State Farm Mut. Auto. Ins. Co. v. Shelly

• Decision Date: 12 March 1975
• Docket Number: Docket No. 19577,No. 2,2
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Foreign Corporation, Plaintiff-Appellee, Cross-Appellant, v. Harold Francis SHELLY, Sr., and Harold Francis Shelly, Jr., Defendants, and Joseph H. Hawley, Administrator of the Estate of Dorothy Hawley, Deceased, et al., Defendants-Appellants
• Court: Court of Appeal of Michigan — District of US

Page 820

229 N.W.2d 820

59 Mich.App. 491

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Foreign Corporation, Plaintiff-Appellee, Cross-Appellant, v. Harold Francis SHELLY, Sr., and Harold Francis Shelly, Jr., Defendants and Joseph H. Hawley, Administrator of the Estate of Dorothy Hawley, Deceased, et al., Defendants-Appellants.

Docket No. 19577.

Court of Appeals of Michigan, Division No. 2.

March 12, 1975.

Released for Publication June 11, 1975.

Wilson, Portnoy, Basso, Keller & Avadenka by Francis R. Avadenka, Bloomfield Hills, for defendants-appellants.

Carl P. Ranno, Pontiac, William D. Eggenberger, Detroit, for Shelly.

John A. Ashton, Plymouth, for plaintiff-appellee.

Before ALLEN, P.J., and T. M. BURNS and MAHER, JJ.

ALLEN, Presiding Judge.

Hawley and Thomas, hereinafter referred to as defendants, have appealed from that portion of a February 13, 1974 order of declaratory judgment which held that State Farm Mutual Automobile Insurance Company hereinafter referred to as plaintiff, was bound to provide insurance coverage to the Shellys in the statutory amounts of $10,000 per individual and $20,000 per accident, M.C.L.A. § 257.520(b)(2); M.S.A. § 9.2220(b)(2), rather than the $25,000 per individual, $50,000 per accident provision in the policy. The plaintiff has cross- appelled, GCR 1963, 807.1, from that portion of the declaratory judgment which found no violation of the 'title-object' rule, Const.1963, art. 4, § 24, in the Motor Vehicle Accident Claims Act. M.C.L.A. § 257.1101; M.S.A. § 9.2801.

On April 18, 1971, defendant Harold Francis Shelly, Jr., was driving a vehicle owned by his father, Harold Francis Shelly, Sr., in Waterford Township, Oakland County. That vehicle was involved in a collision with another vehicle driven by Lynn Thomas, and several persons were killed and seriously injured. Subsequently, the instant defendants filed suit against the Shellys in Oakland County Circuit Court, and these proceedings have been stayed since September 27, 1974, pending resolution of this appeal.

At the time of the collision, plaintiff was the insurance company for the Shelly family vehicles, and after filing the answers to the Hawley and Thomas v. Shelly suit, commenced an action for declaratory judgment to determine its liability under two insurance policies issued by plaintiff to the Shellys. GCR 1963, 521. The parties stipulated that one of the policies was inapplicable to the accident, and the dispute centered about policy number 6101--536--CO1--22D. This policy provided coverage in the amount of $25,000 per individual and $50,000 per accident, and contained a clause excluding coverage of the vehicle when Harold Shelly, Jr., was driving.

The Shellys responded to plaintiff's suit by filing a motion for summary judgment on the ground that plaintiff had failed to state a claim upon which relief could be granted. GCR 1963, 117.2(1). Hawley and Thomas requested the trial court to deny plaintiff's right to declaratory judgment and to enter an order that the insurance policy was applicable to the accident. Plaintiff objected to the motion for summary judgment and moved the court to enter judgment in its behalf. GCR 1963, 117.3.

The hearing on this matter was held January 29, 1974, and the trial court rendered its written opinion February 1, 1974. The trial court found that the exclusionary clause was invalid in light of Allstate Insurance Co. v. Motor State Insurance Co., 33 Mich.App. 469, 190 N.W.2d 352 (1971), lv. den., 386 Mich. 760 (1971). Thus, the exclusionary clause was stricken from the insurance policy, and the vehicle was determined to have been insured at the time of the accident. The court then found that the plaintiff would be liable in the amount of $10,000 per individual and $20,000 per accident pursuant to M.C.L.A. § 257.520(b)(2); M.S.A. § 9.2220(b)(2). The court also found that the title of the Motor Vehicle Accident Claims Act, M.C.L.A. § 257.1101; M.S.A. § 9.2801, was of sufficient breadth to incorporate as an object the requirement that a vehicle not become uninsured and therefore a finding that an exclusionary clause had violated that object was not a violation of the 'title-object' rule of the Const.1963, art. 4, § 24.

We agree with the trial court that the Motor Vehicle Accident Claims Act is constitutional. At the outset, we note that plaintiff has offered no specific authority for the proposition that an appellate court's interpretation and application of a state statute somehow rendered that statute unconstitutional. Plaintiff's claim that our Court's interpretation and application of the Motor Vehicle Accident Claims Act in Allstate, supra, and the conclusion therein, rendered the Act unconstitutional as a violation of the title-object rule, Const.1963, art. 4, § 24, is clearly without merit.

