*1 443 Mich v ALLSTATE INSURANCE COMPANY CLEVENGER 9). 6, Argued (Calendar May Decided No. No. 93890. Docket 8, September 1993. Ingham Clevenger brought in tort in the W. an action Clifford against Company, insurer the Allstate Insurance Circuit Court by and owned JoAnn R. Williams a vehicle that had been of Preece, Douglas injuries for suffered in a collision C. sold court, vehicle, by T. James Kail- the driven Preece. The with J., finding man, summary disposition plaintiff, granted for indemnify duty a to defend and Williams and that Allstate had Appeals, McDonald, and JJ. Preece. The Court of Hood (Griffin, P.J., unpublished opinion dissenting), reversed in an duty curiam, finding per. and in- Allstate had no to defend that demnify sale the vehicle had been made bona fide because by Preece, was thus relieved MCL Williams to and Williams arising negligent 257.240; from its use 9.1940 of permission give The to drive it. dissent and could not Preece of the noted remained that Williams required under the time of the accident and was vehicle at the it, remained no-fault to insure and that an act express policy terms at under the "owned automobile” (Docket accident, coverage provided time was No. 120223).Clevenger appeals. joined by opinion Boyle, an Chief Justice In Justice Levin, Griffin, Mallett, Cavanagh, and Justices and Supreme held: Court express language of the Under the facts the case and contract, duty indemnify has a and Williams Allstate defend underlying tort action. and Preece protection 1. The no-fault act was intended afford ownership, suffering arising persons injury out of the mainte- automobile, nance, an to the or use of automobile. death, liability coverage bodily injury, prop- for minimum requires erty damage an insurer to the Insurance Code permissive provide an insured extends to all drivers. case, express language 2. In this under the terms, agreed to its definitions of defend permissive named and Preece as driver Williams as a insured damages Nowhere in the out of accident. Ins v Allstate op Opinion the Court required legal is a named insured to have title to the vehicle declarations, described the definition of "owned vehicle.” provided Nor is is terminated when title to the Further, vehicle is transferred. was not canceled *2 voluntarily until after the accident. Because Williams remained registrant vehicle, the must to she be taken have complied statutory duty during with the to it insure the brief period permitted purchaser operate she the uninsured to on a public highway. Reversed and remanded. Riley, dissenting, Justice stated that the does
require question Allstate to defend or Preece. is policy, whether Preece was an insured under the not whether the automobile an was owned vehicle. Consistent the with "own,” ordinary meaning of a Williams made bona fide transfer vehicle, ownership, was an owner of the and thus no longer ability give permission retained the to use it. Preece to language, On basis the contract Preece not an was insured, insured: he was not a named was not a resident of household, permission Williams’ and did not or need of a have required insured to named use vehicle. That is necessarily finding compel to insure a vehicle does not registrant’s liability coverage applies residual a new to provision owner. Absent a of residual purchaser vehicle, coverage. for a of a covered there no such Brickley part Justice no took in the decision of this case. Boughton, McIntyre Sinas, Dramis, Brake, & Reisig, George (by P.C. T. R. Sinas David Brake), plaintiff. for the Cooper
Garan, Lucow, Miller, Becker, Seward, & (by Brickley, Borin, P.C. Mark James L. J. William Smiley),
C. for defendant. declaratory action, J. In issue this Boyle, company’s us is before whether the insurance obligations to its of an insured and driver automobile a tort action out of a head- assigned on collision terminated when the insured certificate title the driver and allowed the purchaser operate the vehicle with the insured’s registration plate, registration, We and insurance. Mich Opinion of the Court facts, the insurance
find that under these of the accident. in effect at time remained Accordingly, of the Court reverse decision we Appeals.
