Farmers Ins. Exch. v. Farm Bureau Ins. Co.
| Decision Date | 17 August 2006 |
| Docket Number | Docket No. 259763. |
| Parties | FARMERS INSURANCE EXCHANGE, Plaintiff-Appellee, v. FARM BUREAU GENERAL INSURANCE COMPANY of Michigan, Defendant-Appellant. |
| Court | Court of Appeal of Michigan — District of US |
Anselmi & Mierzejewski, P.C. (by Joseph S. Mierzejewski), Bloomfield Hills, for the plaintiff.
Willingham & Coté, P.C. (by John A. Yeager), East Lansing, for the defendant.
Before: WHITBECK, C.J., and ZAHRA and DONOFRIO, JJ.
Defendant, Farm Bureau General Insurance Company of Michigan, appeals as of right an order denying defendant's motion for summary disposition and granting summary disposition to plaintiff, Farmers Insurance Exchange, under MCR 2.116(C)(10). Underlying this case is a van-motorcycle accident. The trial court concluded that under MCL 500.3114(5)(a), defendant was required to reimburse plaintiff for first-party no-fault benefits paid to the injured motorcyclist and to continue providing benefits to the motorcyclist because defendant was the insurer of the owner of the van involved in the underlying accident. Because the trial court properly construed MCL 500.3114(5)(a) to require that an insurer that insures an owner or registrant who owns the motor vehicle involved in an accident with a motorcycle is first in priority to pay no-fault benefits to the injured person, and correctly concluded that defendant was required to pay no-fault benefits, we affirm.
Rory Osentoski was riding a motorcycle when he was struck by a van driven by Lynn Smith. Smith and John Petiprin, who were dating, owned the van. On the day of the accident, the van was uninsured due to a failure to pay the insurance premium. Smith admitted that she did not have any type of insurance on the date of the accident. Defendant had issued Petiprin a no-fault insurance policy, effective on the date of the accident, that listed a vehicle owned by Petiprin, but did not list Smith as an insured, or the vehicle involved in the accident.
Osentoski, who had insurance as required by statute,1 submitted a first-party no-fault benefits claim through the Assigned Claims Facility under MCL 500.3171 et seq., which the facility assigned to plaintiff. Pursuant to Osentoski's claim, plaintiff paid him no-fault benefits. Plaintiff requested that defendant begin making no-fault payments to Osentoski and further requested reimbursement for benefits it had already paid, arguing that defendant was first in priority to pay benefits under MCL 500.3114(5). Defendant argued that it had no obligation to pay under MCL 500.3114(5) and refused to pay.
Plaintiff filed for declaratory relief, requesting a declaration that defendant was required to reimburse plaintiff for benefits paid to Osentoski under MCL 500.3114(5). Plaintiff then moved for summary disposition under MCR 2.116(C)(10), asserting that it was last in priority to pay first-party no-fault benefits as the assigned claims servicing insurer. While asserting that Michigan courts had not interpreted the relevant language in MCL 500.3114(5), plaintiff stated that Michigan courts had interpreted similar language in MCL 500.3115(1) consistent with its position that defendant was required to pay. Defendant also moved for summary disposition under MCR 2.116(C)(8) and (10), arguing that it did not issue a policy covering the van involved in the accident and that there is no statute requiring it to provide coverage. In response to plaintiff's argument defendant asserted that interpretation of MCL 500.3115(1) was irrelevant because the language in that section greatly differs from MCL 500.3114(5).
The trial court issued an opinion granting summary disposition for plaintiff under MCR 2.116(C)(10). In construing MCL 500.3114(5), the trial court reasoned in part as follows:
Because the first two words of subsection (5)(a) directly precedes [sic] the words "of the owner or registrant" and not the words "of the motor vehicle" they clearly provide that the injured person must seek benefits from the specific insurance company that possesses a contractual relationship with the owner or registrant of the vehicle — not from the specific insurance company that insures the motor vehicle involved in the accident. Moreover, because there exists the word "of" between "owner or registrant" and "the motor vehicle involved in the accident" it indicates a possessive relationship between a person and the motor vehicle that was involved in the accident. . . .
The trial court further reasoned that the legislative intent of MCL 500.3114(5) was consistent with the no-fault act in that persons rather than vehicles are insured against loss.
