Lee v. Detroit Auto. Inter-Insurance Exchange, INTER-INSURANCE

• Citation: 315 N.W.2d 413,412 Mich. 505
• Decision Date: 01 February 1982
• Docket Number: Docket No. 63019,No. 1,INTER-INSURANCE,1
• Parties: Warren LEE, Plaintiff-Appellant, v. DETROIT AUTOMOBILEEXCHANGE, Defendant-Appellee. Calendar
• Court: Michigan Supreme Court

Page 413

315 N.W.2d 413

412 Mich. 505

Warren LEE, Plaintiff-Appellant, v. DETROIT AUTOMOBILE INTER-INSURANCE EXCHANGE, Defendant-Appellee.

Docket No. 63019.

Calendar No. 1.

Supreme Court of Michigan.

Argued June 3, 1980.

Decided Feb. 1, 1982.

Frank R. Langton & Associates, P. C. by Barry Sigman, Warren, for plaintiff-appellant.

Glime, Daoust, Wilds, Rusing & Widlak by Denis R. Leduc, Mount Clemens, for defendant-appellee.

RYAN, Justice.

In December, 1974, while employed by the United States Postal Service, Warren Lee injured his back unloading the mail from a government-owned mail truck. After collecting benefits authorized by the federal workers' compensation act, ¹ he filed suit against appellee, Detroit Automobile Inter-Insurance Exchange (DAIIE), seeking personal injury protection benefits under the no-fault insurance policy covering his personal vehicle. DAIIE denied the claim on the basis that it was "not the insurer of the vehicle furnished by (Lee's) employer" and moved for summary judgment pursuant to GCR 1963, 117.2, subds. (1) and (3).

The trial court granted the motion, holding that appellant was not entitled to benefits because "the no-fault act applies only to those vehicles required to be registered with the state." ²

The Court of Appeals agreed.

We granted leave to appeal, 407 Mich. 945 (1979), in order to answer the question whether "a person injured in a motor vehicle accident involving a motor vehicle not required to be registered (in the State of Michigan may) claim no-fault insurance benefits from his own insurer."

We hold that such an insured may be entitled to benefits under his own policy and we reverse the judgment of the Court of Appeals.

I

Our decision in this case rests, in the last analysis, upon our recognition that it is the policy of the no-fault act that persons, not motor vehicles, are insured against loss. ³

The circuit court and the Court of Appeals were of the view and the appellee contends here that in a single-vehicle accident, no-fault benefits are not payable by the insurer of the individual injured unless the vehicle is one required to be registered with the State of Michigan and covered under a no-fault insurance policy.

The appellant contends, on the other hand, that one who is injured in a single-vehicle accident involving a vehicle not registered in the State of Michigan or covered under a no-fault insurance policy is nevertheless entitled to benefits from his personal no-fault insurer providing only that the injury arose "out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle".

Two distinct provisions of the no-fault act are implicated in the issue joined in this case; M.C.L. § 500.3101(1); M.S.A. § 24.13101(1), which declares who must obtain no-fault insurance for how long, and M.C.L. § 500.3105; M.S.A. § 24.13105, which defines the scope of personal injury protection benefits. The Court of Appeals panel below held that the two sections must be read together as mutually dependent in the sense that the only motor vehicle accident in which an injured person may collect no-fault benefits under § 3105 is one involving a "motor vehicle required to be registered in this state" under § 3101. The appellant contends that in the context of the facts of this case, § 3105 alone establishes the liability of an insurer to pay such benefits and there is no requirement that there be involved a motor vehicle registered in this state having no-fault insurance coverage.

Section 3105 establishes the circumstances under which personal protection benefits, such as are sought here, are payable:

"(1) Under personal protection insurance an insurer is liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle, subject to the provisions of this chapter."

Appellee claims that the "motor vehicle" to which the foregoing section refers must be a motor vehicle registered in this state with respect to which no-fault insurance coverage is required to be maintained:

"Since in the plaintiff-appellant's case he was injured while using a non-registered motor vehicle, the no-fault act does not apply and no personal injury protection benefits are payable." Appellee's Brief, p. 8.

The Court of Appeals panel below was of the same view, although it stated the proposition differently:

"The Legislature never intended a system in which insurers compensated persons where no insured vehicle was ever involved in the accident."