The title to an act should 'be construed reasonable, and not in so narrow and technical a sense as unnecessarily to embarrass legislation'. City of Gaylord v. Gaylord City Clerk, 378 Mich. 273, 288, 144 N.W.2d 460 464 (1966). Const.1963, art. 4, § 24, does not require that the title disclose every specific provision of the act, or that the act, and perhaps its interpretation by a court, 'be no more comprehensive than is indicated by the title'. 'As long as the act is concerned with but one object only', and 'as long as the provisions are consistent with the object of the act as expressed in the title', there will be no violation of Const.1963, art. 4, § 24. People v. Andrea, 48 Mich.App. 310, 323, 210 N.W.2d 474 (1973). See also People v. Milton, 393 Mich. 234, 247--248, 224 N.W.2d 266 (1974), and cases cited therein. Applying those rules to the case at hand, we find no violation of the title-object rule, and find that plaintiff's claim is without merit.

Plaintiff further argues that Allstate, supra, encroached on legislative power in violation of Const.1963, art. 3, § 2, by placing special emphasis on the financial responsibility act, particularly M.C.L.A. § 257.520(b)(2); M.S.A. § 9.2220(b)(2), which was not placed there by the Legislature. Plaintiff argues that Allstate effectively amended M.C.L.A. § 257.1102(d); M.S.A. § 9.2802(d) by placing that special emphasis upon § 520(b)(2). Plaintiff cites School District of Pontiac v. Pontiac, 262 Mich. 338, 247 N.W. 474 (1933), for the proposition that the constitutional duty of a court is to interpret and apply the law rather than to enact laws. That is exactly what Allstate, supra, did, and we find plaintiff's case which involved a question as to whether a court had the power to allocate taxes, 262 Mich. 338, 353, 247 N.W. 474, totally inapplicable to Allstate's, supra, application and interpretation of the Motor Vehicle Accident Claims Act and the financial responsibility act.

It is clear that the exclusionary clause, unauthorized by M.C.L.A. § 257.520(b)(2); M.S.A. § 9.2220(b)(2), was invalid and that Harold Shelly, Jr., was insured at the time of the accident. Allstate, supra, 33 Mich.App. p. 473, 190 N.W.2d 354. See also Robinson v. Mendell, 45 Mich.App. 368, 370, 206 N.W.2d 537 (1973), lv. den., 390 Mich. 758 (1973), Celina Mutual Insurance Co. v. Preferred Risk Mutual Insurance Co., 51 Mich.App. 99, 103--104, 214 N.W.2d 704 (1974), lv. den., 391 Mich. 819 (1974), and Lilje v. Allstate Insurance Co., 54 Mich.App. 378, 381, 221 N.W.2d 185 (1974). We must now determine the issue of first impression in Michigan of whether or not the $25,000/$50,000 liability limit in the insurance policy or the $10,000/$20,000 limit contained in the above statute is the amount of coverage which pliantiff must afford to Harold Shelly, Jr. Although Robinson noted that because of the invalidity of the clause, the formerly excluded son became an insured person, 45 Mich.App. 368, 370, 206 N.W.2d 537, and while Celina Mutual noted that because the exclusionary clause was invalid the driver became insured under the policy, 51 Mich.App. 99, 104, 214 N.W.2d 704, neither these cases nor any other Michigan case has been faced with the question now before us.

According to the statement on page 3 of the insurance policy, the plaintiff agreed 'to pay on behalf of the insured all sums which the insured shall become legally obligated to pay * * *' as a result of bodily injury or property damage caused by an accident arising out of the ownership, maintenance or use of the owned motor vehicle. Because Harold Shelly, Jr., is now an insured, one might argue that the company would be liable up to the policy limits. We further note that a finding that Junior was an insured person can be found at page 5 of the insurance policy where the term 'insured' is defined Inter alia, as a resident of the same household who is also a relative of the first person named in the declaration or of that person's spouse. Junior falls within that definition.

Other jurisdictions have had occasion to consider a question similar to the one at hand, and there seems to be a split of authority on whether the policy limits or the statutory limits apply. Sandoval v. Chenoweth, 102 Ariz. 241, 247, 428 P.2d 98 103 (1967), held that one who became an insured by operation of law was protected to the full limits of the insurance policy rather than the minimum limits of the relevant statute. Sandoval referred to the California line of decisions which have rejected the argument that merely because one became an insured party pursuant to the operation of the financial responsibility act, the liability had to be determined by the statutory limit rather than the policy limit. 102 Ariz. 246--247, 428 P.2d 103, citing Globe Indemnity Co. v. Universal Underwriters Insurance Co., 201 Cal.App.2d 9, 20 Cal.Rptr. 73 (1962), and Truck Insurance Exchange v. American Surety Co., 338 F.2d 811 (CA.9, 1964).

Plaintiff argues that a reading of M.C.L.A. § 257.520(b)(2); M.S.A. § 9.2220(b)(2) and M.C.L.A. § 257.520(g); M.S.A. § 9.2220(g) leads to an interaction by which the minimum statutory limits...