Rohlman v. Hawkeye Sec. Ins. Co.

• Decision Date: 05 August 1991
• Docket Number: Docket No. 112670
• Citation: 190 Mich.App. 540,476 N.W.2d 461
• Parties: Frederick Robert ROHLMAN, Plaintiff-Appellee, v. HAWKEYE SECURITY INSURANCE COMPANY, Defendant Third-Party Plaintiff-Appellant, and Wills-Horton-Renn Agency, Defendant, and Automobile Club of Michigan a/k/a Automobile Club Insurance Association, a foreign corporation, Third-Party Defendant-Appellee, and State Farm Insurance Company, a foreign corporation, Third-Party Defendant.
• Court: Court of Appeal of Michigan — District of US

Page 461

476 N.W.2d 461

190 Mich.App. 540

Frederick Robert ROHLMAN, Plaintiff-Appellee, v. HAWKEYE SECURITY INSURANCE COMPANY, Defendant Third-Party Plaintiff-Appellant and Wills-Horton-Renn Agency, Defendant and Automobile Club of Michigan a/k/a Automobile Club Insurance Association, a foreign corporation, Third-Party Defendant-Appellee and State Farm Insurance Company, a foreign corporation Third-Party Defendant.

Docket No. 112670.

Court of Appeals of Michigan.

Submitted Aug. 7, 1990, at Detroit.

Decided Aug. 5, 1991, at 9:45 a.m.

Released for Publication Nov. 18, 1991.

Patterson & Patterson, Whitfield, Manikoff, Waddell, Moore & White, P.C. by Gerald G. White and Richard A. Patterson, Bloomfield Hills, for Frederick R. Rohlman.

Siemion, Huckabay, Bodary, Padilla & Morganti, P.C. by Charles A. Huckabay, Detroit, for Hawkeye Sec. Ins. Co.

Brandt, Hanlon, Becker, Lanctot, McCutcheon, Schoolmaster & Taylor by A. Randolph Judd, Birmingham and (MacArthur, Cheatham & Acker, P.C. by James G. Gross and Dwight R. Robinson, of counsel), Detroit, for Auto. Club of Michigan and Auto Club Ins. Ass'n.

Before REILLY, P.J., and CYNAR and WAHLS, JJ.

WAHLS, Judge.

In this action for a declaratory judgment to determine plaintiff's entitlement to first-party no-fault benefits pursuant to an insurance policy issued by defendant Hawkeye Security Insurance Company, defendant Hawkeye appeals as of right from a May 23, 1988, Oakland Circuit Court order granting plaintiff Frederick Rohlman's motion for summary disposition pursuant to MCR 2.116(A)(2) and a November 16, 1988, circuit court judgment awarding plaintiff $42,280 in personal injury protection and uninsured motorist no-fault benefits. We affirm.

The operative facts of this case are not in dispute. On August 5, 1985, plaintiff was one of several passengers traveling through Ohio, en route to Michigan, in a 1985 Chevrolet van owned by Vicki Stevens and her mother, Effie Stevens. The van, which was towing a small two-wheeled utility trailer, was insured under a form policy of no-fault insurance issued by Hawkeye, naming Vicki Stevens as the insured. The trailer was owned by Effie Stevens and insured by third-party defendant Automobile Club Insurance Association.

Vicki Stevens drove the van across some railroad tracks, which apparently caused the trailer to become unhitched from the van. After spinning on the road several times, the trailer came to rest on its roof in the left-turn lane on the opposite side of the highway. Vicki Stevens then turned the van around and stopped in the left-turn lane, approximately ten to twenty feet behind the trailer.

Plaintiff alighted from the van and walked to the trailer, intending to turn it over on its wheels. Plaintiff only managed to lift the trailer about 3 1/2 feet before lowering it to the ground. As plaintiff was in the process of attempting to lift the trailer a second time, he was struck by an unidentified hit-and-run driver. Approximately two minutes elapsed from the time plaintiff got out of the van until he was struck by the vehicle. Plaintiff, who had no insurance coverage of his own, sustained serious injuries as a result of the accident.

On October 21, 1986, plaintiff instituted this action against Hawkeye to obtain a judicial determination of his rights to personal injury protection and uninsured motorist benefits under Vicki Stevens' no-fault policy. Hawkeye subsequently moved for summary disposition on the basis that plaintiff was not entitled to no-fault benefits because plaintiff was not "occupying" either the trailer or the van at the time of the accident.

The trial court, relying primarily on the Michigan Supreme Court's holding in Nickerson v. Citizens Mutual Ins. Co., 393 Mich. 324, 224 N.W.2d 896 (1975), ruled that plaintiff was "occupying" the van at the time of the accident because: (1) if the trial court had not found plaintiff, an uninsured person, to be an occupant of the van, plaintiff would have had no recovery for his injuries; and (2) public policy reasons support a purposely broad construction of the policy term "occupying" because "plaintiff alighted from the van to right a trailer which had been attached to it when he was injured."

