Corwin v. Daimlerchrysler Ins. Co.
| Decision Date | 17 April 2012 |
| Docket Number | Docket No. 301931. |
| Citation | 296 Mich.App. 242,819 N.W.2d 68 |
| Parties | CORWIN v. DAIMLERCHRYSLER INSURANCE COMPANY. |
| Court | Court of Appeal of Michigan — District of US |
OPINION TEXT STARTS HERE
Hom, Killeen, Siefer, Arene & Hoehn (by Elaine I. Harding) and John A. Lydick for Auto Club Insurance Association.
Law Offices of Thomas R. Bieglecki P.C. (by Thomas R. Bieglecki) for DaimlerChrysler Insurance Company.
Cory & Associates (by Patrick W. Bennett) for Foremost Insurance Company.
Before: BORRELLO, P.J., and BECKERING and GLEICHER, JJ.
This appeal involves a priority dispute among three automobile insurance companies. In 2007, plaintiffs John and Vera–Anne Corwin sustained severe injuries in a car accident while driving a 2007 Jeep Compass that John leased from defendant Chrysler LLC 1 and insured through defendant DaimlerChrysler Insurance Company 2 (Chrysler Insurance). The Corwins also owned two other motor vehicles: one insured by plaintiff Auto Club Insurance Association (Auto Club) and the other by defendant Foremost Insurance Company (Foremost). Auto Club and Foremost have paid the Corwins' personal injury protection (PIP) benefits at the time of this appeal. Chrysler Insurance insists that it does not share this responsibility because Chrysler LLC and its United States subsidiaries, rather than the Corwins, are the named insureds in the insurance policy for the Jeep Compass, and the policy states that Chrysler Insurance is not responsible for PIP benefits if the Corwins are entitled to PIP benefits as the named insureds in another policy. The trial court agreed and granted summary disposition in Chrysler Insurance's favor.
Michigan law requires that the named insured in an automobile insurance policy have an insurable interest. Moreover, a motor-vehicle insurer cannot avoid or shift its statutory primary responsibility for PIP benefits. We conclude that Chrysler LLC and its United States subsidiaries do not have an insurable interest as required by Michigan law and that the Chrysler Insurance policy contravenes the no-fault act by enabling Chrysler Insurance to avoid and shift its statutory responsibility for its share of the Corwins' PIP benefits. Thus, we reform the Chrysler Insurance policy to comply with Michigan law by including both John and Vera–Anne as “named insureds” falling within the policy's definition of “you.” We reverse and remand.
John and Vera–Anne Corwin are husband and wife and live together in Oakland County. John is a retiree of Chrysler LLC. As a retiree, John qualified for a Chrysler vehicle lease program. Through the program, John leased a 2007 Jeep Compass from Chrysler LLC beginning in June 2007. The term of the lease was for two years. Chrysler Insurance insured the Jeep Compass under a fronted insurance policy.3 Chrysler LLC never gave John an option of purchasing insurance with another automobile insurer. When John received the Jeep Compass, he received a certificate of insurance; however, John was not the named insured on the certificate. John never received a copy of the insurance policy or a title for the vehicle. However, John did receive a “lease vehicle terms and conditions manual.” John had a monthly lease fee of about $300 that was deducted from his pension check. The terms and conditions manual provided that the monthly fee “covered all expenses related to the [Jeep Compass] including insurance” that was “required by the state.” John was never informed what portion of his monthly payment was for the insurance.
The Chrysler Insurance policy declarations page and endorsements IL–A and IL–B provide that DaimlerChryslerCorporation and its United States subsidiaries are the “named insured” for the Jeep Compass. The policy defines “you” as “the Named Insured shown in the Declarations” and “us” as “the Company providing this Insurance.” The Chrysler Insurance policy states the following with respect to coverage: “We will pay personal injury protection [PIP] benefits to or for an ‘insured’ who sustains ‘bodily injury’ caused by an ‘accident’ and resulting from the ownership, maintenance or use of an ‘auto’ as an ‘auto’.” The policy defines an “insured” as follows:
B. Who Is An Insured
1. You or any “family member”.
2. Anyone else who sustains “bodily injury”:
a. While “occupying” a covered “auto”, or
b. As the result of an “accident” involving any other “auto” operated by you or a “family member” if that “auto” is a covered “auto” under the policy's Liability Coverage, or
c. While not “occupying” any “auto” as a result of an “accident” involving a covered “auto”.
The policy contains the following exclusion:
C. Exclusions We will not pay personal injury protection benefits for “bodily injury”:
* * *
6. To anyone entitled to Michigan no-fault benefits as a Named Insured under another policy. This exclusion does not apply to you or anyone “occupying” a motorcycle.