I Douglas Saturday, August 1, 1987, Preece On visit his to Dearborn to with and his wife traveled aunt and uncle. While request, they there, at Preece’s were aunt, Williams, offered to sell his JoAnn accepted Preece, the offer who her 1977 Pontiac to paid Wil- his aunt the automobile. and liams $100
signed of title her name the certificate gave it to it was late Preece.1 Because planned register day Saturday, Preece and a get registration plate car, and his own a new deposi- following Monday. insurance, In her *3 tion, Williams testified she did discuss registration plate, registration insur- certificate or any Preece, nor did she recall such ance with simply signed presence. in her She discussion husband, title her she certificate of whom details, take care of the final went assumed would Conversely, Preece outside Preece. testified with weekend, it Mrs. that because was the Williams registration he her told him that could drive with registration, plate, until and insurance he could Monday morning acquire when the his own on opened. Secretary of State’s office was When registration plate home, Preece left Williams’ was affixed to Pontiac and certificates registration glove remained insurance compartment. from Dearborn to Han-
On Preece’s drive home parties argue The do not certificate title was therefore, that, ownership properly did not transfer endorsed and Preece. Clevenger Ins op Opinion the Court County, over, in Jackson the radiator of the car requiring stop eight malfunctioned times to allow the that he six
engine to cool down and to add stops home, antifreeze. One of the was at a friend’s Shortly thereafter, where Preece consumed a beer. stopped party pur- Preece at a store where he six-pack chased a of sixteen ounce beer. After drinking stopped by beers, two Preece was a Jack- police County only son officer the car had operable headlight. securing one After Preece’s promise any not to drink more beer and to drive directly away, police home, a short distance way. officer allowed Preece to continue on his A later, few miles a head-on collision between Preece plaintiff, Clevenger, Clifford occurred allegedly when Preece The accident crossed over the center line. happened approximately at 2:00 a.m. Sunday, August 2, on 1987. injuries result, As a suffered and re- first-party personal injury protection ceived bene- policy covering fits under the no-fault his third-party He later vehicle. filed a tort claim 24.13135(1)2 500.3135(1); against under MCL Preece and Williams for residual had no insurance. Williams insured the car with the Allstate Insurance insurance
liability. Preece Company under no-fault policy. pol- Williams did not cancel the August icy days 6, 1987, until four after the colli- sion, and testified that she did not become aware until accident two weeks after occurred. plaintiff seeking filed the instant action declaratory judgment duty that Allstate had a defend and and Preece under Williams *4 policy. Clevenger Williams’ no-fault and Allstate 2 3135(1) provides "person subject Section that a remains to tort liability nance, ownership, for noneconomic loss caused his or her mainte only injured person or use of a motor vehicle if the has death, function, impairment body permanent suifered serious of disfigurement.” serious 646 Mich op Opinion the Court disposition. summary The for filed cross-motions in favor and denied trial court ruled of duty finding motion, that had a Allstate’s indemnify in Williams and Preece defend underlying action.
tort right appealed in the as of Allstate Defendant unpublished per Appeals. curium of In an Court (Docket opinion February 11, 1992 No. decided 120223), panel the lower court’s divided reversed summary disposi- grant Clevenger’s of motion majority had ruled that a bona fide sale tion. longer was no owned and that vehicle occurred she endorsed the certificate Williams after price, purchase title, full deliv- received the It to Preece. reasoned ered automobile longer the Williams was no owner statutorily vehicle, she relieved of was subsequent negligent operation any from duty vehicle, and, thus, Allstate had no indemnify Court also concluded Williams.3 The policy itself, Williams, for- under as the give requisite owner, Preece the mer could permission Mr. to drive automobile. Because "permissive Preece was driver” or an "other policy, as Allstate insured” defined Williams’ duty no to defend or him. had Judge Ann He that Jo dissented. noted Griffin remained the of the motor Williams required by and, such, no-fault vehicle was that, dissent act to insure the vehicle. The noted importantly, an more remained according express to the "owned automobile” pro- and thus was terms at the time the occurred. vided accident (1993). appeal. granted leave to Mich We argument Appeals, At oral in the Court conceded that Williams, duty policyholder, has a defend its JoAnn it underlying argue tort It does not that issue before this Court. action. *5 651 Ins v Opinion Court
II enacting purpose legislative the no-fault The protection liability to to afford act4 was automobile persons suffering injury out of the owner ship, automobile, maintenance, Co use of an 300, 424 Fox, 309; NW2d 425 Mich burn (1986), protection of the automobile and not for DAIIE, 505, 509; 315 NW2d 412 Mich itself, vLee (1982). act, personal both Michigan’s no-fault Under (pip) liability insur- and residual protection injury coverage pro- to required. Insurance is now ance tect oneself from pip through injury the costs of parties third protect injured to benefits through compulsory. is liability insurance residual are requirements violating the no-fault Persons 500.3102(2); penalty. subject to a criminal 24.13102(2). residual Legislature to make by the The decision the no-fault coverage compulsory under liability 1973, purchased motorists Before is critical. act insurance the no- Under protect to themselves. pip liability act, Legislature requires fault at public protect the members of insurance accidents.[5] ravages of automobile large from the Emphasis supra. [Coburn, added.] obligation argues has an that Allstate Plaintiff Preece Williams and defend and underlying because under its tort action the Williams, car, was re- of the quired insurance on maintain statute to etseq. etseq.-, MSA 24.13131 4 MCL 500.3131 attempt context, persuaded by Allstate’s we are In this injury first-party personal from residual distinguish benefits balance, we do in his Legislature but strike a different could benefits. Judge Griffin As noted that it has done so. not believe supports such dissent, nothing no-fault act "[t]here statutorily required insurance.” fragmented 443 Mich Opinion of the Court did not addition, Williams In vehicle. according accident, before cancel agreement, language express at the time of in effect remained collision. August 1, 1987, after
