Spectrum Health Hosps. v. Farm Bureau Mut. Ins. Co. of Mich.
| Decision Date | 31 July 2012 |
| Docket Number | 143330.,Docket Nos. 142874 |
| Citation | 492 Mich. 503,821 N.W.2d 117 |
| Parties | SPECTRUM HEALTH HOSPITALS v. FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN Progressive Marathon Insurance Company v. DeYoung. |
| Court | Michigan Supreme Court |
Miller Johnson, Grand Rapids (by Richard E. Hillary, II, and Robert J. Christians) for Spectrum Health Hospitals in Spectrum Health.
Willingham & Coté, P.C., East Lansing (by Kimberlee A. Hillock and John A. Yeager), for Farm Bureau Mutual Insurance Company of Michigan and Farm Bureau General Insurance Company of Michigan in Spectrum Health.
Wheeler Upham, P.C., Grand Rapids (by Nicholas S. Ayoub), for Progressive Marathon Insurance Company in Progressive.
Miller Johnson, Grand Rapids (by Richard E. Hillary, II, and Michelle L. Quigley) for Spectrum Health Hospitals in Progressive.
Zausmer, Kaufman, August, Caldwell & Tayler, PC, Farmington Hills (by Carson J. Tucker), for the Insurance Institute of Michigan.
We granted leave in these cases to address the question whether a person injured while driving a motor vehicle that the person had taken contrary to the express prohibition of the owner may avail himself or herself of personal protection insurance benefits (commonly known as “PIP benefits”) under the no-fault act,1 notwithstanding the fact that MCL 500.3113(a) bars a person from receiving PIP benefits for injuries suffered while using a vehicle that he or she “had taken unlawfully,unless the person reasonably believed that he or she was entitled to take and use the vehicle.”
We hold that any person who takes a vehicle contrary to a provision of the Michigan Penal Code 2—including MCL 750.413 and MCL 750.414, informally known as the “joyriding” statutes—has taken the vehicle unlawfully for purposes of MCL 500.3113(a).3 We also hold that the use of the phrase “a person” in MCL 500.3113(a) clearly and plainly includes a family member who has taken a vehicle unlawfully, thereby precluding that person from receiving PIP benefits.
In reaching this conclusion, we consider and reject two distinct legal theories that the respective panels of the Court of Appeals applied in concluding that the PIP claimants are not excluded from receiving benefits by MCL 500.3113(a). In Spectrum Health Hospitals v. Farm Bureau Mutual Insurance Co. of Michigan (Docket No. 142874), we examine the “chain of permissive use” theory, which the Court of Appeals initially adopted in Bronson Methodist Hospital v. Forshee.4 This theory arises when a vehicle owner authorizes the vehicle's use by another person (the intermediate user), who in turn authorizes a third person (the end user) to use the vehicle. Applying Bronson in Spectrum Health, the Court of Appeals held that, for the purposes of MCL 500.3113(a), a vehicle owner is presumed to have allowed the end user to take the vehicle, regardless of whether the owner had expressly forbidden the end user from taking the car.5 We conclude that Bronson erred by applying a theory developed in owner-liability caselaw to the context of MCL 500.3113(a) because this caselaw did not address whether the end user of a vehicle violated the Michigan Penal Code, including MCL 750.413 or MCL 750.414, by unlawfully taking a vehicle. Therefore, we overrule Bronson's application of the “chain of permissive use” theory as inconsistent with MCL 500.3113(a). To determine whether the end user in Spectrum Health unlawfully took the vehicle, we consider the undisputed facts of this case: the vehicle's owner expressly told the end user that he was not allowed to drive the vehicle. Therefore, we conclude that the Court of Appeals erred by affirming the circuit court's grant of summary disposition to Spectrum Health because MCL 500.3113(a) precludes the claimant from receiving PIP benefits in this case.
In Progressive Marathon Insurance Co. v. DeYoung (Docket No. 143330), we examine the “family joyriding exception” to MCL 500.3113(a). This theory, first articulated in Justice Levin's plurality opinion in Priesman v. Meridian Mutual Insurance Co.,6 involves the unauthorized taking of a person's motor vehicle by a family member who did not intend to steal it. Justice Levin opined that the Legislature did not intend that a relative's “joyride” be considered an unlawful taking under MCL 500.3113(a) because, given that most legislators are parents and grandparents, they may have experienced children who used a family vehicle without permission and may have done so themselves.7 Thus, he concluded that the Legislature did not truly intend to exclude teenagers who joyride in their relatives' automobiles. Because the family-joyriding exception has no basis in the language of MCL 500.3113(a), we disavow Justice Levin's plurality opinion in Priesman and overrule the Court of Appealsdecisions applying it: Butterworth Hospital v. Farm Bureau Insurance Co.,8Mester v. State Farm Mutual Insurance Co.,9Allen v. State Farm Mutual Automobile Insurance Co.,10 and Roberts v. Titan Insurance Co. (On Reconsideration).11 Cross-defendants, Progressive Marathon Insurance Company and Citizens Insurance Company of America, are entitled to summary disposition because MCL 500.3113(a) excludes the injured claimant from coverage.
