Miclea v. Cherokee Ins. Co.

• Decision Date: 17 September 2020
• Docket Number: No. 344694,344694
• Citation: 333 Mich.App. 661,963 N.W.2d 665
• Parties: Gavril MICLEA, Plaintiff, and Michigan Head & Spine Institute, P.C., Intervening Plaintiff, v. CHEROKEE INSURANCE COMPANY, Defendant-Appellee, and Auto Club Insurance Association, Defendant-Appellant, and Michigan Assigned Claims Plan and Michigan Automobile Insurance Placement Facility, Defendants.
• Court: Court of Appeal of Michigan — District of US

333 Mich.App. 661

963 N.W.2d 665

Gavril MICLEA, Plaintiff,andMichigan Head & Spine Institute, P.C., Intervening Plaintiff,

v. CHEROKEE INSURANCE COMPANY, Defendant-Appellee,andAuto Club Insurance Association, Defendant-Appellant,andMichigan Assigned Claims Plan and Michigan Automobile Insurance Placement Facility, Defendants.

No. 344694

Court of Appeals of Michigan.

Submitted February 4, 2020, at Detroit.

September 17, 2020, 9:15 a.m.

Richard D. Wilson and Darren M. Cooper for Cherokee Insurance Company.

Michele M. Arene and Mary T. Nemeth for Auto Club Insurance Association.

Before: Ronayne Krause, P.J., and K. F. Kelly and Tukel, JJ.

Ronayne Krause, P.J. Defendant Auto Club Insurance Association (Auto Club) appeals as of right the stipulated judgment entered in favor of plaintiff Gavril Miclea. That stipulated judgment expressly permitted Auto Club to appeal the trial court's previous order denying its motion for summary disposition and granting summary disposition to defendant Cherokee Insurance Company (Cherokee), holding that Auto Club was the highest-priority no-fault insurer for purposes of plaintiff's claim for personal protection insurance (PIP) benefits under Michigan's no-fault act, MCL 500.3101 et seq. On appeal, Auto Club argues that the trial court erred by concluding that it was the highest-priority no-fault insurer rather than Cherokee pursuant to MCL 500.3114(3). We agree. We therefore reverse the order granting summary disposition in favor of Cherokee and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff suffered injuries when he slipped and fell while trying to put antifreeze in his 2000 Volvo tractor (the truck). At the time, plaintiff was performing truck-driving services under an independent-contractor agreement with Universal Am-Can, Ltd. (Universal). Plaintiff testified that he held legal title to the truck, and at the time of the accident, Universal was leasing the truck from him. Plaintiff maintained personal automobile insurance through Auto Club, and Universal maintained business automobile insurance through Cherokee. After unsuccessfully pursuing PIP benefits from Auto Club, Cherokee, and defendant Michigan Assigned Claims Plan, plaintiff filed this lawsuit, seeking a determination as to which insurer was highest in priority for purposes of his claim for PIP benefits. Intervening plaintiff Michigan Head & Spine Institute, P.C., one of plaintiff's healthcare providers, also filed an intervening complaint to recover benefits for the services it provided.

Cherokee moved for summary disposition under MCR 2.116(C)(10), arguing that because plaintiff was an independent contractor at the time he suffered his injuries, his personal automobile insurer, Auto Club, was the highest-priority no-fault insurer pursuant to MCL 500.3114(1) and (3). In support of this position, Cherokee relied heavily on this Court's opinion in Adanalic v. Harco Nat'l Ins. Co. , 309 Mich. App. 173, 870 N.W.2d 731 (2015), identifying Adanalic as the "controlling authority for independent contractor cases such as the case at bar." In response, Auto Club argued that it was entitled to summary disposition, claiming that Cherokee was the highest-priority no-fault insurer pursuant to MCL 500.3114(3) because, regardless of whether plaintiff was an independent contractor, plaintiff was an employee of himself and the owner of the truck. Auto Club contended that Celina Mut. Ins. Co. v. Lake States Ins. Co. , 452 Mich. 84, 549 N.W.2d 834 (1996), and Besic v. Citizens Ins. Co. of the Midwest , 290 Mich. App. 19, 800 N.W.2d 93 (2010), rather than Adanalic , controlled the outcome of this priority dispute.

The trial court relied on the economic-reality test and determined that plaintiff was acting as an independent contractor at the time he sustained his injuries. The trial court therefore concluded that plaintiff was not an employee, so his personal insurer, Auto Club, was the no-fault insurer of highest priority. As a result, the trial court granted Cherokee's motion for summary disposition. Ostensibly, the instant appeal focuses on whether this case is controlled by Adanalic or by Celina and Besic . However, as will be discussed, we conclude that those three cases may be harmonized instead of shoehorning any of them to "control" over the others.