Allstate contends *6 longer the owner of vehicle. no the Williams was indemnify argues dam- her for need It ages arising the motor out of the accident immunity grants from code her negligent operation resulting the from Preece’s policy argues that the also Allstate automobile. ceased to be time Williams at the terminated therefore, no It, has of the vehicle. titled owner indemnify duty Preece to defend or contractual against "permissive Cle- of the vehicle driver” arguments parties’ venger’s We address claim. in inverse order.
A requires vehi- that a motor Code The Insurance provide minimum its insured with insurer cle bodily injury, coverage liability property permissive death, and damage. extend to all This must expressly person unless the drivers policy or the declara- the face of excluded on page insurance. See or certification of tion 24.13009. 500.3009; MSA agreed policy, in- to Allstate Under Williams’ damages demnify "all the insured for and defend obligated legally shall be which the insured pay ownership, arising mainte- . . . out of . . . .” automobile or use ... owned nance The policy expressly persons covered under "[a]ny insured,” other the "named included pro- respect person automobile, owned to the with permission of the the use thereof is with vided Ins Opinion op the Court scope named insured and within the such permission agreement . . . further defined " ” 'named insured’ as "the in individual named spouse declarations, and his if a of the resident . . . same household The Williams’ was L. issued James Williams and because JoAnn spouse,
Williams, household, his resided within the she was also a "named considered insured.” The insurance also defined the term " ” 'owned automobile’ as "the vehicle described case, the declarations . . . .” In this the vehicle listed on the declaration sheet the 1977 was Pon- tiac.
Following express language of the contract, its definitions of as used in the terms agreed insurer sured, and defend the in- permissive if either named or drivers within scope permission, damages of such for all legally obligated pay the insured was out of the ownership, maintenance, or use *7 automobile, owned ration sheet. and which was listed on the decla- agreed Therefore, defend insured) (a JoAnn Williams named driver) (a Douglas permissive and ages they Preece for dam- legally obligated pay are as a result of the accident 1977 out of Preece’s use of the (the Pontiac vehicle listed on the declaration sheet) him when Williams allowed to drive the 1977 to his home. Pontiac assigned
Allstate asserts that because Williams Preece, the certificate of title to the vehicle was no longer policy. an "owned under It vehicle” general points to the conditions section of the policy applies contract, "[t]his which states that only automobile, to losses to the accidents and during period occurrences, applies] . . [and only . respects as the owned automobile while it is owned as stated in the declarations.” Mich 646 443 Opinion of the Court gen- to the adhered consistently Court has
This to insurance applicable of construction eral rule insur- in an provision ambiguous that an policies the draft- against construed contract must be ance However, the insured. in favor of insurer and ing unambiguous, clear and provision if is in their and understood taken terms are be Bureau sense. Farm popular ordinary, plain, Stark, 437 Mich 175, Michigan v Mutual Ins Co of v Farm (1991). In Raska 181; 468 NW2d 355, Michigan, Co of 412 Mich Bureau Mutual Ins (1982), explained: we 362; 314 NW2d ambiguous its to be when A contract is said in understood different reasonably be may words ways. contract of insur- reading of the entire
If a fair there is cover- leads one to understand ance and another particular circumstances age under there is reading one to understand leads fair circumstances coverage under the same no ambiguous and should be construed is contract against coverage. drafter and favor its Co, 368 Mich Life Ins Gorham v Peerless See also Century Indemnity (1962); 335, 343; 118 NW2d Schmick, 351 Mich 622, 626-627; 88 NW2d vCo (1958). is the observe nowhere We the named security upon conditioned promised long As title to the vehicle. having legal insured ad- of the contract are terms and conditions not canceled hered to and insured, coverage is afforded to or the insurer *8 the "vehicle vehicle,” it defines as which "owned described, Moreover, note we in the declarations.” general the recognize fails to that Allstate Ins Allstate Opinion of the Court section, on to which relies above conditions policy’s application, also limits of the define the canceling provides requisite the the conditions policy: by may policy this The named insured cancel stating when
mailing to Allstate written notice effective, shall be Allstate or thereafter such cancellation any by to of its policy the surrender of agents so, and, if shall be authorized cancellation [Emphasis surrender.[6] at the time of effective added.] liability coverage does state the title to vehicle named
terminated when
passes
an-
the
vehicle”
declarations as
"owned
Although
policy’s
person.