On appeal, Hawkeye first contends that plaintiff is not entitled to recover personal injury protection or uninsured motorist benefits under the no-fault policy issued to Vicki Stevens because plaintiff was not "occupying" the van or trailer at the time of the accident. We disagree. Hawkeye's argument is contrary to the rules of construction governing insurance contracts.

Part B of the form policy issued by Hawkeye to Vicki Stevens provides that Hawkeye will pay reasonable expenses incurred for necessary medical services because of bodily injury caused by an accident and sustained by a "covered person." ¹ Part C of the form policy issued by Hawkeye provides that Hawkeye will pay damages that a "covered person" is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury caused by an accident and sustained by a "covered person." ²

The term "covered person" is defined in Parts B and C of the policy as the named insured, such insured's family member, or any other person "occupying" the covered auto, i.e., the van or the trailer. ³ The term "OCCUPYING" IS DEFINED IN THE DEFINITION SECTION of the policy as "in, upon, getting in, on, out or off."

In Nickerson, supra, the plaintiff was a passenger in a car that became disabled. Its occupants pushed the vehicle off the road, and the plaintiff got out of the car and walked in front of it. An uninsured automobile struck the vehicle from which the plaintiff had just alighted, driving it forward into the plaintiff and injuring him. Under the terms of the vehicle owner's insurance policy, the plaintiff was only covered for uninsured motorist benefits if he was injured while "occupying" the vehicle. Our Supreme Court ruled that the term "occupying," as contained in the insurance policy, should be construed broadly to include those persons not actually inside or in contact with the vehicle at the time of the accident if there was "immediate prior 'occupying' of the insured vehicle" and the subsequent injury arose "out of the use or repair of the same vehicle." Id., pp. 331-332, 224 N.W.2d 896.

Subsequently, in Royal Globe Ins. Cos. v. Frankenmuth Mutual Ins. Co., 419 Mich. 565, 357 N.W.2d 652 (1984), our Supreme Court was asked to determine which of two insurance companies was responsible to pay benefits pursuant to the no-fault act, M.C.L. § 500.3101 et seq.; M.S.A. § 24.13101 et seq. On the day in question, Mr. Karam (the insured) and his spouse had just returned home. Mr. Karam opened the garage door with his remote control from inside the car, which was owned and insured by his employer. Parked inside the garage was Mr. Karam's own vehicle, which was insured by the defendant. Mrs. Karam got out of the car, and proceeded to the garage. Mr. Karam attempted to back the car into the garage but, unfortunately, a pop bottle lodged under the brake pedal and depressed the accelerator. Mr. Karam's vehicle struck the side of the garage, causing the overhead door to crash down on both cars, and it also struck Mrs. Karam, knocking her against the back wall.

M.C.L. § 500.3114(3); M.S.A. § 24.13114(3) provided that an employee's spouse sustaining "injury while an occupant of a motor vehicle owned or registered by the employer" could receive personal injury benefits from the insurer. At issue was the construction of the statutory term "occupant," as used in the no-fault act.

Our Supreme Court held that while the intent of the parties is considered in construing insurance policy language, with ambiguous terms being construed against the insurer, statutory terms are given their general or primary meanings, in accordance with legislative intent. Thus, the Supreme Court distinguished its prior holding in Nickerson, stating that "on its facts and in the rules governing the interpretation of its language, [Nickerson ] is simply inapplicable to this case and cases like it requiring construction of the term 'occupant' in the no-fault act." Id., p. 574, 357 N.W.2d 652.

The Court went on to hold that it was unnecessary to construe the meaning of the statutory term "occupant" as used in §§ 3114 and 3115 of the no-fault act as including persons within and upon a motor vehicle as well as those entering into and alighting from a motor vehicle because, "whatever her status was after she left the motor vehicle in the street and walked some 60 feet to the rear of the garage where the Pontiac struck her, Mrs. Karam was 'not an occupant' of the vehicle when she was injured." Id., p. 576, 357 N.W.2d 652.

Thus, there are two key distinctions between Nickerson and Royal Globe. First, and foremost, the former construed the term "occupying" as used in a private insurance contract, while the latter construed the term "occupant" as used in the no-fault act. Therefore, the principle, articulated in Nickerson, i.e., that doubtful or ambiguous terms in an insurance policy are to be construed against the drafter, is still good law and, further, is controlling in the instant case. ⁴ See Auto Club Ins. Ass'n v. DeLaGarza, 433 Mich. 208, 213, 444 N.W.2d 803 (1989); Auto-Owners Ins. Co. v. Boissonneault, 182 Mich.App. 375, 380, 451 N.W.2d 635 (1990). Unquestionably, the policy definition of the term "occupying" and the statutory definition of the term "occupant" are different, as developed through Michigan Supreme Court case law.

Second, the facts in Nickerson are markedly distinguishable from the facts in Royal Globe. Unlike the injured person in Royal Globe, the plaintiff in Nickerson, who was responding to an unexpected highway emergency, had not reached his intended destination at the time of the accident; once the vehicle had been repaired, or the problem alleviated, the plaintiff would have...