Defendant moved for rehearing or reconsideration, arguing that the financial responsibility act, MCL 257.501 et seq., should be considered for purposes of construing MCL 500.3114(5), claiming that the two acts are in pari materia. Defendant asserted that under the financial responsibility act, an owner's policy is limited to insuring only the vehicles listed in the policy. Thus, defendant argued that under MCL 500.3114(5), an insurer is required to provide coverage only if the insurer listed the motor vehicle involved in the accident. The trial court denied defendant's motion, reasoning that defendant's reliance on the financial responsibility act was untimely because defendant did not present it at oral argument or address it in writing prior to that motion. The trial court entered a stipulated order of declaratory judgment for plaintiff, ordering defendant to reimburse plaintiff for no-fault benefits it paid to Osentoski, and to continue providing benefits to Osentoski. Defendant now appeals as of right.
This Court reviews de novo a trial court's decision on a motion for summary disposition, Collins v. Comerica Bank, 468 Mich. 628, 631, 664 N.W.2d 713 (2003), and questions of statutory interpretation, Griffith v. State Farm Mut. Automobile Ins. Co., 472 Mich. 521, 525-526, 697 N.W.2d 895 (2005).
The issue before us is whether MCL 500.3114(5)(a) requires an insurer to pay an injured motorcyclist no-fault benefits when the insurer did not issue a policy covering the vehicle involved in the accident. Defendant's position is that MCL 500.3114(5)(a) does not require payment of no-fault benefits because MCL 500.3114(5)(a) only requires an insurer to provide no-fault benefits under these facts if the insurer actually insured the motor vehicle involved in the accident. Plaintiff's position is that MCL 500.3114(5)(a) does require payment of no-fault benefits because the plain language of MCL 500.3114(5)(a) states that the insurer need not insure the vehicle in the accident, but must insure the owner or registrant.
"`[O]ur primary task in construing a statute[] is to discern and give effect to the intent of the Legislature.'" Neal v. Wilkes, 470 Mich. 661, 665, 685 N.W.2d 648 (2004), quoting Sun Valley Foods Co. v Ward, 460 Mich. 230, 236, 596 N.W.2d 119 (1999). "If the statutory language is unambiguous, we must presume that the Legislature intended the meaning it clearly expressed and further construction is neither required nor permitted." Nastal v. Henderson & Assoc. Investigations, Inc., 471 Mich. 712, 720, 691 N.W.2d 1 (2005). In construing a statute, a court must give effect to every word, phrase, and clause and avoid a construction that would render any part of the statute surplusage or nugatory. Griffith, supra at 533-534, 697 N.W.2d 895. "Undefined statutory terms must be given their plain and ordinary meanings and it is proper to consult a dictionary for definitions." Halloran v. Bhan, 470 Mich. 572, 578, 683 N.W.2d 129 (2004).
Generally, under MCL 500.3101(1) and MCL 500.3114(1), an individual must seek no-fault benefits from his own insurer unless one of the exceptions enumerated in MCL 500.3114(2), (3), or (5) applies. Parks v. Detroit Automobile Inter-Ins. Exch., 426 Mich. 191, 202-203, 393 N.W.2d 833 (1986). The exception at issue here, MCL 500.3114(5), establishes the priority in which a motorcycle rider accidentally injured by a motor vehicle must claim nofault benefits. MCL 500.3114(5) provides in relevant part as follows:
A person suffering accidental bodily injury arising from a motor vehicle accident which shows evidence of the involvement of a motor vehicle while an operator or passenger of a motorcycle shall claim personal protection insurance benefits from insurers in the following order of priority:
(a) The insurer of the owner or registrant of the motor vehicle involved in the accident. [Emphasis added.]
In certain limited circumstances, a person may also claim benefits through the Assigned Claims Facility under MCL 500.3172(1), which provides in relevant part as follows:
A person entitled to claim because of accidental bodily injury arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle in this state may obtain personal protection insurance benefits through an assigned claims plan if no personal protection insurance is applicable to the injury. . . .
Under these facts, the general rule pursuant to MCL 500.3101(1) and MCL 500.3114(1) does not apply. This is the case because the accident falls squarely within the purview of MCL 500.3114(5), and MCL 500.3114(1) specifically exempts its application to motor vehicle accidents that meet the requirements of MCL 500.3114(2), (3), and (5). So for purposes of this case, while an injured motorcyclist must first seek no-fault benefits from the insurer described in MCL 500.3114(5)(a), no-fault benefits are also available from an assigned claims insurer under MCL 500.3172(1) if no other personal protection insurance applies, because the assigned claims insurer is last in order of priority. See Spencer v. Citizens Ins. Co., 239 Mich. App. 291, 301, 608 N.W.2d 113 (2000). Thus, the question is whether defend...
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