find the
cancel-
we
other
unambiguous
requir-
provision
as
lation
ing
clear
notify
the
the
Allstate that
vehicle’s
insured
any
coverage
discontinued,
be
should
insurance
ambiguity,
argued
concerning
by
coverage, must
con-
termination of
be
limits and
against
in
of the title
the insurer. Transfer
strued
liability.
case
not terminate
insurer’s
this
did
August
1987,
6,
notified Allstate on
Williams
canceling
on
Pontiac
that she was
the declara-
vehicle listed on
she sold the
from
the automobile
tion sheet. Allstate removed
August
7, 1987. Because
effective
Williams’
covering
the Pontiac was still
occurred,
the accident
effect at
in
time.
policy,
express
August
1987,
2,
terms
indemnify,
obligated
if
to defend and
Allstate is
underlying
necessary,
and Preece in
Williams
policy, subject
right
also retains the
cancel
6 The insurer
Code,
mailing
Michigan
chapters
Insurance
30 and 32 of
insured
declarations.
the notice to the
named
*9
656
646
443 Mich
Opinion of the Court
rights
obligations
tort action.7 The
parties vested at the time of the
v
accident. Cason
App
Co,
600, 609;
181
Auto-Owners Ins
Mich
(1989);
League
Co,
NW2d 6
Madar v
General Ins
(1986).
App 734,
742;
Mich
B Alternatively, argues that, defendant Allstate vehicle, 257.240; seller of a motor MCL MSA provides immunity 9.1940 Mrs. Williams from damages arising negligent operation out of a properly vehicle after she endorsed the certificate Additionally, of title to Preece. because Mrs. Wil- longer longer holder, liams was no the title she no had an in "insurable interest” the automobile. Plaintiff counters that if even Mrs. Williams was regis- vehicle, not the titled owner of the as the statutorily obligated trant, she was to insure the vehicle. underlying legisla-
Our task is to determine the
purpose
examining
tive
behind the no-fault act
provisions
various
of the act and other relevant
statutory provisions, and to harmonize different
provisions
construing
of the same statute
stat-
pari
give
utes
materia to
the fullest effect to
provision.
DAIIE,
each
191, 199;
Parks v
426 Mich
(1986).
agree
NW2d
We
with the Court of
7Contrary
Appeals
to the Court of
reliance on Allstate Ins Co v
Demps,
168;
(1984),
App
Long
133 Mich
that at the
24.13101(1)
500.3101(1);
provided:9
MSA
registrant
a motor vehicle
of
The owner
this state shall
registered in
main-
required
be
per-
payment of
for
benefits under
security
tain
insurance,
property
protection
protection
sonal
insurance,
insurance. Secu-
liability
residual
during the
continuously
in
shall
effect
rity
be
period
registration
the motor vehicle.
of
of
[Em-
phasis added.]
Legislature imposed
Moreover,
criminal sanc-
registrant’s
insur-
a
failure to maintain
for
tions
required by §
3101(1):_
ance
257.240;
9.1940,
provides:
statute
MSA
the owner’s
sale
made a bona fide
a motor vehicle who has
The owner of
who has delivered
of his title or interest and
transfer
possession
properly
of title thereto
of
vehicle and the certificate
such
purchaser
not be
to the
or transferee shall
endorsed
resulting
negligent
damages
any
from
thereafter
for
liable
operation
by another.
of such vehicle
damage
to a
an affirmative defense
240 affords
seller
While §
sale,
subsequent
negligence
it is
out of
claim
dispositive
right
an
and the
between
insurer
indemnification
registration plate from
the seller to remove the
Failure of
insured.
the
application
preclude
of 240.
