Adanalic v. Harco Nat'l Ins. Co.

• Citation: 309 Mich.App. 173,870 N.W.2d 731
• Decision Date: 05 February 2015
• Docket Number: Docket No. 317764.
• Parties: ADANALIC v. HARCO NATIONAL INSURANCE COMPANY.
• Court: Court of Appeal of Michigan (US)

309 Mich.App. 173

870 N.W.2d 731

ADANALIC

v.HARCO NATIONAL INSURANCE COMPANY.

Docket No. 317764.

Court of Appeals of Michigan.

Submitted Oct. 7, 2014, at Grand Rapids.

Decided Feb. 5, 2015, at 9:00 a.m.

Gruel Mills Nims & Pylman PLLC, Grand Rapids, (by J. Paul Janes ) for Salko Adanalic.

Miller Johnson (by Richard E. Hillary II, Grand Rapids,) for Spectrum Health Hospitals.

Miller & Tischler, PC (by Robert E. Dice, Jr. ), for Orthopaedic Associates of Michigan.

Garan Lucow Miller, PC, Detroit (by Daniel S. Saylor ), for Harco National Insurance Company.

Jonathan Shove Damon, Grand Rapids, (by Jonathan Shove Damon ) for Michigan Millers Mutual Insurance Company.

Before: BORRELLO, P.J., and SERVITTO, and SHAPIRO, JJ.

Opinion

SHAPIRO, J.

In this no-fault action, plaintiff Salko Adanalic sought first-party benefits from defendants Harco National Insurance Company (Harco) and Michigan Millers Mutual Insurance Company (Millers). Spectrum Health Hospitals (Spectrum) and Orthopaedic Associates of Michigan (Orthopaedic), who treated Adanalic's injuries, intervened as plaintiffs. Plaintiffs and defendants filed cross-motions for summary disposition. The trial court ruled that Millers was liable to plaintiffs for no-fault personal protection insurance (PIP) benefits and, accordingly, awarded damages to plaintiffs. Millers appeals on two grounds. First, it asserts that Adanalic was not entitled to payment of first-party PIP benefits. Second, it asserts that if Adanalic was entitled to PIP benefits, Harco, rather than Millers, was the highest priority PIP insurer.

On cross-appeal, Spectrum argues that either, or both, Millers and Harco are liable for attorney fees and penalty interest because of their unlawful failure to promptly pay PIP benefits. We affirm the trial court's ruling that plaintiffs were entitled to PIP benefits and that Millers was first in priority and so responsible for payment of those benefits and penalty interest. We reverse the trial court's ruling that Millers was not liable for plaintiffs' attorney fees and so remand for the calculation and award of those statutory fees.

I. FACTS

Adanalic was seriously injured while unloading a pallet from a disabled box truck onto a semi-trailer. He had contracted with DIS Transportation (a nonparty to this action) to pick up, haul, and deliver various loads of cargo. On October 1, 2011, he was hauling an empty semi-trailer on his return to Grand Rapids from an out-of-state delivery. He accepted a DIS dispatch to a truck stop in Indiana for the purpose of removing loaded pallets from the disabled box truck and loading them into his semi-trailer.¹ Both the truck and the semi-trailer were insured by defendant Harco under a policy that included Michigan no-fault coverage. The policy was issued to DIS. Adanalic had Michigan no-fault insurance through defendant Millers under a policy issued to his wife.

Upon arriving at the Indiana truck stop, Adanalic parked his semi-trailer approximately nine feet from the disabled box truck, which was of a different height. A ramp was extended from the box truck to the semi-trailer and used as a path for the transfer of the loaded pallets. Adanalic and the driver of the box truck began moving the loaded pallets, one at a time, over the ramp. The other driver pushed the pallets while Adanalic pulled them. Adanalic did so by using straps attached to the pallets for that purpose. While the two men were loading the third pallet onto the truck operated by Adanalic, the loaded pallet fell and it pulled Adanalic, who was attached to the pallet by the straps, down with it, injuring him.

Adanalic sought PIP benefits from Millers and Harco, but each denied his claim. Several months later, on March 12, 2012, he filed suit against defendants, seeking first-party PIP benefits for his injuries. Plaintiffs Spectrum and Orthopaedic subsequently filed intervening complaints against both defendants. Both defendants responded with denials of coverage.

The parties filed cross-motions for summary disposition under MCR 2.116(C)(10). After a hearing, the trial court issued a written opinion ruling that (1) Adanalic was entitled to PIP benefits, (2) Millers was the insurer of highest priority and, therefore, responsible for payment of the PIP benefits, (3) Millers was responsible for penalty interest due to its delay in paying Adanalic's PIP benefits, and (4) Millers was not responsible for plaintiffs' attorney fees.

