As a in the the words read to have plain language we think that interpretation an mandates statute *6 equip- special mobile will be deemed which a vehicle transportation primarily designed for is not ment if it incidentally operated property persons or or prima- highways, if it is not used or moved over the persons rily transportation and is or for highways. incidentally operated In over the or moved incidentally (1) must be vehicle words, the other operated (2) highway not moved over the or persons primarily designed for primarily property, (3) for presence (1) property; of factor of along (2) presence or factor factor of either with the exemption. qualify (3) In the will a vehicle only bar, at the tanker-trailer case primarily highway, and was not used over the moved plain transportation. lan- under the result, As a for qualifies guage as statute, exempt equipment special from the and is 257.216(d); requirements under MCL 9.1916(d). question answer is whether we must now conclusion. It an effect on this should have Davidson Supreme obligation mod- to overrule or Court’s is the Supreme ify until and unless law, and its case all lower action, this Court takes such Court App 227 Mich Supreme authority. courts are bound Court’s Boyd Wv G Wade Shows, 515, 523; 505 (1993). may properly express NW2d 544 This Court Supreme its belief that a decision of the Court was wrongly decided, but that conclusion does not excuse applying this Court from the rule of law from that question decision. However, Id. that is neither con- sidered nor essential to the resolution of a case is dic- People tum and does not establish a rule of law. Green, 205 342, Mich 346; 517 NW2d 782 opinion, language In our in Davidson relied upon by plaintiff was not essential to the resolution binding of Davidson and is therefore dictum and not upon Supreme suggests us. The Court’s statement designed primarily that if a vehicle was either or used transportation, qualify special for it does not as equipment.2 question However, the whether a qualifies vehicle when designed primarily that vehicle is either transportation was not at issue in Davidson because the vehicles in that case were and used as such. In other words, because the vehicles in David- transporta- son were and used *7 a tion, determination whether the “or” in “not disjunctive conjunctive or used” is or not essential to the resolution of the case. result, As a passage we dismiss the cited in Davidson as dictum opt applying plain language and the of the statute. In conclusion, because the tanker-trailer is not used primarily persons property of or incidentally tor on the use and [2] (3) We alone will defeat the agree used on roads with the design Supreme factors. open exemption; Court that the to public a vehicle must not be more than travel. presence Therefore, of Davidson’s fac our focus is Stenberg Bros v by Bandstra, J. Concurrence public highways, it is moved over is

and exempt registra- from and qualifies as “mobile Therefore, tion. policy equipment” the under an “automobile” and not policy’s exclusion automobile the result, As a at issue. duty plaintiff apply has a to defend does indemnify. plaintiff’s disposition we claim, of of our

Because appeal. cross not address defendant’s need Affirmed.

Hood, J., concurred. (concurring). in the result I concur J. Bandstra, by majority for a different reason. but reached the portion majority agree the of that I with the While Secretary 4;Mich 87 NW2d State, 351 Davidson of by plaintiff upon (1957), I con dictum, relied Supreme in Davidson reached Court clude that the statutory “special definition correct result. The carving limiting out definition, is a qualify. See those that the universe of vehicles from statutory lan Under 257.62; MCL 9.1862. qualify guage, determined that are the vehicles two-step process, that delineates vehicles which first transpor primarily for the are “not ,”1 persons From this cate . . . tation of ute does not vehicle the statute’s verbs analysis applies “[not] disjunctive I statute, compared agree would be considered used” may “not” to each of the rests on with the be use of the word improperly rather than determination majority’s opinion to that read “or” as conjunctive. as a “not” is to be following group majority, conjunctive. that verbs However, my applied. The if it is “not legislative intent was that the the word the “not” would individually, differs with Instead, my “or” is analysis designed” majority’s analysis meaning respect properly be property. of the analysis applicable or if it is that a read how stat My *8 54 227 Mich 45 by Concurrence J. Bandstra, gory subcategory vehicles, is smaller identified “special only constituting equipment,” i.e., “incidentally operated those vehicles are highways Accordingly, . moved over the . . if a vehi primarily transporta “designed cle is for the property,” tion of that vehicle is not category. If, however, included within the first a vehi category, “special cle it falls within this still fails to be equipment” “incidentally if it is more than highways.” or moved over the Under this analysis, Supreme the Court’s conclusion that any “[ejxistence of 1 of 3 factors . . these . will defeat exemption” supra the Davidson, claimed is correct. 2 at 9. “spe- The tanker-trailer at not issue case is cial mobile under the statute thus con- “designed strued. The tanker-trailer . . . property” . of . . does by category

fall within the of vehicles delineated the potentially falling statute as within the definition but only they “incidentally operated if are or moved over highways.” the agree majority’s I

Nonetheless, with the conclusion that the tanker-trailer is

Davidson dictum that has been Attorney to the verb means “neither [519] statute. I ble. standing NW2d 676 ble out, 1959-1960, [2] weight.” (September 5, 1962); OAG, Thus, these Both the above construction General on various issues. reject No opinions we group; thus, Aller v Detroit Police 3275, p are faced with majority’s analysis are not analysis the (January nor used.” “not precedentially binding Attorney two 1960, that of the basis 31, 1959). While, Dep’t logically supportable See, e.g., OAG, 1961-1962, No General “should be because it is inconsistent with the 3456, p Trial majority used” Bd, repeated [64] language as the (April 4, 1960); OAG, logically supporta opinions given analyses majority Court, 382, 386; No the considera 4031, p statute points long Stenberg Bros by Bandstra, J. Concurrence statutory *9 completely In its different reason. a Stenberg appeal, Brothers, Inc., defendant cross ruling argues in its in not trial court erred that the 257.216; 9.1916, of MCL MSA favor the basis provides “[e]very . . . when vehicle, motor which upon subject highway, to the is or moved a driven provisions registration . . . of this act. .” Defendant . . argues tanker-trailer was that the Brothers subject provision registration under to ordinarily regularly driven was not because it highway. Accordingly, upon the insur- a under moved policy, argues that the tanker-trailer ance defendant subject to “mobile because it is “not registration.” agree. I motor vehicle “subject registra- was to Whether the tanker-trailer depends not on it was tion” under the statute whether capable registered being it was but rather whether required registered be under statute. Reaver to App 343, 348; Mich 384 NW2d 156 Westwood, 148 language 257.216; the clear MCL Under “subject . . . the tanker-trailer was to 9.1916, MSA Corporation registration” was when it leased Mead upon highway” where it a to the location “moved storage However, was tank. used as requirement resulting that brief move could from fourteen-day “temporary with a have been satisfied registration” the tanker-trailer did not trans- because liquids during port MCL 257.226b; the move. Following 9.1926(2). move, tanker-trailer clearly stationary storage no tank and was used as “subject registration” longer under the statute. Accordingly, time at issue at the of the accident was “mobile case, the tanker-trailer by Bandstra, Concurrence J. as defined affirm insurance contract.3 I would because the trial court reached the correct result albeit for the wrong reason. Welch v Dist Court, 215 Mich App 253, 256; 545 NW2d 15 (1996).

3 The situation here is different than that found in Einerwold v Com plete Transit, Inc, Auto 521, 524; (1985), 377 NW2d 890 pickup regularly where a truck transport employees public used to highways from one lot to another.