§
after its sale does
Long,
supra
at 70.
n
applicable provisions
the no-fault act and the
sale of the
review the
We
they
at the time
code as
existed
motor vehicle
automobile,
1,
August
1987.
443 Mich Opinion of the Court
An owner or
of a motor vehicle with
respect
security
required,
to which
operates
is
who
permits
operated
motor vehicle or
to be
upon
public highway
in this state without hav-
ing in full force and
security complying
effect
with
this section or section 3101 or 3103
guilty
is
of a
a
Any
person
operates
misdemeanor.
motor vehicle
state with
other
who
upon
public
highway in the this
knowledge
regis-
that
the owner or
trant
security
does not have
in full force and effect
guilty
person
of a
A
misdemeanor.
convicted of a
misdemeanor under this section shall be fined not
$500,
less than
nor
imprisoned
more than
$200
year,
not more than 1
500.3102(2);
or both. [MCL
24.13102(2). Emphasis
added.]
pointed
As
out by Judge
Griffin
dissent,
his
the Court
has previously
determined
terms
"registrant,”
"owner” and
as used in the no-
act,
fault
are not
synonymous
represent
sepa-
rate categories
individuals, Cason,
supra at 606-
607; Allstate
Co,
Ins Co v Sentry Ins
191 Mich App
66,
(1991).10
69;
Further review of the motor vehicle code reveals a registration *11 certificate must be carried at all times in the automobile refers, to which it MCL 257.223; 9.1923, MSA and that it is unlawful for a 500.3115(l)(a); 24.13115(l)(a), See requires also MCL MSA which persons suffering injury occupant that shall while not an of a motor vehicle pip registrants first claim benefits from of owners or "[i]nsurers of motor vehicles involved in the accident.” 9.1916(1) 257.216(1); MCL MSA was amended after the accident in 214, by this case 1988 PA which added: days immediately following For 3 properly the date of a assigned any person dealer, title from other than a vehicle a registration need not be obtained for a motor vehicle driven or upon highway purpose moved transporting the for the sole of place purchase the vehicle in the most direct route from the of place storage
to a the of possession if the driver has in his or her assigned title and a dated bill of sale. Later, 1992 preceding PA 102 deleted the word "motor” "vehicle Ins v Allstate Opinion of the Court drive, knowingly permit to or an owner to person required to be driven, vehicle is any to be which 257.215; MCL registered registered, but is for renewal application 9.1915. Every MSA a certif- accompanied by be valid registration must 257.227; MCL MSA 9.1927. icate of insurance. encompasses for situa- provisions The code also registered the vehicle sold: tions which registered vehicle transfers or If the owner of a vehicle, in the assigns the title or interest registration plates issued for the vehicle shall be family to an immediate removed [transferred to title in also is trans- member whom ferred], the vehicle preserved or and owner retained application upon vehicle transfer another 257.233(1); required payment of the fees. [MCL 9.1933(1).] be plate cannot transferred registration A vehicle’s not an immedi- a new owner who is assigned or However, registration family ate member. vehicle owned transferred to another plate may be imme- assigned an may or be act, member, if the provided as family diate Secretary do so is filed with application to assign- transfer or days within fifteen State assignment for transfer or ment. If application required within the 233 is made pursuant § time, registration is considered without repossess may of State Secretary 257.234; MSA 9.1934. registration plate. title, appli- an receiving properly endorsed Upon moved,” "showing "and the date sale” for and substituted driven bill of a dated sale.” display- interpret provision exempting the vehicle from We this purpose registration ing possessing for a limited valid number however, not, purchase period, its date. It does a limited after and exempt carrying requisite no-fault on the owner from *12 the vehicle. 443 Mich Opinion op the Court registration, cation for transfer of the required Secretary fees, of State will transfer registration registration under its number to newly acquired regis- vehicle issue a new tration 257.237; certification and certificate title. MCL 9.1937.
