Detroit Auto. Inter-Insurance Exchange v. Felder

• Decision Date: 21 November 1979
• Docket Number: INTER-INSURANCE,Docket No. 78-2434
• Citation: Detroit Auto. Inter-Insurance Exchange v. Felder, 287 N.W.2d 364, 94 Mich.App. 40 (Mich. App. 1979)
• Parties: DETROIT AUTOMOBILEEXCHANGE, a Reciprocal Insurance Exchange, Plaintiff-Appellee, v. William Mack FELDER and Robert D. Felder, Defendants, v. AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA, a Foreign Corporation,Defendant-Appellant.
• Court: Court of Appeal of Michigan

Page 364

287 N.W.2d 364

94 Mich.App. 40

DETROIT AUTOMOBILE INTER-INSURANCE EXCHANGE, a Reciprocal

Insurance Exchange, Plaintiff-Appellee, v. William Mack FELDER and Robert D. Felder, Defendants, v. AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA, a Foreign

Corporation,Defendant-Appellant.

Docket No. 78-2434.

Court of Appeals of Michigan.

Nov. 21, 1979.

Released for Publication Jan. 29, 1980.

Stephen S. Green, Detroit, for defendant-appellant.

Clair W. Pike, and Carl Gromek, Detroit, for Detroit Auto.

Harold Gayer, Detroit, for Felders.

Before MAHER, P. J., and BRONSON and MOORE, ^* JJ.

PER CURIAM.

Defendant American Bankers Insurance Company of Florida (American) appeals as of right the trial court's grant of summary judgment in favor of plaintiff, Detroit Automobile Inter-Insurance Exchange (DAIIE).

Defendants William Mack Felder and Robert D. Felder were insured by plaintiff DAIIE with a policy that included uninsured motorist coverage when, on September 15, 1975, they were involved in an auto accident with a car owned by Phyllis Murphy, insured by defendant American, and driven by Willie Terrill. American has denied coverage on the ground that Terrill was an excluded driver. The Felders sought arbitration against DAIIE on the ground that they were hit by an uninsured motorist, Terrill. DAIIE responded by filing this declaratory judgment action to determine whether Terrill was an excluded driver, and, as such, an uninsured motorist. The trial court held that Terrill was not effectively excluded from American's policy covering the car he was driving, and that as a result he was not an uninsured motorist. We agree and affirm.

The Michigan Legislature has authorized a narrow exception to the general rule of comprehensive coverage in Michigan, which allows certain persons to be excluded from coverage while operating an automobile covered in a no-fault policy. Detroit Automobile Inter-Ins. Exchange v. Comm'r of Ins., 86 Mich.App. 473, 272 N.W.2d 689 (1978). The language is highly specific and detailed requirements must be met before a named individual is deemed excluded:

"When authorized by the insured, automobile liability or motor vehicle liability coverage may be excluded when a vehicle is operated by a named person. Such exclusion shall not be valid unless the following notice is on the face of the policy or the declaration page or certificate of the policy and on the certificate of insurance referred to in subsection (3) of section 4 of Act No. 198 of the Public Acts of 1965, as amended, being section 257.1104 of the Compiled Laws of 1948: Warning when a named excluded person operates a vehicle all liability coverage is void no one is insured. Owners of the vehicle and others legally responsible for the acts of the named excluded person remain fully personally liable." M.C.L. § 500.3009(2); M.S.A. § 24.13009(2). (Emphasis added.)

American admits that it did not comply with this statutory mandate, but instead argues that it has complied with the spirit of the law, and that literal application of the statute would yield an absurd result. This argument is based on the fact that Phyllis Murphy signed a form titled "NOTICE AND AUTHORIZATION", which states:

"As the owner of a motor vehicle you may be liable, under Michigan's Motor Vehicle Code, for any injury caused by the negligent operation of your vehicle, including when it is driven by any other person with your express or implied consent or knowledge.

"If your vehicle is driven by your father, mother, brother, sister, son, daughter, or other immediate member of your family, it is presumed in law that such a person is driving with your consent and knowledge.

"Normally, automobile liability insurance protects the owner against all legal liability arising from the use of his vehicle. However, if you authorize your insurance company to exclude a specific named individual, you have no automobile liability coverage when the named excluded individual operates your vehicle.

"IF THE NAMED EXCLUDED INDIVIDUAL DRIVES YOUR VEHICLE AND HAS AN ACCIDENT, YOU MAY BE LIABLE BUT YOU WILL NOT HAVE INSURANCE COVERING YOUR LIABILITY." (Emphasis in original.)

The form goes on to name Willie Terrill as a "Named Excluded Person" and bears the signature of Phyllis Murphy.

We cannot accept American's position that this form satisfies the statute. To begin, a statute that is clear on its face and unambiguous is not open to interpretation by the courts. City of Lansing v. Twp. of Lansing, 356 Mich. 641, 97 N.W.2d 804 (1959), Stover v. Retirement Board of City of St. Clair Shores Firemen & Police Pension System, 78 Mich.App. 409, 260 N.W.2d 112 (1977). We find no...