On August 5, 2007, John was driving the Jeep Compass. Vera–Anne and the Corwins' daughter, Gail, were seated in passenger seats. As John drove through an intersection on a green light, a vehicle driven by defendant Leslie Ann Jackson drove through on a red light and struck the Jeep Compass “ almost completely in the driver's door.” Jackson was an uninsured motorist at the time of the accident. Both John and Vera–Anne sustained severe injuries.
At the time of the accident, the Corwins owned a Jeep Liberty that was insured with Auto Club under a Michigan no-fault insurance policy. John and Vera–Anne were the “named insureds” under the policy. The Corwins also owned a motor home. The motor home was insured by Foremost. John was the “named insured” under the policy. After the accident, Auto Club provided the Corwins “hundreds of thousands of dollars” in PIP benefits. But, neither Foremost nor Chrysler Insurance paid the Corwins PIP benefits before this action was initiated.
The Corwins and Auto Club sued Chrysler Insurance, Chrysler LLC, Foremost, and Jackson. The Corwins and Auto Club requested a declaratory judgment regarding the parties' obligations to pay PIP benefits, Auto Club's right to reimbursement from defendants, and the Corwins' right to uninsured-motorist coverage under their three insurance policies. The Corwins and Auto Club also pleaded a single count of negligence against Jackson. Chrysler Insurance and Chrysler LLC filed a counterclaim against the Corwins and Auto Club and moved for summary disposition under MCR 2.116(C)(10). It argued that Auto Club and Foremost had coequal priority to pay the Corwins' PIP benefits because John was a named insured on both the Auto Club and Foremost policies but not the Chrysler Insurance policy. Chrysler Insurance also argued that the Corwins could not recover uninsured-motorist benefits from Chrysler Insurance because the Chrysler Insurance policy did not provide uninsured-motorist coverage at the time of the accident. Auto Club and Foremost moved for partial summary disposition under MCR 2.116(C)(10). They argued that Chrysler Insurance, Auto Club, and Foremost shared the liability for the Corwins' PIP benefits because (1) the Corwins were the named insureds on the Auto Club and Foremost policies and (2) the Chrysler Insurance policy should be reformed by the court to name the Corwins as the named insureds because the policy improperly shifted Chrysler Insurance's statutory responsibility for the Corwins' PIP benefits to Foremost and Auto Club.
Without hearing oral argument on the parties' motions for summary disposition, the trial court issued an opinion and order on July 1, 2010. The trial court granted Chrysler Insurance's motion for summary disposition and denied Auto Club's and Foremost's motion for summary disposition. The court opined as follows, in pertinent part:
ACIA and Foremost find themselves in a legal quandary in that the fundamental reality is that DCIC [sic] is the “named insured” on its own policy. This Court believes the law does not permit the interpretation of the No–Fault Act proposed by ACIA [Auto Club Insurance Corporation] and Foremost. The DCIC policy is a “fronting policy” which ACIA and Foremost ask this Court to declare illegal.... This Court is asked to “close the loophole” created by the DCIC policy; this is something that this Court cannot do. Absent a directive from a higher authority, this Court cannot find the DCIC policy is illegal or should be interpreted a different way. This Court cannot engage in legislative functions as the proper role of the judiciary is to interpret and not write the law. State Farm [ Fire ] and Cas. Co. v. Old Republic Ins. Co., 466 Mich. 142, 146, 644 N.W.2d 715 (2002).
As discussed supra, the Corwins were not the “named insured” on [the] DCIC policy, but they were the “named insured” on the ACIA and Foremost policies. MCL 500.3114 specifically refers to the person named in the policy. It has been held that “the person named in the policy” as used in the No Fault Act, is synonymous with the term “named insured.” Cvengros v. Farm Bureau Ins., 216 Mich.App. 261, 264, 548 N.W.2d 698 (1996). Based on the principles of statutory interpretation discussed supra, this Court finds that ACIA and Foremost are co-equals in the highest order of priority.
... As it relates to the Uninsured/Underinsured Motorist Benefits claims relative to the Corwins, this Court finds there is no genuine issue of fact that the DCIC policy provided no such coverage under the policy for Michigan vehicles at the time of the accident.
Auto Club moved for reconsideration. The court granted the motion in part “to correct a clerical error,” i.e., to amend its July 1, 2010, opinion and order to reflect that Auto Club's motion for summary disposition was granted in part to the extent that Auto Club and Foremost were coequals in the highest order of priority.
The trial court entered an order of judgment (a partial consent judgment, because, by that time, Auto Club and Foremost...
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