MSA registrations The unlawful use of is also dis- Except cussed in provided vehicle code. as otherwise person operate, act, must nor knowingly permit operated shall an owner upon any highway, to be required regis-
a vehicle to be displayed tered unless there attached to and on registration plate the vehicle a valid issued for the 9.1955(1). 257.255(1); person vehicle. MCL A permit registra- also must not or use lend of a plate person receiving tion using to him if issued plate
the certificate or would be entitled 257.256; to its use. MCL MSA 9.1956.
Finally, provides 257.236; MSA 9.1938 registered when the of a owner vehicle dies and ownership passes by operation registra- law, plate assigned tion to the vehicle shall be consid- registration ered a valid until the end of the registration year ownership or until of the vehicle is transferred. provisions
We read these of the vehicle code pari the no-fault insurance act in materia as indi- cating unexpired registration plate that an affixed presumptive to the the vehicle is serves evidence that validly registered Secretary with the statutorily State, and that carries the man- logically dated no-fault automobile insurance. It destroy presumption, ap- follows that propriate course action after the sale of a vehi- registration cle is for the seller to remove plate registration and the certificates of and insur- case, ance from the automobile. In this Mrs. Wil- liams failed to do so. A reasonable inference can *13 661 v Ins Opinion of Court voluntarily remained the Williams be made that by insuring registrant Pontiac, as evidenced of allowing by testimony Preece to take the possession - operate public vehicle on a highway plate her her and with with attached registration in the of insurance and certificates glove compartment. Moreover, fail- Williams’ Mrs. title did not excuse ure to retain automobile legislative require- compliance any with other her may the no-fault insur- she have had under ments permit- registrant a vehicle she act. As the ance ted to be upon public highway, operated Mrs. provide required by resi- the act to Williams was liability on the vehicle under the dual sanctions, §§ and 3102. In 3101 of criminal threat context, insurable in- this Mrs. Williams’ limited ownership contingent upon title terest was not to niary upon personal pecu- rather, but, automobile by damage statute itself. the no-fault created argument reject Allstate’s Mrs. Thus, Williams, we registrant Pontiac, had no because she was "insurable interest” Judge longer As holder. noted no title in his dissent: Griffin insure, statutory duty the no-fault As previous superseded have our
provisions at issue only creates Our no-fault act not common law. insurance, establishes new types of also new See, generally, to insure. responsibilities broader General, 554; Attorney 402 Mich Shavers (1978). main duty NW2d tain registered on a statutorily required insurance responsibilities new created of the vehicle by one act.[12] the no-fault voluntarily short, remained she In insuring registrant automobile, Mrs. Wil- Lee, 515; Madar, supra supra at at 736-741. See also 443 Mich Dissenting Opinion Riley, J. complied
liams must be taken to have with the compulsory insurance statute whether she in- supported by tended to or not. Our conclusion is overriding, strong public policy Legis- and the operated lature’s mandate that vehicles not be on Michigan’s highways personal protection without property protection insurance, insurance, and resi- dual insurance.
III *14 unique that, We conclude under the facts of this duty case, indemnify, Allstate has a to defend and necessary, if lying Williams and Preece in the under- express
tort action on the basis of the lan- guage regis- of its contract with the insured. As intentionally automobile, trant of not, Williams, or complied with the no-fault statute and insured during the vehicle as the of the vehicle period permitted pur- the brief she the uninsured operate public highway. chaser it on a Accordingly, we reverse the decision of the Appeals Court of and remand the case to the trial proceedings court for further consistent with this opinion. C.J., Cavanagh, Levin, and Griffin, JJ., Mallett, J. Boyle, concurred with (dissenting). agree Riley, J. I with the conclusion majority of the policy that the no-fault between Williams and Allstate remained effect involving plaintiff at the time of the accident policy provision provided Preece. No for cancella- upon tion requirements policy transfer of vehicle, and the by
for cancellation were not satisfied Williams until after the accident. The existence of policy between Allstate, Williams however, Allstate Ins Riley, J. Dissenting Opinion policy whether not determine the issue does provides Preece, vehicle’s new I do not believe that owner. Because requires Mr. to defend or respectfully Preece, I dissent.
