Community Service Ins. Co. v. Shears

• Decision Date: 02 April 1979
• Docket Number: Docket No. 78-256
• Citation: 89 Mich.App. 372,280 N.W.2d 532
• Parties: COMMUNITY SERVICE INSURANCE COMPANY, Plaintiff-Appellee, v. Richard A. SHEARS and Charles A. Shears, Defendants, and Rita Shears, Special Administratrix of the Estate of Robin Shears, Deceased and Rita Shears, Individually, Defendant-Appellant, and Secretary of State for the State of Michigan, Intervening Defendant.
• Court: Court of Appeal of Michigan — District of US

Page 532

280 N.W.2d 532

89 Mich.App. 372

COMMUNITY SERVICE INSURANCE COMPANY, Plaintiff-Appellee, v. Richard A. SHEARS and Charles A. Shears, Defendants, and Rita Shears, Special Administratrix of the Estate of Robin

Shears, Deceased and Rita Shears, Individually,

Defendant-Appellant,

and

Secretary of State for the State of Michigan, Intervening Defendant.

Docket No. 78-256.

Court of Appeals of Michigan.

April 2, 1979.

Released for Publication July 12, 1979.

Larry G. Sharp, Flint, for defendant-appellant.

Gault, Davison, Bowers & Hill by Guy H. Hill, Flint, for plaintiff-appellee.

Crawford & Newman by Richard J. Drew, Flint, for Richard Shears.

Before BASHARA, P. J., and V. J. BRENNAN and MAHER, JJ.

BASHARA, Presiding Judge.

Defendant Rita Shears appeals from a declaratory judgment holding that a household exclusionary clause in the automobile insurance policy of defendant Richard Shears released the plaintiff insurer from any duty to defend an action brought against Richard Shears by appellant or to satisfy any judgment arising therefrom.

On September 3, 1973, Mr. Shears struck and killed his three-year-old daughter while backing his truck out of the driveway. Following a divorce, Rita Shears brought an action against her ex-husband in her own name and as special administratrix of the estate of her daughter for damages arising from the accident.

The household exclusionary clause in question states in pertinent part:

"Coverage A Bodily Injury Liability. To pay on behalf of the insured all sums which the insured shall become legally obligated to pay * * * because of * * * death * * * arising out of the ownership, maintenance or use of the automobile.

"This policy does not apply:

"(t) under Coverage A, to bodily injury to (1) the spouse or any parent, son or daughter of the insured, or (2) the named insured."

The validity of similar household exclusionary clauses has been considered by numerous panels of this Court. In Weisberg v. Detroit Automobile Inter-Insurance Exchange, 36 Mich.App. 513, 194 N.W.2d 193 (1971), a split panel ¹ upheld an exclusionary clause barring a named insured from recovery. The named insured had been a passenger in his own car which was being permissibly operated by another person when an accident occurred. This same result was reached in State Farm Fire & Casualty Co. v. Peckham, 74 Mich.App. 551, 254 N.W.2d 575 (1977), wherein the Court based its decision on the Weisberg precedent.

However, other panels of this Court have declined to follow the Weisberg rationale and found such clauses to be void as against public policy. Gurwin v. Alcodray, 77 Mich.App. 97, 257 N.W.2d 665 (1977), Allstate Ins. Co. v. DeFrain, 81 Mich.App. 503, 265 N.W.2d 392 (1978), State Farm Mutual Automobile Ins. Co. v. Traycik (After Remand), 86 Mich.App. 285, 272 N.W.2d 629 (1978).

The Michigan Supreme Court addressed the issue of household exclusionary clauses in the recently released case of State Farm Mutual Automobile Ins. Co. v. Sivey, 404 Mich. 51, 272 N.W.2d 555 (1978). The Court held that an exclusion of a named insured in an automobile insurance policy contravened public policy. The Court specifically rejected the Weisberg majority opinion and adopted Judge (now Justice) Levin's dissent.

Plaintiff argues that the Sivey case is applicable only to accidents occurring prior to the amendment of the Motor Vehicle Accident Claims Act and those occurring since the no-fault legislation. We cannot accept this argument. The reference to the Financial Responsibility Act, M.C.L. § 257.520(b)(2); M.S.A. § 9.2220(b)(2), in the Motor Vehicle Accident Claims Act, M.C.L. § 257.1102(d); M.S.A. § 9.2802(d), was replaced with a reference to M.C.L. § 500.3009(2); M.S.A. § 24.13009(2). ²

The 1971 amendment has not been interpreted as working a change in the state's public policy as set forth in the former statute. The amendment allows only a very narrow exclusion of liability coverage when a vehicle is Operated by a named person. The household exclusion seeks to avoid liability when certain persons are injured. The statutory exclusion is clearly inapplicable in such a situation. Citizens Mutual Ins. Co. v. Central National Ins. Co of Omaha, 65 Mich.App. 349, 352-354, 237 N.W.2d 322 (1975), Detroit Automobile Inter-Ins. Exchange v. Van Slyke, 82 Mich.App. 237, 266 N.W.2d 771 (1978).

The exclusionary clause in question is invalid. It is neither authorized by statute nor in harmony with the legislative purpose of comprehensive liability coverage as interpreted by the judiciary.

Reversed.

1 A vigorous dissent was lodged in this case by Judge (now Justice) Levin.

2 M.C.L. § 257.1102(d); M.S.A. § 9.2802(d), prior to amendment, provided:

"(d) 'Uninsured motor vehicle' means a motor vehicle as to which there is not in force a liability policy meeting the requirements of the motor vehicle responsibility law of this state, established pursuant to the provisions of chapter 5 of Act No. 300 of the Public Acts of 1949, as amended, being sections 257.501 to 257.532 of the Compiled Laws of 1948, and which is not owned by a holder of self-insurance under this law."

M.C.L. § 257.520(b)(2); M.S.A. § 9.2220(b)(2) prov...