The parties then submitted stipulations of fact regarding damages. The trial court subsequently assessed damages against Millers: $110,560.83 to Adanalic, $96,243.52 to Spectrum, and $8,944.83 to Orthopaedic.² This appeal and cross-appeal followed.

II. NO–FAULT PIP BENEFITS

Millers argues that two provisions of the no-fault act, MCL 500.3101 et seq., relieve it of responsibility for payment of Adanalic's PIP benefits. First, it argues that the circumstances of Adanalic's injuries do not satisfy any of the “parked-vehicle exceptions” enumerated in MCL 500.3106(1). Second, it argues that workers' compensation benefits were “available” to Adanalic under MCL 500.3106(2) and, therefore, Millers is not responsible for payment of PIP benefits. We conclude that both arguments fail.

Both of these issues involve questions of statutory interpretation, which we review de novo.³ Radina v. Wieland Sales, Inc., 297 Mich.App. 369, 373, 824 N.W.2d 587 (2012). As our Supreme Court has instructed:

[T]he purpose of statutory construction is to discern and give effect to the intent of the Legislature. In determining the intent of the Legislature, this Court must first look to the language of the statute. The Court must, first and foremost, interpret the language of a statute in a manner that is consistent with the intent of the Legislature. As far as possible, effect should be given to every phrase, clause, and word in the statute. The statutory language must be read and understood in its grammatical context, unless it is clear that something different was intended. Moreover, when considering the correct interpretation, the statute must be read as a whole. Individual words and phrases, while important, should be read in the context of the entire legislative scheme. While defining particular words in statutes, we must consider both the plain meaning of the critical word or phrase and its placement and purpose in the statutory scheme. A statute must be read in conjunction with other relevant statutes to ensure that the legislative intent is correctly ascertained. The statute must be interpreted in a manner that ensures that it works in harmony with the entire statutory scheme. [Bush v. Shabahang, 484 Mich. 156, 166–167, 772 N.W.2d 272 (2009) (quotation marks and citations omitted).]

And, “[g]iven the remedial nature of the no-fault act, courts must liberally construe its provisions in favor of the persons who are its intended beneficiaries.” Frierson v. West American Ins. Co., 261 Mich.App. 732, 734, 683 N.W.2d 695 (2004) (citations omitted).

A. PARKED–VEHICLE EXCEPTION

At the time Adanalic was injured, the relevant vehicles were parked. Under MCL 500.3106(1), PIP coverage does not apply if the relevant vehicle is parked unless one or more of three statutory exceptions applies. For purposes of obtaining no-fault benefits, “[a]ccidental bodily injury does not arise out of the ownership, operation, maintenance, or use of a parked vehicle as a motor vehicle unless any of the following occur”:

(a) The vehicle was parked in such a way as to cause unreasonable risk of the bodily injury which occurred.

(b) Except as provided in subsection (2), the injury was a direct result of physical contact with equipment permanently mounted on the vehicle, while the equipment was being operated or used, or property being lifted onto or lowered from the vehicle in the loading or unloading process.

(c) Except as provided in subsection (2), the injury was sustained by a person while occupying, entering into, or alighting from the vehicle. [MCL 500.3106(1) (emphasis added).]

The parties agree that subsection (1)(a) does not apply in this case. Millers argues that neither subsection (1)(b) nor (1)(c) was satisfied. The trial court found that plaintiffs satisfied the parked-vehicle exception of subsection (1)(b).

As described in Arnold v. Auto–Owners Ins. Co., 84 Mich.App. 75, 79–80, 269 N.W.2d 311 (1978), MCL 500.3106(1)(b) contains two independent clauses and provides coverage when the injury was the direct result of physical contact with either (1) “equipment permanently mounted on the vehicle, while the equipment was being operated or used,” or (2) “property being lifted onto or lowered from the vehicle in the loading or unloading process.”

Millers agrees that (1) Adanalic was lifting or lowering property from a parked vehicle during the loading or unloading process, and (2) Adanalic was in physical contact with that property when he was injured. Millers contends that regardless that Adanalic's fall was directly caused by the pallet's fall, his injuries are not covered because they did not actually occur until the fall ended in his impact with the ground.

The trial court found that the requirements of MCL 500.3106(1)(b) were met, stating in its opinion:

The parties' arguments concern the exceptions found in MCL 500.3106(b) and (c). This Court finds that the second scenario under MCL 500.3106(1)(b) applies in this case, entitling Adanalic to no-fault benefits.

The second scenario in MCL 500.3106(1)(b) “makes compensable injuries which are a direct result of physical contact with property being lifted onto or lowered from the parked vehicle in the loading or unloading process.” It is undisputed that Adanalic was injured during the loading or unloading process. The parties dispute whether Adanalic's injuries were “a direct result of physical contact with [the] property being lifted onto [the trailer.]”

Millers argues that the injuries did not result from contact with the pallet, but, rather, from contact with the ground

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