Dye v. Esurance Prop. & Cas. Ins. Co.

• Decision Date: 11 July 2019
• Docket Number: Calendar No. 1,Docket No. 155784
• Citation: 934 N.W.2d 674,504 Mich. 167
• Parties: Matthew DYE, BY his Guardian, SIPORIN & ASSOCIATES, INC., Plaintiff-Appellee/Cross-Appellant, v. ESURANCE PROPERTY & CASUALTY INSURANCE COMPANY, Defendant/Cross-Plaintiff/Appellant/Cross-Appellee, and GEICO Indemnity Company, Defendant/Cross-Defendant/Appellee/Cross-Appellant, and Priority Health, Defendant/Cross-Plaintiff/Appellee, and Blue Cross Blue Shield of Michigan, Defendant-Appellee.
• Court: Michigan Supreme Court

504 Mich. 167

934 N.W.2d 674

Matthew DYE, BY his Guardian, SIPORIN & ASSOCIATES, INC., Plaintiff-Appellee/Cross-Appellant,

v. ESURANCE PROPERTY & CASUALTY INSURANCE COMPANY, Defendant/Cross-Plaintiff/Appellant/Cross-Appellee,andGEICO Indemnity Company, Defendant/Cross-Defendant/Appellee/Cross-Appellant,andPriority Health, Defendant/Cross-Plaintiff/Appellee,andBlue Cross Blue Shield of Michigan, Defendant-Appellee.

Docket No. 155784

Calendar No. 1

Supreme Court of Michigan.

Argued October 9, 2018

Decided July 11, 2019

Zahra, J.

This case presents the significant question of whether an owner or registrant of a motor vehicle involved in an accident is excluded from receiving statutory no-fault insurance benefits under the no-fault act, MCL 500.3101 et seq. , when someone other than an owner or registrant purchased no-fault insurance for that vehicle.¹ Relying on Barnes v. Farmers Ins. Exch. ,² the Court of Appeals concluded that "[a]t least one owner or registrant must have the insurance required by MCL 500.3101(1), and ‘when none of the owners maintains the requisite coverage, no owner may recover [personal injury protection (PIP) ] benefits.’ "³ The insured sought leave to appeal in this Court, and we granted the application in part to consider this question.⁴

We conclude that an owner or registrant of a motor vehicle is not required to personally purchase no-fault insurance for his or her vehicle in order to avoid the statutory bar to PIP benefits. Rather, MCL 500.3101(1) only requires that the owner or registrant "maintain" no-fault insurance, and the term "maintain," as commonly understood, means to keep in an existing state. Because MCL 500.3101(1) does not prescribe any particular manner by which no-fault insurance must be maintained, we will not read into the statute a requirement that the insurance be purchased or obtained by a vehicle’s owner or registrant. Further, the grammatical composition of the MCL 500.3113(b) benefits exclusion, including the use of the term "which" within that provision, signifies that the exclusion does not apply if the security required by MCL 500.3101(1) was "in effect" at the time of the accident.⁵ Though defendant maintains that the term "which" in this provision refers to the owner or operator of the motor vehicle, the usage of "which" at the time the no-fault act was enacted, as well as currently, reflects that this term is not properly used to refer to individual persons.

We therefore hold that an owner or registrant of a motor vehicle involved in an accident is not excluded from receiving no-fault benefits when someone other than that owner or registrant purchased no-fault insurance for that vehicle because the owner or registrant of the vehicle may "maintain" the insurance coverage required under the no-fault act even if he or she did not purchase the insurance. The Court of Appeals' decision in Barnes and other caselaw suggesting to the contrary are overruled to the extent that they are inconsistent with our holding.⁶ We reverse in part the judgment of the Court of Appeals and remand this case to the Washtenaw Circuit Court for further proceedings not inconsistent with this opinion.

I. FACTS AND PROCEDURAL HISTORY

On September 26, 2013, plaintiff Matthew Dye was involved in a motor vehicle accident and suffered serious injuries that included a traumatic brain injury

. At that time, plaintiff was 32 years old, fully employed, a member of the National Guard who had spent time in Afghanistan, and recently married. At some point before the accident, plaintiff had granted his father power of attorney "to do bussiness [sic] at the secretary of state on [plaintiff’s] behalf." At the time of the accident, plaintiff was driving a 1997 BMW that he had purchased two months earlier. After the purchase, plaintiff asked his father to register the vehicle for him and to obtain no-fault insurance. His father registered the vehicle in plaintiff’s name at the secretary of state’s office and obtained a no-fault insurance policy from Esurance via the Internet. The declarations page of the policy identified only plaintiff’s father as the named insured. At the time of the accident, plaintiff was living with his wife, who owned a Dodge Caravan that was insured by GEICO.

