Mdot v. North Central Coop.
| Decision Date | 24 January 2008 |
| Docket Number | Docket No. 268432. |
| Citation | 750 N.W.2d 234,277 Mich. App. 633 |
| Parties | DEPARTMENT OF TRANSPORTATION, Plaintiff-Appellant, v. NORTH CENTRAL COOPERATIVE LLC, Defendant-Appellee. |
| Court | Court of Appeal of Michigan — District of US |
Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, and Patrick F. Isom and Joshua W. Gubkin, Assistant Attorneys General, for the plaintiff.
Harvey Kruse, P.C. (by Michael J. Guss and Anne V. McArdle), Flint, for the defendant.
Before: MURPHY, P.J., and ZAHRA and SERVITTO, JJ.
Plaintiff appeals as of right the circuit court's order granting summary disposition in defendant's favor. Because the requirement of the Michigan Motor Carrier Safety Act, MCL 480.11 et seq., that transporters of hazardous materials maintain $5 million in security creates an exception to the no-fault act's $1 million cap on damages, and neither res judicata nor compulsory joinder bars the present action, we reverse and remand for further proceedings.
This lawsuit arises out of an accident involving a tanker truck, owned by defendant and operated by defendant's employee, that was transporting liquefied petroleum gas (LPG). The truck apparently struck a guardrail, which caused the tanker to separate from the trailer, crash over the barriers of a freeway overpass, and plummet to the road below. Upon impact, the tanker exploded, enveloping the road and overpass bridge in flames and ultimately causing significant damage to both. Plaintiff paid nearly $2 million to repair the damage.
Plaintiff brought suit against defendant's insurer, Farmland Insurance Company (Farmland), under the no-fault act, MCL 500.3101 et seq., to recover the cost of the repairs. Plaintiff was awarded $658,138.11 in its action against Farmland.1 Plaintiff thereafter initiated the present negligence action against defendant, contending that defendant was directly liable for the remaining damages. Plaintiff also alleged that, to the extent that defendant may be immune from tort liability under the no-fault act, the no-fault act conflicted with and was preempted by 49 USC 5101 et seq., which governs the transportation of hazardous materials. Defendant moved for summary disposition pursuant to MCR 2.116(C)(8) and (10), and the trial court granted the motion, opining that the no-fault act controls; that because defendant maintained $1 million in insurance coverage as required by the no-fault act, defendant is immune from liability; and that the no-fault act does not conflict with 49 USC 5101. The trial court further opined that res judicata barred the present action.
This Court reviews a trial court's decision on summary disposition de novo. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998). A motion brought under MCR 2.116(C)(8) tests the legal sufficiency of a plaintiff's complaint on the pleadings alone. Maiden v. Rozwood, 461 Mich. 109, 119-120, 597 N.W.2d 817 (1999). In assessing a motion brought under MCR 2.116(C)(8), all factual allegations are accepted as true, Radtke v. Everett, 442 Mich. 368, 373, 501 N.W.2d 155 (1993), as well as any reasonable inferences or conclusions that can be drawn from the facts. Smith v. Stolberg, 231 Mich.App. 256, 258, 586 N.W.2d 103 (1998). The motion should be granted only when the claim is so clearly unenforceable as a matter of law that no factual development could possibly justify a right of recovery. Wade v. Dep't of Corrections, 439 Mich. 158, 163, 483 N.W.2d 26 (1992).
In ruling on a motion for summary disposition under MCR 2.116(C)(10), "a court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence submitted in the light most favorable to the nonmoving party." Scalise v. Boy Scouts of America, 265 Mich. App. 1, 10, 692 N.W.2d 858 (2005). Summary disposition is appropriate under MCR 2.116(C)(10) when, "[e]xcept as to the amount of damages, there is no genuine issue as to any material fact, and the moving party is entitled to judgment . . . as a matter of law." This Court reviews de novo a trial court's ruling on a motion for summary disposition made pursuant to MCR 2.116(C)(10). Scalise, supra at 10, 692 N.W.2d 858.