I policy between Allstate The no-fault insurance provides payment "for be made and Williams damages that "the insured for all an insured” obligated pay legally because shall be any person injury bodily . sustained . . ownership, maintenance . . . out of the or a non-owned ... of the owned automobile use coverage is whether Mr. The crux of automobile.” insured,” the automo- not whether Preece is "an general under is an "owned automobile” bile assuming policy. Even definitions an "owned automobile” continued to be automobile declarations, if Mr. it was described insured,” the is not considered "an Preece does not apply to his use of the vehicle. respéct vehicle,” the to the "owned
With persons under the residual who are insured defines *15 provision liability insured, a resident as the named permis- any household, or insured’s of the named scope permission. I am of that sive within user person, persuaded Williams, here when a ownership to an- fide transfer makes bona longer retains other, Preece, no the seller give permission ability the vehicle. Plain- to use argues a distinct automobile” has that "owned tiff by policy, meaning therefore as defined then Plaintiff the sold vehicle. still covers argues considered the automobile is that because may give permission it. I to use "owned,” Williams given two be should not believe that "owned” do 443 Mich by Dissenting Opinion Riley, J. meanings. distinct The "owned is automobile” declarations, one described in the it does not con- ordinary meaning note the of "own:” "To have a good legal property; legal title; to hold as to have a rightful possess.” to; have; title Black’s (6th ed), Dictionary p Upon Law 1105. the sale to possession Preece, Williams ceded title and of the Upon longer required, sale, vehicle. Preece no grant, permission and Williams could not to use the vehicle. permissive
The difference between a driver and apparent a transferee is also from the risk of liability retained the transferor. As noted majority, may 657, ante at an owner be held negligent driving permissive liable for the of a sold, however, user. If the vehicle is the former liability. owner is immune from tort 257.240; might MSA 9.1940. An owner therefore sell the give vehicle to someone to whom she would not permission ownership if were retained. language,
On the basis of the contract I would insured, find that Preece is not an not a named he is insured, a resident of the Williams’ permission household, and he did not have or need of a named insured to use the vehicle. The terms require therefore do not Allstate to any or defend Preece in lawsuit out of the use of the owned automobile.
II
Moreover, I do not believe that a different result
required by
statute. The Insurance Code re-
quires
an owner or
of a motor vehicle to
opera-
maintain residual
insurance, and
security
tion of a vehicle without such
ais misde-
*16
Ins Co
v
Dissenting Opinion
Riley, J.
required
to insure
That a
meanor.1
necessarily compel
registered
vehicle does
registrant’s
finding
residual
a
Although
coverage applies
case
to a new owner.
registrant’s
coverage
provides
authority
of
for
disagree
ownership,
pip
regardless
I
liability coverage
majority that residual
with
is also
primarily
pip
finding
coverage rely
required.
Cases
applicable
statutory
that are
on
sections
pip
only
benefits,
does not
and the no-fault act
priority
provide
rules for
similar
liability insurers.2
residual
505;
DAIIE,
identifying prior- entitled and the thereto ity of insurers. Appeals
Several decisions of the Court of
simi
pip
larly
injured party may
hold that an
recover
pursuant
policy
benefits
to the no-fault
of a seller
ownership.
who has
made
valid transfer of
In
League
App
Co,
Madar v
General Ins
152 Mich
(1986),
734;
While liability coverage insurance and motor damage coverage upon insurance are based ownership or maintenance or use of the covered pip automobile, benefits are not conditioned on the ownership of an insured automobile. at [Id. 608.][4] specific provisions These decisions and the no-fault highlight statutory the distinction between the pip coverage types treatment of and other of cover- age. statutorily I would find no mandated residual liability coverage where the does registration It should be noted that in Madar the issue of did not pip Appeals coverage arise. The Court of the insurance determined applicable canceled, was on the basis that had not been despite of sale the insured vehicle and the transfer of the registration. Co, Sentry 66; App See also Allstate Ins Co v Ins 191 Mich (1991), NW2d 422 in which the Court determined that because the pip registration expired, coverage applicable insured’s had was not 24.13115(1). 500.3115(1); under MCL Allstate Ins Opinion Dissenting Riley, J. purchaser provide such not vehicle. covered
III policy in effect be- the insurance The terms of require the not Allstate do Williams and tween provision In Preece. benefits residual coverage, I am such the absence of requires provision persuaded the no-fault act I Allstate. would affirm these benefits finding Appeals, of the Court decision required to defend *18 involving underlying action tort Preece plaintiff. part of this J., no in the decision took Brickley, case.