After Esurance and GEICO refused to cover plaintiff’s claim, plaintiff filed a breach of contract claim against both insurers along with a declaratory action, alleging that either Esurance or GEICO was obligated to pay his no-fault PIP benefits and requesting that the trial court determine the parties' respective rights and duties. A priority dispute between Esurance and GEICO ensued.⁷ Eventually, Esurance paid plaintiff more than $388,000 in PIP benefits, but Esurance continued to maintain that GEICO was the responsible insurer. GEICO acknowledged that it was the primary insurer and began settlement negotiations with plaintiff and Esurance.

Then, on November 13, 2014, the Court of Appeals' opinion in Barnes v. Farmers Ins. Exch. was redesignated "for publication."⁸ In Barnes , the panel held that "under the plain language of MCL 500.3113(b), when none of the owners maintains the requisite coverage, no owner may recover PIP benefits."⁹ After Barnes was published, GEICO reevaluated its legal position and ceased settlement discussions. Essentially, what had been—before Barnes —merely a priority dispute among potential insurers over who had to pay plaintiff’s claim turned into a dispute about whether plaintiff was covered under the no-fault act.

Esurance filed a cross-claim against GEICO arguing that GEICO had breached a settlement agreement. GEICO moved for summary disposition of plaintiff’s claim, arguing that plaintiff was not entitled to PIP benefits in light of the now-published decision in Barnes because plaintiff owned the subject vehicle but had not insured it and the person who had insured it (plaintiff’s father) was not an "owner" as defined in MCL 500.3101. Plaintiff, in turn, moved for summary disposition, arguing that Barnes was wrongly decided and, regardless, that his father was an owner and registrant for purposes of the no-fault act because he had the right to use the BMW and because he had physically registered the vehicle.

The trial court granted Esurance summary disposition on its cross-claim, ruling that GEICO and Esurance had entered into a valid settlement agreement and that GEICO had priority over plaintiff’s claim. The trial court denied GEICO’s motion for summary disposition and granted plaintiff’s motion for summary disposition, thus determining that GEICO was required to provide no-fault benefits to plaintiff. The trial court stated that it did not need to address the decision in Barnes because plaintiff’s father was an owner and registrant of the BMW. According to the trial court, the only issue remaining between plaintiff and GEICO was the amount of damages. The trial court thus entered an order granting Esurance summary disposition on its cross-claim, denying GEICO’s motion for summary disposition with regard to plaintiff, and granting plaintiff’s motion against GEICO with regard to no-fault coverage and priority.

GEICO filed an interlocutory application for leave to appeal, which the Court of Appeals granted.¹⁰ In an unpublished per curiam opinion, the Court of Appeals reversed the trial court’s decision that granted summary disposition to Esurance.¹¹ The panel held that the trial court erred by enforcing the settlement agreement. The panel explained that "[a]lthough the issuance of Barnes promptly snuffed out what appears to have been a ‘nearly done’ deal, the parties had not yet reached a meeting of the minds on all of the essential terms, and the trial court erred in granting Esurance’s motion for summary disposition on its cross-claim for enforcement of the alleged agreement."¹²

In regard to the trial court’s decision denying GEICO summary disposition against plaintiff on the basis of Barnes , the panel embraced Barnes ’s interpretation of MCL 500.3101(1) without reservation, stating:

Although a motor vehicle may have more than one owner for purposes of the no fault act, it is not sufficient that a vehicle is insured by just anyone. At least one owner or registrant must have the insurance required by MCL 500.3101(1), and "when none of the owners maintains the requisite coverage, no owner may recover PIP benefits." ^{[13 ]}

The Court of Appeals then held that the trial court erred as a matter of law by finding that plaintiff’s father was a "registrant" for purposes of MCL 500.3101(1).¹⁴ A majority of the panel, however, agreed with the trial court that there remained genuine issues of material fact as to whether plaintiff’s father was an "owner" of the BMW plaintiff was driving at the time of the accident.¹⁵ Therefore, the Court of Appeals remanded this case to the trial court for further proceedings.¹⁶

Esurance filed an application in this Court arguing that the Court of Appeals improperly reversed the trial court’s decision to enforce the purported settlement agreement by granting Esurance summary disposition on its cross-claim against GEICO. Plaintiff filed a cross-appeal arguing that Barnes was improperly decided and that Esurance could not deny liability simply because plaintiff himself did not obtain no-fault insurance. GEICO filed a cross-appeal arguing that the Court of Appeals erred by ruling that a question of fact precluded summary disposition in favor of GEICO on the issue of whether plaintiff’s father was a co-owner of the BMW that plaintiff, in GEICO’s view, failed to insure. This Court granted plaintiff’s cross-application for leave to appeal and denied Esurance’s application and GEICO’s cross-application.¹⁷ Accordingly, the sole issue before the Court is "whether an owner or registrant of a motor vehicle involved in an accident may be entitled to personal protection insurance benefits for accidental bodily injury where no owner or registrant of the motor vehicle maintains security...