In reaching that conclusion, the Court of Appeals relied upon its earlier decision in Shoemaker v. National Ben Franklin Ins. Co., 78 Mich.App. 175, 259 N.W.2d 414 (1977), in which it declared:

"For an insurer to incur liability under M.C.L. § 500.3105; M.S.A. § 24.13105, there must at a minimum be an accident involving a vehicle intended to be covered by M.C.L. § 500.3101(1); M.S.A. § 24.13101(1)."

In that case a motorcycle being operated by the plaintiff struck a tractor pulling a manure spreader on a public highway. The Shoemaker Court observed that "(n)either the motorcycle nor the tractor is a 'motor vehicle' to which the no-fault act applies." The Court reached that conclusion because a motorcycle is specifically excluded from the definition of a "motor vehicle" in § 3101(2)(c) and a tractor is not required to be registered for no-fault coverage under the act because "(w)e regard the tractor and manure spreader as 'implements of husbandry', excepted from (the) registration (requirement) by M.C.L. § 257.216(c); M.S.A. § 9.1916(c), and M.C.L. § 257.21; M.S.A. § 9.1821".

We disagree with that analysis, overrule the rule stated in Shoemaker and reverse the Court of Appeals below.

II

The error in the Shoemaker analysis and that of the panel below, we think, is in reading into § 3101(2)(c) of the statute a more restrictive meaning to the expression "motor vehicle" than was adopted by the Legislature and then, as a result, attributing to the lawmakers the intention to limit a no-fault insurer's obligation to pay personal protection insurance benefits to cases in which at least one of the motor vehicles involved in an accident is registered in Michigan and covered by a no-fault insurance policy. The two sections of the no-fault act which both the Shoemaker Court and the panel below have held must be read together actually speak to separate and distinct subjects. Section 3101(2)(c) declares what the expression "motor vehicle" means when used as a term of art throughout the statute. Section 3101(1), on the other hand, is not a definitional section at all and speaks to the wholly different subject of the category of persons required to carry no-fault coverage and for what duration. While both sections deal with the applicability of the no-fault law, they are concerned with entirely different aspects of its applicability.

In this case the plaintiff seeks personal protection insurance benefits under § 3105(1). That section describes the character of the injury-causing incident which triggers the obligation of a no-fault insurer to pay benefits to an injured person. The section, we repeat, provides:

"(1) Under personal protection insurance an insurer is liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle, subject to the provisions of this chapter."

It is noteworthy that the section declares that entitlement to benefits depends, in part, upon "use of a motor vehicle as a motor vehicle". There is no language qualifying the right to benefits or the insurer's duty to pay them with a requirement that such motor vehicle be a "registered", "insured", or "covered" motor vehicle as indeed might easily have been done had the Legislature so intended. The requirement is merely that the vehicle involved be a "motor vehicle" used, maintained, operated or owned "as a motor vehicle".

We are not left to speculate about whether the Legislature intended the expression "motor vehicle" to mean a covered or registered or insured motor vehicle when it used those words as an expression of art throughout the statute. The meaning of that expression is explicitly set down in the definitional section of the act, § 3101(2), in which, in subsection (c) the Legislature declared:

" 'Motor vehicle' means a vehicle, including a trailer, operated or designed for operation upon a public highway by power other than muscular power which has more than 2 wheels. Motor vehicle does not include a motorcycle or a moped as defined in Section 32b of Act No. 300 of the Public Acts of 1949." 1980 P.A. 445.

Conspicuously absent is any language limiting "motor vehicle" to one required to be registered in the state or for which no-fault security must be maintained. ⁴

III

While it is not, as a matter of law, a controlling factor in the case, it is instructive that the appellee, in its policy issued to Mr. Lee, has agreed to pay him benefits for injury "arising out of * * * use of a motor vehicle as a motor vehicle" without qualification that the vehicle must be a registered or covered motor vehicle. It is not as though the appellee intended that the expression "motor vehicle", as used in its policy, be read to mean insured, registered or covered vehicle because it troubled to define "insured motor vehicle" in explicit detail elsewhere in the policy. ⁵ IV

Reference to other provisions of the no-fault act not directly implicated in the issue before us, particularly §§ 3114 and 3115, suggests strongly that the Legislature, in its broader purpose, intended to provide benefits whenever, as a general proposition, an insured is injured in a motor vehicle accident, whether or not a registered or covered motor vehicle is involved; and in its narrower purpose intended that an injured person's personal insurer stand primarily liable for such benefits whether or not its policy covers the...