Therefore, in both Spectrum Health (Docket No. 142874) and Progressive (Docket No. 143330), we reverse the judgments of the Court of Appeals and remand these cases to their respective circuit courts for further proceedings consistent with this opinion.
PIP claimant Craig Smith, Jr. (Craig Jr.), was injured in a single-car accident that occurred while he was driving a vehicle owned by his father, Craig Smith, Sr. (Craig Sr.), and insured by Farm Bureau Mutual Insurance Company of Michigan and Farm Bureau General Insurance Company of Michigan (collectively “Farm Bureau”). Craig Sr. had forbidden Craig Jr. to operate the vehicle because he had no valid driver's license. Craig Jr. acknowledged that he knew he was forbidden to operate the vehicle. Craig Sr. entrusted the vehicle to Craig Jr.'s girlfriend, Kathleen Chirco, to enable Craig Jr. and Kathleen to perform landscaping services. Nevertheless, Craig Sr. instructed Kathleen, in Craig Jr.'s presence, that she was not to allow Craig Jr. to drive it. That night, Craig Jr. began drinking and asked Kathleen for the keys to Craig Sr.'s vehicle. Although she initially resisted, Kathleen eventually gave him the keys, and he later crashed the vehicle into a tree. Craig Jr. pleaded no contest to operating while intoxicated causing serious injury, MCL 257.625, and was sentenced to a minimum of 2 1/2 years in prison.
Spectrum Health Hospitals, which rendered care to Craig Jr., brought suit against Farm Bureau to recover payment for those services and subsequently moved for summary disposition. Farm Bureau opposed Spectrum Health's motion and took the position that Craig Jr. was not entitled to PIP benefits because the vehicle he was using had been taken unlawfully. The circuit court granted summary disposition in favor of Spectrum Health, ruling that Kathleen had been empowered to permit Craig Jr. to operate the vehicle. The Court of Appeals affirmed, applying the chain-of-permissive-use theory from Bronson to conclude that Craig Jr. had not taken the vehicle unlawfully.12
This Court granted Farm Bureau's application for leave to appeal, requesting the parties to address
whether an immediate family member who knows that he or she has been forbidden to drive a vehicle may neverthelessbe a permissive user of the vehicle eligible for [PIP] benefits under MCL 500.3113(a) when, contrary to the owner's prohibition, an intermediate permissive user grants the [PIP] claimant permission to operate the accident vehicle.13
By age 26, Ryan DeYoung had accumulated three drunk-driving convictions, which resulted in the repeated loss of his valid driver's license beginning at age 17. Ryan's wife, Nicole DeYoung, owned and insured the family's four vehicles with Progressive Marathon Insurance Company. Ryan was a named excluded driver on the Progressive policy. As a result, Nicole expressly prohibited Ryan from driving the vehicles, including the 2001 Oldsmobile Bravada that she used as her principal vehicle. On the night of September 17, 2008, Ryan came home intoxicated and without his house key. He banged on the window of their home. Nicole rose from her bed, admitted him, and, perceiving his intoxicated state, went back to bed. Ryan took the key to the Bravada out of Nicole's purse and then took the vehicle, contrary to Nicole's standing instructions and without her permission.
Within 20 minutes of taking Nicole's vehicle, Ryan was badly injured in a single-car accident. He incurred bills of more than $53,000 at Spectrum Health Hospitals and another $232,000 at Mary Free Bed Rehabilitation Hospital. Progressive denied PIP benefits, arguing that Ryan had been injured while using a vehicle that he had unlawfully taken. It commenced a declaratory action against Ryan and Nicole on this basis. Spectrum Health and Mary Free Bed intervened as cross-plaintiffs to recover payment from Progressive for the outstanding bills. Spectrum Health and Mary Free Bed also filed a claim with the Michigan Assigned Claims Facility, which designated Citizens Insurance Company of America to respond to Ryan's claim. Citizens also denied coverage, and Progressive named Citizens as a cross-defendant in this lawsuit.
Progressive moved for summary disposition, contending that at the time of the accident Ryan was using a motor vehicle that he had taken unlawfully and without a reasonable belief that he was entitled to do so, which precluded him from receiving PIP benefits under MCL 500.3113(a). The circuit court granted summary disposition to both Progressive and Citizens, ruling that although the Court of Appeals decisions recognizing and applying the family-joyriding exception were binding...
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