II. STANDARD OF REVIEW

A trial court's decision to grant or deny summary disposition is reviewed de novo. Ter Beek v. City of Wyoming , 495 Mich. 1, 8, 846 N.W.2d 531 (2014). Summary disposition is appropriate pursuant to MCR 2.116(C)(10) when there is "no genuine issue as to any material fact, and the moving party is entitled to judgment or partial judgment as a matter of law." MCR 2.116(C)(10). When reviewing a motion for summary disposition under MCR 2.116(C)(10), the court considers the affidavits, pleadings, depositions, admissions, and other admissible documentary evidence then filed in the action or submitted by the parties. MCR 2.116(G)(4), and (5) ; Puetz v. Spectrum Health Hosps , 324 Mich. App. 51, 68, 919 N.W.2d 439 (2018).

Michigan's appellate courts also review a trial court's interpretation and application of the no-fault act de novo.

Agnone v. Home-Owners Ins. Co. , 310 Mich. App. 522, 526, 871 N.W.2d 732 (2015). When interpreting and applying a statute, a court's primary goal is to ascertain and give effect to the Legislature's intent. Frierson v. West American Ins. Co. , 261 Mich. App. 732, 734, 683 N.W.2d 695 (2004). In doing so, courts look first to the language of the statute itself. Id. If the statute is clear and unambiguous, it must be enforced as written, and judicial construction is neither necessary nor permissible. Id. However, Michigan's appellate courts have recognized that "[t]erms contained in the no-fault act are read in the light of its legislative history and in the context of the no-fault act as a whole." Id. (quotation marks and citation omitted). Moreover, "[g]iven the remedial nature of the no-fault act, courts must liberally construe its provisions in favor of the persons who are its intended beneficiaries." Id. (quotation marks and citation omitted). "Further, courts should not abandon common sense when construing a statute." Id. (quotation marks and citation omitted).

III. LEGAL BACKDROP

"Michigan's no-fault act generally abolishes tort liability arising from the ownership, maintenance, or use of a motor vehicle." Grange Ins. Co. of Mich. v. Lawrence , 494 Mich. 475, 490, 835 N.W.2d 363 (2013). "Instead, insurance companies are required to provide first party insurance benefits for accidental bodily injury arising out of the use of a motor vehicle, which are commonly referred to as personal protection insurance (PIP) benefits." Id. "The basic purpose of no-fault is to ensure the compensation of persons injured in automobile accidents." Hill v. Aetna Life & Cas. Co. , 79 Mich. App. 725, 728, 263 N.W.2d 27 (1977). Thus, in general, "PIP coverage applies to the insured person, and not to the motor vehicle." Amerisure Ins. Co. v. Coleman , 274 Mich. App. 432, 438, 733 N.W.2d 93 (2007) (quotation marks and citation omitted). It is possible for more than one insurer to be responsible for payment of benefits to a particular individual. However, persons are generally not entitled to a double recovery from multiple policies unless the person's injuries exceed policy limits. Beaver v. Auto-Owners Ins. Co. , 93 Mich. App. 399, 401-403, 286 N.W.2d 884 (1979). In the event that multiple insurers might be responsible, the relative priority of those insurers is determined by MCL 500.3114(1). Corwin v. DaimlerChrysler Ins. Co. , 296 Mich. App. 242, 254-255, 819 N.W.2d 68 (2012). "[T]he general rule is that one looks to a person's own insurer for no-fault benefits unless one of the statutory exceptions, [ MCL 500.3114(2), (3), and (5) ], applies." Parks v. Detroit Auto. Inter-Ins. Exch. , 426 Mich. 191, 202-203, 393 N.W.2d 833 (1986).

There is no dispute that Auto Club is plaintiff's "own insurer," so Auto Club is, by default, the insurer of first priority. There is also no dispute that Cherokee insured the motor vehicle at issue. Consequently, only one statutory exception could potentially apply:

An employee, his or her spouse, or a relative of either domiciled in the same household, who suffers accidental bodily injury while an occupant of a motor vehicle owned or registered by the employer, shall receive personal protection insurance benefits to which the employee is entitled from the insurer of the furnished vehicle. [ MCL 500.3114(3).]

Pursuant to MCL 500.3101(3)(l )(i) and (iii), an "owner" of a motor vehicle can include either an entity leasing the vehicle or an entity holding legal title to the vehicle, or both.¹ Plaintiff, as the title holder, did not lose his status as an "owner" under the no-fault act by leasing the truck to Universal. See Besic , 290 Mich. App. at 21-22, 32, 800 N.W.2d 93. Consequently, both plaintiff and Universal were "owners" of the truck at the time of the injury. The outcome of this matter turns on whether plaintiff was an "employee" within the meaning of MCL 500.3114(3). The no-fault act does not expressly define "employer" or "employee."

IV. ANALYSIS

This Court has long held that the economic-reality test provides the appropriate framework for determining whether an individual is an employee or an independent contractor under Michigan's no-fault act. See, e.g., Parham v. Preferred Risk Mut. Ins. Co. , 124 Mich. App. 618, 624, 335 N.W.2d 106 (1983). The trial court properly applied the economic-reality test and determined that at the time of the injury, "plaintiff was operating as an independent contractor and not an employee." Auto Club does not challenge that finding. Cherokee thus argues generally that plaintiff simply cannot be an employee because he is an independent contractor. In contrast, Auto Club argues that plaintiff was nevertheless an "employee" for purposes of MCL 500.3114(3) because he was self-employed and...