On appeal, plaintiff asserts that while the no-fault act may be read to abolish tort liability for property damage resulting from automobile accidents as long as the owner maintains $1 million in insurance coverage, federal law requires that transporters of hazardous materials carry at least $5 million of financial responsibility to satisfy any liability for property damage. Plaintiff contends that to the extent the federal regulation conflicts with the no-fault act, the federal law is controlling under the Supremacy Clause and thus preempts the no-fault act on this issue. Plaintiff further contends that the adoption of federal financial requirements for the transportation of hazardous materials in the Motor Carrier Safety Act creates an exception to the no-fault act's abolition of tort liability with respect to transporters of hazardous materials. Because, as addressed below, we find plaintiff's second argument dispositive, we need not consider its first argument.
MCL 500.3101(1) requires the owner or registrant of a motor vehicle required to be registered in this state to "maintain security for payment of benefits under personal protection insurance, property protection insurance, and residual liability insurance." MCL 500.3135(3) abolishes tort liability2 arising from the ownership, maintenance, or use of a motor vehicle, as long as the owner or registrant of the motor vehicle maintained security for payment of benefits under personal protection insurance, property protection insurance, and residual liability insurance as required by MCL 500.3101(1). MCL 500.3121 further provides:
(1) Under property protection insurance an insurer is liable to pay benefits for accidental damage to tangible property arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle subject to the provisions of this section and sections 3123, 3125, and 3127.
* * *
(5) Property protection insurance benefits consist of the lesser of reasonable repair costs or replacement costs less depreciation and, if applicable, the value of loss of use. However, property protection insurance benefits paid under 1 policy for damage to all tangible property arising from 1 accident shall not exceed $1,000,000.00.
However, federal law, under 49 USC 31139(d) and 49 CFR 387.9, requires that a $5 million level of financial responsibility be carried for the transportation of hazardous substances (such as LPG). Effective January 8, 1996, Michigan adopted by reference certain federal motor carrier safety regulations (including the above) through the Motor Carrier Safety Act (MCSA), MCL 480.11 et seq. According to plaintiff, the MCSA thus created an exception to the no-fault act's general abolition of tort liability for owners or registrants of motor vehicles who maintained $1 million in security for payment of benefits as required by MCL 500.3101(1). We agree.
This Court recently addressed this issue in Michigan Dep't of Transportation v. Initial Transport, Inc., 276 Mich.App. 318, 740 N.W.2d 720 (2007). In Initial Transport, a cargo tank trailer containing gasoline detached from the semi-tractor that was towing it, crossed over the barrier wall, and fell onto the roadway below. The tanker trailer then exploded, causing a fire that severely damaged parts of the overpass and adjoining structures. The plaintiff's repair costs were approximately $3.5 million.
At the time of the accident, the defendant maintained a general insurance policy for $1 million in property protection benefits as well as a separate excess liability policy with an additional $4 million limit. The plaintiff filed a complaint to reach the higher limit under the umbrella policy, asserting, among other claims, that the adoption in the MCSA of federal regulations for transportation of hazardous materials, MCL 480.11, created an exception to the damages limitation in the no-fault act. A panel of this Court agreed, holding that while the Legislature intended MCL 500.3121(5) to apply to all vehicles, it later crafted, through enactment of the MCSA, an exception to the $1 million cap on property damages payable under one policy, imposing potential liability in addition to that imposed by the no-fault act on motor carriers carrying hazardous materials. Id. at 326, 740 N.W.2d 720.
This Court reasoned that
because the MCSA requires motor carriers to maintain minimum levels of financial responsibility, "the financial reserves (e.g., insurance policies or surety bonds) sufficient to satisfy liability amounts set forth in this subpart covering public liability," we are bound to presume that benefits from these insurance policies must be recoverable by parties injured by those motor carriers. [Id. at 327, 740 N.W.2d 720.]
The Court further noted that
49 CFR 387.11, incorporated into the MCSA, MCL 480.11a(1)(b), requires insurers who furnish the necessary insurance policies to be legally authorized to be "willing to designate a person upon whom process, issued by or under the authority of any court having jurisdiction of the subject matter, may be served in any proceeding at law or equity brought in any State in which the motor carrier operates." This language clearly contemplates actions against insurers to recover mandated benefits. We conclude that the broad language "any court" and "any proceeding at law or equity" implies a remedy for a party injured by an insured. [Id.]
This Court, then, ruled that the MCSA would be rendered meaningless if it did not provide protection over and above that allowed by the no-fault act and that it served as an exception to the no-fault act.
In this matter, because defendant was transporting LPG, it was required, under federal regulations and the...
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